Loading...
GOB Internal Improvement BondsCity of Salina, KS GO Int. Imp. Bonds. Series 2012-A TRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE OF $2,365,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A Legal Opinion Gilmore & Bell, P.C. Kansas City, Missouri DATED JULY 15, 2012 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 15, 2012 CLOSING LIST Copies of the transcript of proceedings for the above referenced issue (the "Bonds"), will be prepared and distributed as follows: 1. City of Salina, Kansas (the "Issuer") 2. Attorney General of the State of Kansas 3. UMB Bank, N.A., Kansas City, Missouri (the "Original Purchaser") 4. George K. Baum & Company, Kansas City, Missouri (the "Financial Advisor") 5. Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel") Document Number PROCEEDINGS AUTHORIZING THE IMPROVEMENTS 1. Magnolia Commons Improvement District Project PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS 2. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 12-6910 3. Resolution No. 12-6910 authorizing the offering for sale of the Bonds 4. Notice of Bond Sale, Preliminary Official Statement and Certificate Deeming Preliminary Official Statement Final 5. Affidavit of publication of the Summary Notice of Bond Sale in the The Salina Journal 6. Affidavit of publication of the Summary Notice of Bond Sale in the Kansas Register 7. Official Statement S. Excerpt of Minutes evidencing first reading of Ordinance No. 12-10642 9. Excerpt of Minutes of the governing body meeting evidencing opening of the bids, acceptance of the best bid of the Original Purchaser, passage of Ordinance No. 12-10642 and adoption of Resolution No. 12-6917 10. Ordinance No. 12-10642 authorizing the issuance ofthe Bonds 11. Affidavit of publication of Ordinance No. 12-10642 12. Resolution No. 12-6917 prescribing the form and details ofthe Bonds CLOSING DOCUMENTS 13. Transcript Certificate Exhibit A -Schedule of Outstanding General Obligation Indebtedness 14. Uniform Facsimile of Signature Certificate 15. Specimen Bond 16. Agreement Between Issuer and Agent 17. DTC Blanket Letter of Representations IS. Rating Letter -Moody's 19. Closing Certificate Exhibit A -Continuing Disclosure Instructions 20. Federal Tax Certificate with attachments as follows: Exhibit A -Internal Revenue Service Form S03S-G and evidence of filing Exhibit B -Receipt for Purchase Price Exhibit C -Receipt and Representation Exhibit D -Description of Property Comprising the Financed Improvements[ and List of Reimbursement Expenditures] Exhibit E -Sample Annual Compliance Checklist Exhibit F -Allocation of Bonds -Multipurpose Issue Schedule 1 -Debt Service Schedule & Proof of Yield 21. Certificate of Financial Advisor LEGAL OPINIONS 22. Approving legal opinion of Gilmore & Bell, P.C. 23. Approval letter of Attorney General 11 MISCELLANEOUS DOCUMENTS 24. Closing Letter 25. Letter from State Treasurer Confirming Registration Number * * * * * 111 PETITION TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: City Clerk's Office Filed We, the undersigned, owners of record of property located within the City of Salina, Kansas (the "City") do hereby respectively request that the Governing Body of the City create and designate an improvement district for the purpose of making certain improvements ill the manner provided by K.S.A. 12-6aOl, et seq. 1. The general nature of the proposed improvements are as follows: The curb, guttering, paving, grading and drainage for approximately 1,600 lineal feet of Virginia Drive, (the Virginia Drive Street Improvements); 920 lineal feet of Virginia Court, (the Virginia Court Street Improvements); and 625 lineal feet of Magnolia Road, (the Magnolia Road Street Improvements) and collectively the "Street Improvements". The installation of approximately 10,073 lineal feet of twelve-inch water main, 965 lineal feet of ten-inch water main, 80 lineal feet of six-inch water main, fire hydrants, valves, fittings, and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 356 lineal feet of fifteen-inch sanitary sewer main, 2,207 lineal feet of twelve-inch sanitary sewer main, 3,268 lineal feet of eight-inch sanitary sewer main, manholes, wastewater lift station, and all appurtenances thereto (the Sanitary Sewer Improvements). The installation of stormwater detention, stormwater pump station and all appurtenances thereto (the "Stormwater Detention Pond"). The installation of approximately 2,138 lineal feet of storm sewer, inlets, and all appurtenances thereto (the "Drainage Improvements"). (collectively, the "Improvements"). 2. The estimated or probable cost of the Improvements is: Three million four hundred fifteen thousand five hundred sixty-three dollars and sixty cents ($3,4 15,563.60). 3. The extent of the proposed improvement district to be assessed is: Parcell Lot I, Block 1, in the Magnolia Commons Addition Parcel 2 Lot 4, Block 1, in the Magnolia Commons Addition Parcel 3 Lot 3, Block 1, in the Magnolia Commons Addition Parcel 10 An unplatted tract of land located in the South half of the Southeast Quarter of Section 26, Township 14 South, Range 3 West of the Sixth Principal Meridian in Saline County, Kansas, more particularly described as follows: Commencing at the Southwest corner of the Southeast V. of said Section 26; thence North along the West line of said Southeast V. on an assumed bearing of North 00°09'15" East, a distance of 96.25 feet to the POINT OF BEGINNING; thence North 89°38'00" East, a distance of 22.40 feet; thence North 66°25'36" East, a distance of 38.07 feet; thence North 81 °21 '24" East, a distance of 489.67 feet; thence North 09°41 '31" West, a distance of 567.93 feet; thence North 20°27'30" West, a distance of 198.30 feet; thence North 35°49'23" West, a distance of 242.34 feet; thence North 52°55 '59" East, a distance of25.00 feet to a point on the westerly right-ofway ofI-135 highway; thence northwesterly along said RJW on a non-tangent curve to the left having a radius of 5579.58 feet, an arc distance of223.78 fee!, said curve having a long chord of223.77 feet and a bearing of North 38°12'31" West; thence South 89°57' 15" West, a distance of 112.89 feet to a point on the West line of the Southeast Y. of said Section 26; thence South 00°09' IS" West along said West line, a distance of 1221.88 feet back to the POINT OF BEGINNING. The above described tract of land contains 469,826 square feet or 10.79 acres, more or less. Parcel 11 Lot I, Block 1, in the Premier Addition. (the "Improvement District"). 4. The proposed method of assessment shall be: Each parcel in the Improvement District shall be assessed equally per acre for costs of the various Improvements benefitting such lot, as described in "Apportionment of Cost" below. 5. The proposed apportionment of cost between the Improvement District and the city at large is: Certain costs of the Improvements shall be paid by the Improvement District certain cost of the Improvements shall be paid by the city at large, as follows: Costs chargeable to the Improvement District 1. Approximately 70.9% of the Street Improvements to be assessed to the following properties: Parcels I, 2,3, and II. 2. One hundred percent (100%) of the Drainage Improvements to be assessed to the following properties: Parcels 1, 2, and 3. 3. One hlll1dred percent (100%) of the Stormwater Detention Pond to be assessed to the following properties: Parcels I, 2, and 3. 4. Approximately 14.7% of the total cost of the Water System Improvements to be assessed to the following properties: Parcels 1,2, 3, 10, and II. 5. Approximately 19.3% ofthe costs of the Sanitary Sewer Improvements to be assessed to the following properties: Parcels 1,2, 3, 10, and 11. Costs chargeable to the City-At-Large 1. Approximately 29.1 % ofthe Street Improvements. 2. Approximately 85.3% of the Water System Improvements. 3. Approximately 80.7% of the Sanitary Sewer Improvements. Pursuant to the provisions of K.S.A. 12-6aI9, there is additional property that benefits or Will benefit from the Improvements, but is not included within the Improvement District referenced in paragraph 3 herein because the property is currently outside the City limits. The City intends to charge benefit fees in the manner set forth in K.S.A. 12-6a19 for any owner of property within the tracts of land shown on the map attached hereto as Exhibit A. referenced as the "K.S.A. 12-6a 19 Area," and legally described as follows: Parcel 4 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract ofland located in the Northeast Quarter of Section 35, Township 14 South, Range 3 West of the 6111 Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Comer of said Northeast Quarter; Thence on an assumed bearing of South 00°05'09" East on the West line of said Northeast Quarter, a distance of 1696.31 feet to the Southwest comer of a parcel recorded in Saline County Register of Deeds, Book: 1168, Page: 1808, said point being the POINT OF BEGINNING; Thence North 89°52'43" East on the South line of said recorded parcel, a distance of 1355.10 feet to the West Right-of-Way line ofl-135; Thence on said Right-of Way line ona curve to the Right having a radius of5579.65 feet, an arc length of 552.14 feet, a chord bearing of South 02°36'23" East, a chord distance of 551.91 feet; Thence South 00°13'42" West continuing on said West Right-of-Way line, a distance of 363.60 feet to a point 20.00 feet North of the South line of said Northeast Quarter; Thence North 89°55'27" West on a line paraJleJ to and 20.00 feet north of said South line, a distance of 1377.39 feet to said West line; 2 Thence North 00°05'09" West on said West line, a distance of 910.25 feet to the POINT OF BEGINNING. Said tract contains 1,254,306.80 square feet, 28.795 acres, more or less. Parcel5a (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARy) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Comer of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 1585.99 feet; Thence South 00°27'27" West, a distance of71.18 feet to a point on the South Right-ofWay line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 00°27'27" West on said South Right-of-Way line, a distance of 29.65 feet to a point on the centerline of Dry Creek; Thence South 81°08'09" East on the centerline of Dry Creek, a distance of23.01 feet; Thence South 52°23'12" East on the centerline of Dry Creek, a distance of219.86 feet; Thence South 27OZ2'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of64.18 feet; Thence South 01°18' 17" West on the centerline of Dry Creek, a distance of28.31 feet; Thence South 27°52 '23" East on the centerline of Dry Creek, a distance of26.19 feet; Thence South 51 °13 '46" East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41 °06'48" East on the centerline of Dry Creek, a distance of79.39 feet; Thence South 33°41 '20" East on the centerline of Dry Creek, a distance of 109.28 feet; Thence South 34° 16' 28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30°10' 59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43 '39" East on the centerline of Dry Creek, a distance of75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of127.14 feet; Thence South 12°52' 13" East on the centerline of Dry Creek, a distance of 82.84 feet; Thence North 89°52'43" East, a distance of 509.42 feet to a point that is 10.00 feet West, measured perpendicular, of the East line of said Northwest Quarter; Thence North 00°05'09" West parallel to said East line, a distance of 1278.92 feet to a point on the South line of a parcel recorded ID Saline County Register of Deeds Book: 379, Page: 555; Thence North 89°54'29" West, a distance of 513.61 feet to the Southwest comer of a parcel recorded in Saline County Register of Deeds Book: 1209, page: 477; Thence North 00°33 '09" West, a distance of 347.96 feet to the Northeast comer of a parcel recorded in Saline County Re~ister of Deed Book: 1209, page: 477; Thence on said South Right-of-Way line on a curve to the Right, having a radius of 28707.87 feet, an arc length of 522.05 feet, a chord bearing of South 89°54'23" West, and a chord distance of 552.04 feet, to the POINT OF BEGINNING. Said tract contains 1,118,002.76 square feet, 25.666 acres, more or less. Parcel 5b (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northeast Comer of said Northwest Quarter; Thence on an assumed bearing of South 00°05 '09" East on the East line of said Northwest Quarter, a distance of 1696.31 feet to the POINT OF BEGINNING; Thence South 89°52'43" West, a distance of 519.42 feet to a point on the centerline of Dry Creek; Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 32.97 feet; Thence South 11°37'07" Easton the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04°29'24" East on the centerline of Dry Creek, a distance of 90.73 feet; 3 Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46'47" East on the centerline of Dry Creek, a distance of 145.30 feet; Thence South 14°07' 13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 19°24'04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" Easton the centerline of Dry Creek, a distance of 82.06 feet; Thence South 07°45'11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence South 89°59'23" East, a distance of 336.87 feet to the Southeast comer of said Northwest Quarter; Thence North 00°05'09" West on the East line of said Northwest Quarter, a distance of 930.07 feet to the POINT OF BEG1NN1NG. Said tract contams 408,268.12 square feet, 9.3725 acres, more or less. Parcel 6 (LOCATED OUTSIDE THE CITY LIMITS, BUT DlRECTL Y ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Comer of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 130.18 feet; Thence South OOOZO'OO" East on the East Railroad Right-of-way line, a distance of 43.23 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of214.37 feet; Thence North 01"18'27" East on said South Right-of-Way line, a distance of 17.00 feet; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of 50.00 feet; Thence South 01°18'27" West on said South Right-of-Way line, a distance ofl7.00 feet; Thence South 87"28'33" East on said South Right-of-Way line, a distance of 475.10 feet; Thence South 89°55'33" East on said South Right-of-Way line, a distance of 103.18 feet to a Permanent Easement line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 87; Thence South 59°58'41 East on said Easement line, a distance of 171.05 feet; Thence on a curve to the left, having a radius of 28797.87 feet, an arc length of 200.80 feet, a chord beanng of South 88"48'46" East, a chord distance of200.80 feet; Thence North 00°59'27" East contmuing on said Easement line, a distance of 89.30 feet to a point on said South Right-of-Way line, Thence South 89°55' 33" East on said South Right-of-Way line, a distance of 47 .02 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28707.87 feet, an arc length of 185.40 feet, a chord bearing of South 89°17'33" East, a chord distance of 185.40 feet; Thence South 00°31 '27' West on said South Right-of-Way line, a distance of 30.00 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28737.87 feet, an arc length of 30.10 feet, a chord bearing of South 89°30'33" East, a chord distance 30.10 feet; Thence North 00°27'27" East on said Right-of-Way line, a distance of 0.35 feet to the centerline of Dry Creek; Thence South 81°08'09" East on the centerline of Dry Creek, a distance of23.01 feet; Thence South 52°23'12" East on the centerline of Dry Creek, a distance of219.86 feet; Thence South 27"22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.18 feet; Thence South 01°18'17" West on the centerline of Dry Creek, a distance of28.31 feet; Thence South 27°52'23" East on the -centerline of Dry Creek, a distance of 26.19 feet; Thence South 51°13'46" East on the centerline of Dry Creek, a distance of75.44 feet; Thence South 41 °06'48" East on the centerline of Dry Creek, a distance of 79.39 feet; Thence South 33°41'20" East on the centerline of Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30°10'59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43'39" East on the centerline of Dry Creek, a distance of75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of 245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance ofl27.14 feet; 4 Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 115.82 feet; Thence South 11°37'07" East on the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04°29'24" East on the centerline of Dry Creek, a distance of 90.73 feet; Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46'47" East on the centerline of Dry Creek, a distance of 145.30 feet; Thence South 14°07'13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 19°24'04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" East on the centerhne of Dry Creek, a distance of 82.06 feet; Thence South 07°45'11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence North 89°59'23" West on said South line, a distance of 2185.38 feet to the East Railroad Right-of-Way line; Thence North 00°20'00" West on the East Railroad Right-of-Way line, a distance of 2586.58 feet to the POINT OF BEGINNING. Said tract contams 4,732,112.18 square feet (108.634 acres) more or less. Parcel 7 (LOCATED OUTSIDE THE CTIY LIMITS, BUT DIRECTLY ADJACENT TOTHECITYBOUNDAR~ A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly descnbed as follows: Commencing at the Southwest Comer of said Southwest Quarter; Thence on an assumed bearing of South 89°50'27" East, a distance of 133.10 feet; Thence North 00°20'00" West, a distance of 2647.37 feet ro the intersection of the East Railroad Right-ofWay line and the North line of said Southwest Quarter; Thence -South 89°59'23" East on said North line, a distance of 2185.38 feet to the centerline of Dry Creek and the POINT OF BEGINNING; Thence South 89°59'23" East on said North line, a distance of 336.87 feet to the Northeast corner of said Southwest Quarter; Thence South 00°05'01" East on the East line of said Southwest Quarter, a distance of 1267.92 feet to a point on a line that is 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West on a line that is 59.00 feet North of said South line, a distance of 505 .20 feet to the centerline of Dry Creek; Thence North 45°29' 12" East on the centerline of Dry Creek, a distance of 19.48 feet; Thence North 16°52' 13" East on the centerline of Dry Creek, a distance of 58.65 feet; Thence North 20°49' 15" East on the centerline of Dry Creek, a distance of 66.70 feet; Thence North 01°28'45" Weston the centerline of Dry Creek, a distance of 85.97 feet; Thence North 09°51 '52" West on the centerline of Dry Creek, a distance of 138.24 feet; Thence North 07°07'28" West on the centerline of Dry Creek, a distance of 208.97 feet; Thence North 14°11 '36" West on the centerlme of Dry Creek, a distance of 133.01 feet; Thence North 03°27'16" Weston the centerline of Dry Creek, a distance of61.41 feet; Thence North 16°07' 53" East on the centerline of Dry Creek, a distance of 66.66 feet; Thence North 38°43'53" East on the centerline of Dry Creek, a distance of 100.64 feet; Thence North 28°05'19" East on the centerline of Dry Creek, a distance of99.20 feet; Thence North 32°31 '29" East on the centerline of Dry Creek, a distance of 125.25 feet; Thence North 16°16'22" East on the centerline of Dry Creek, a distance of 87.32 feet; Thence North 07°42'42" West on the centerline of Dry Creek, a distance of 55.15 feet; Thence North 17°02'33" West on the centerline of Dry Creek, a distance of 42.95 feet; Thence North 07°45'11" West on the centerline of Dry Creek, a distance of 0.18 feet to the POINT OF BEGINNING. Said tract contains 574,225.86 square feet (13.182 acres) more or less. Parcel 8 (LOCATED OUTSIDE THE CITY LlMlTS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 61h Principal Meridian, Saline County, Kansas, more particularly described as follows: Beginning at the Northwest corner of the Wheatridge Addi110n to Salina Kansas, Saline County, Kansas; Thence on an assumed bearing of North 00°20'00" West on the East Railroad Right-ofWay line, a distance of 1019.03 feet to the North line of said Southwest Quarter; Thence South 89°59'23" East on said north line, a distance of 2185.38 feet to the centerline of Dry Creek; Thence South 07°45'11" East on the centerline of Dry Creek, a distance of 0.18 feet; 5 Thence South 17°02'33" East on the centerline of Dry Creek, a distance of 42.95 feet; Thence South 07°42'42" East on the centerline of Dry Creek, a distance of55.15 feet; Thence South 16°16'22" West on the centerline of Dry Creek, a distance of 87.32 feet; Thence South 32°31 '29" West on the centerline of Dry Creek, a distance of 125.25 feet; Thence South 28°05'19" West on the centerline of Dry Creek, a distance of 99.20 feet; Thence South 38°43 '53" West on the centerline of Dry Creek, a distance oflOO.64 feet; Thence South 16°07'53" West on the centerline of Dry Creek, a distance of 66.66 feet; Thence South 03°27'16" Easton the centerline of Dry Creek, a distance of 61.41 feet; Thence South 14°11 '36" East on the centerline of Dry Creek, a distance of 133.01 feet; Thence South 07°07'28" East on the centerline of Dry Creek, a distance of 208.97 feet; Thence South 09°51 '52" East on the centerline of Dry Creek, a distance of 138.24 feet; Thence South 0 1 °28'45" East on the centerline of Dry Creek, a distance of 85 .97 feet; Thence South 20°49' IS" West on the centerline of Dry Creek, a distance of 66.70 feet; Thence South 16°52'13" West on the centerline of Dry Creek, a distance of58.65 feet; Thence South 45°29' 12" West on the centerline of Dry Creek, a distance of 19.48 feet to a line 59.00 feet North of the South line of the North Halfofsaid Southwest Quarter; Thence North 89°54'56" West parallel to said South line, a distance of 393.30 fuet to the East line of said Wheatridge Addition; Thence North 00°23 '36" West on the East line of said Wheatridge Addition, a distance of 243.96 feet to the North line of said Wheatridge Addition; Thence North 89°51 '19" West on the North line of said Wheatridge Addition, a distance of 1618.00 feet to the POINT OF BEGINNING. Said tract contains 2,220,091.93 square feet (50.966 acres) more or less. Parcel 9 (LOCATED OUTSIDE THE CITY LIMITS, Bur DlRECTL Y ADJACENT TO THE CITY BOUNDARY) That part of the North Half(N Yz) of the Southeast Quarter (SE 14) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6111 P.M., lying West of 1-35 Highway, less a 1.85 acre tract described as follows: Beginning at the Southwest comer of said N Y, of the SE 14; thence Northerly along the West line of said N Y, of the SE Yo to a point 1379 feet North of the Southwest comer of the SE 14 of Section 35; thence Easterly parallel to the South line of said SE 11. to a point on the westerly right-ofway line 1-35 (now 1-135) Highway, said point being 1267.26 feet West of the East line of said SE 14, thence with an angle of 90°02'45" to the right along said right-of-way line to the South line of said N Yz of the SE 14; thence Westerly along said South line of said N y, of the SE V. to the point of beginning; The South Twenty (20) feet of the Northeast Quarter (NE Yo) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6111 P.M., Saline County, Kansas, lying west of the right-of-way of Interstate 1-135. The above described land contains 1,780,310.41 square feet or 40.870 acres, more or less. The total benefit fees to be charged to all property within the K.S.A. 12-6a 19 Area shall equal approximately 85.3% of the total cost of the Water System Improvements; approximately 29.1 % of the total cost of the Street Improvements; approximately 79.1 % of the total cost of the Sanitary Sewer Improvement. The total benefit fees shall be charged to each Parcel and unplatted tract ofland within the K.S.A. 12-6a19 Area equally per acre. Pursuant to K.S.A. 12-6aI9, the benefit fee shall be assessed against the K.S.A. 12-6a19 Area at the time the owners of property within the K.S.A 12-6a19 Area request, by petition, to be served by the Water System Improvements and/or the Sanitary Sewer Improvements, or at such time as the owners request, by petition to connect to the Street Improvements (including, but not limited to, a request to make a driveway cut onto the Street Improvements). The benefit fee shaH be assessed only against that portion of the K.SA. 12-6a 19 Area that is descnoed in such petition requesting service. The benefit fce shall be due and payable at the time the property begins being served by the Improvement, and shall be subject to the same interest rate as assessments against the property originally included in the Improvement District. If the benefit fee is charged after the bonds issued by the City to pay the costs of the Improvements have been repaid, then the benefit fee shall be paid in one lump sum. If the benefit fee is charged while the bonds issued by the City to pay the costs of the Improvements are still outstanding, then a portion of the benefit fee shall be paid in one lump sum (equal to that portion of the bonds that have been repaid) and the remainder of the benefit fee shall be paid in equal annual installments 6 (equal to that portion of the bonds that are still outstanding). Any benefit fees paid shall be applied to the City's general bond and interest fund. 6. The signers of this Petition hereby request that the Improvements be made without notice and hearing as required by K.S.A. 12-6a04(a). NAMES MAY NOT BE WITHDRAWN FROM THE PETITION BY THE SIGNERS THEREOF AFTER THE GOVERNING BODY COMMENCES CONSIDERATION OF THE PETITION OR LATER THAN SEVEN (7) DAYS AFTER FILING OF THE PETITION WITH THE CITY CLERK, wmCHEVER OCCURS FIRST. 7 The petitioners certify, under oath, that they have no fmancial interest in any property with delinquent special assessment anywhere within the city of Salina. Magnolia Development Partners, L.L.C. Robert J Eckho]t Chief Executive Manager LEGAL DESCRIPTION OF PROPERTY OWNED WITmN TIlE PROPOSED IMPROVEMENT DISTRICT: Lots 1 through 4, Block 1, all in the Magnolia Commons Addition, in the City of Salina, Saline County Kansas. STATE OF KANSAS SALINE COUNTY -I, the undersigned Notary Public, hereby certifY that the signature appearing above is genuine and that this document was signed before me on this ~ day of Apr iI, 2010. My appointment expires: Notary Public a . NOTARY PUBUC • state of Kansas ~ Melissa L. Rose My .~!>p! Explrea :l ..... -I' "----.--~.~~= 8 Premier Properties, L.L.C. Darrell Hills Member Manager LEGAL DESCRIPTION OF PROPERTY OWNED WITHIN THE PROPOSED IMPROVEMENT DISTRICT: Lots 1, Block 1, in the Premier Addition, in the City of Salina, Saline County Kansas. STATE OF KANSAS SALINE COUNTY I, the undersigned Notary Public, hereby certify that the signature appearing above is genuine and that this document was signed before me on this 2L day of Af...z, d.< ,2010. Notary Public My appointment expires: 9 Grantor Grantee Type of Document Recording Fees Mtg Reg Tax Total Amount Return Address ~~~ REBECCA SEEMAN ~~~-"~~~~~EGISTER OF DEEDS SALINE COUNTY, KANSAS €.~~\ .~ '~I.. H"0't'~.i\ P.i"I •, ."}. ,. Receipt B-o:o 6k3: 71662 12 APaNge : 798 Reccrding F• •: Oth.,. ~ ;;: .. '" ..•. ,,-~ Pag •• Rlccrd.d: a v 11...... ~""_~_, ""-\~. .. fC.D.WJ.XIJ-.JiJ)~#1Io&I7V Date Recorded: 5/25/2010 3:35:28 PM ... --------------_.:,;: .. :,:'-. ", .~~:?:::-. -------------Certified Copy Of Resolution ':::.~~(·':;:;:;'j;.i~;~:' ____________ _ $0.00 j~::;;i';-" __________________ _ '.:", .... $0.00 ::"'.';::':: .,.:' $0.00 ,:::.::: .. ;t--';'~.:;;::~-------------~~-----., ----------------------------:,': . ~'.':: ~.:\::.~ .. :.::. ,", CINDy.··· ---,.:,'-;i-: -.:--..;;;'--------------. ~ ". ' ... ' .... '...-. ::~?;;---------------" .: , .: ... -:'" ' .. ,.;.,~----------------" ;:.' .. ',:: . (published in the Salina Journal on IIp-rll ....:§~ ,2010L BOO : 121c Page: 799 RESOLUTION NUMBER 10·6731 A RESOLUTION SElTING FORTH FINDINGS AND DETERMINATIONS OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE ADVISABILITY OF AND AUTHORIZING THE CONSTRUCTION OF CERTAIN IMPROVEMENTS PURSUANT TO K.S.A. 12·6aOl et seq. , WHEREAS, a petition was filed with the City Clerk for the City of Salina, Kansas (the "City") on April 26, 2010, proposing certain improvements pursuant to K.S.A. 12·6aOl el seq. (the "Petition"); and WHEREAS, the Petition sets forth: (a) the general nature of the proposed improvements; (b) the estimated or probable cost of the proposed improvements; (c) the extent of the proposed improvement cl~~trict to be assessed for the cost of the proposed improvements; (d) the proposed method of assessmel\t; (it the proposed apportiorunent of the cost between the improvement district and the City at large; and (X) 1\ ,rel-i13Y5t that such improvements be made without notice and hearing as required by K.S.A. 12-6a04(a); R"r1:" " .. ," ,:;' WHEREAS, the owners of record of more than one-half of the property located ~\i,hi!r,ille proposed improvement district have signed the Petition: and .. ::::,'.. "'"";" " .. , '.: . .'~:. WHEREAS, no signatures have been withdrawn from the petition befo~nhe Go';>eming Body began consideration of the Petition; and ,; .. :., ,::' WHEREAS, K.S,A. 12·6a04 provides that the Governing B:~i~ may ;i.uthorize Jlnd order public improvements without notice and hearing after a sufficient petition has be;!;:': pled; ;md .. . 'L·.~.· WHEREASj the governing body has reviewed and considered tbe Preliminary Engineering Estimate and Feasibility Report prepared by the City Engineer and af,\l:~,~~ with rhe conclusions set forth therein; and WHEREAS, the governing body has deterIl'!i!)ed that '1?,}i;' appropriate to designate Virginia Dri~e, Virginia Court and Magnolia Road as "arterial streeiiitlfi:~tir,.t;term is used in K.S.A. 12-6a19, but solely for the purposes of imposing benefit fees pursuantto K .5:/\' U~a 19; NOW THEREFORE, BE IT RE5&,;V'ED B¥ THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS," ': ,',., ,'. Section 1. The Goveniil\g Bod):hereby fmds that the Petition is sufficient, and further finds and determines that it is necessary,l1~id ad"'}:,*~',hHO make the following improvements: '." .~ ' .. ~ -(a) The natIH'~ ofth~-:'~~WJrovements are as follows: The"~';'h, 'Suttering, paving, grading and drainage for appr.oximately 1,600 lineal feet of , Virginif;, Ddve (the Virginia Drive Street Improvements); 920 lineal feet of Virginia Court, ': (tM"Virginia Court Street Improvements); and 625 lineal feet of Magnolia Road, (the , ,Magnol ia Road Street Improvements) and collectively the "Street Improvements". The installation of approximately I 0,073 lineal feet of twelve-inch water main, 965 lineal I' "J! " ',: ":.11' .:, .. " " feet of ten·inch water main, 80 lineal feet of six·inch water main, fire hydrants, valves, fittings, and all appurtenances thereto (the Water System Improvements), :. :. '1': The installation of approximately 356 lineal feet of fifteen-inch sanitary sewer main, 2,207 lineal feet of twelve-inch sanitary sewer main, 3,528 lineal feet of eight·inch sanitary sewer main, manholes, wastewater lift station, and all appurtenances thereto (the Sanitary Sewer Improvements), The instatlation of stormwater detention, stormwater pump station and all appurtenances thereto (the "Stormwater Detention Pond"). The installation of approximately 2,138 lineal feet of storm sewer, inlets, and all appurtenances thereto (the ''Drainage Improvements''). (collectively, the "Improvements"). (b) The estimated cost of the Improvements is: Three million four hundred fifteen thousand five hundred sixty-three dollars and sixty cents ($3,415,563.60). (c) The boundaries of the improvement distridt to be assessed are: ,:~, .-.-, . , .. " '. : '. (d) Book: 1212 Page: 888 ~rcel 1 Lot I, Block I, in the Magnolia Commons Addition 'Parcel 2 Lot 4, Block I, in the Magnolia Commons Addition iarcel3 Lot 3, Block I, in the Magnolia Commons Addition ~arcel 10 An unplatted tract of land located in the South half of the Southeast Quarter of Sect~t;n 26, Township 14 South, Range 3 West of the Sixth Principal Meridian in Saline Cour:1;Y, Kansas, more particularly described as follows: ':, ' :', " Commencing at the Southwest corner of the Southeast 14 of said Section 2(1,; " ':-: thence North along the West line of said Southeast \4 on an assumed liif,'ripg of North 00·09' IS" East, a distance of 96.25 feet to the POINT OF BEGINNING; :""', thence North 89°38'00" East, a distance of 22.40 feet; ,':':':,:-', ":';. thence North 66°25'36" East, a distance of38,07 feet; , ' " : thence North 81 °21 '24" East, a distance of 489,67 feet; thence North 09°41'31" West, a distance 'of 567.93 feet; " ':", ':" thence North 20°27'30" West, a distance of 198.30 feet( thence North 35°49'23" West, a distance of 242.34 fee!':':, ,." thence North 52°55'59" East, a distance of25.00 feet ti;ff,.~,()~rit on the westerly right-ofway ofI·135 highway: thence northwesterly along said RIW on a non-tangent curve to the left having a radius of 5579.58 feet, an arc distance of223.78 feel:;:s\~id cU!:'ie having a long chord of223. 77 feet and a bearing of North 38°12'31" W!<S,t; "J;':':: thence South 89°57'15" West, a di~~~",~"yf ~12:89 feet to a point on the West line of the Southeast ',4 of said Section 26; : : .. " : thence South 00°09'15" Wem,'illong:mid West line, a distance of 1221.88 feet back to the POINT OF BEGINNING.: ',.::-;', " The above describe,;\ ira~t of J~id contains 469,826 square feet or 10.79 acres, more or less. ' : ' 'Parcel 11 ,: :,;',' ::: .. ,:', . Lot I, ~.lock i~"}ll tb,;\,Premier Addition, (th~ '''~p:o,provement District"), : 'Thy. meili(;d of assessment shall be: :", . ,~:;I)h parcel in the Improvement District shall be assessed per acre fOT costs of the various Improvements The apportionment of cost between the Improvement District and the city at large is: Costs chargeable to the Improvement District 1. Approximately 70,9% of the Street Improvements to be assessed to the following properties: Parcels 1,2,3, and II. 2. One hundred percent (100%) of the Drainage Improvements to be assessed to the following properties: Parcels 1,2, and 3. 3. One hundred percent (100%) of the Stormwater Detention Pond to be assessed to the following properties: Parcels 1,2, and 3. 4. Approximately 14.7% of the total cost of the Water System Improvements to be assessed to the following properties: Parcels I, 2,3, 10, and 11. S. Approximately 19.3% of the costs of the Sanitary Sewer Improvements to be assessed to the following properties: Parcels I, 2, 3, 10, and 11. Costs chargeable to the City-At-Large I, Approximately 29.1 % of the Street Improvements. 2, Approximately 85.3% of the Water System Improvements, 3. Approximately 80,7% of the Sanitary Sewer Improvements 2 Book: 1212 Page: 881 Section 2. The Governing Body hereby declares that the Improvements descn'bed in this Resolution are necessary, and authorizes them to be made in accordance with the findings set. forth in this Resolution. and further authorizes the levying of asSessments and the issuance of bonds therefore, all in accordance with K.S.A. 12-6aO 1 et seq. Section 3. The City expects tQ make capital expenditures from and after the date of this Resolution in connection with the Improvements described herein, and intends to reimburse itself for such expenditures with the proceeds of one or more series of general obligation bonds and temporary notes of the City in the maximum principal amount 0£$3,415,563.60. Section 4. The City Clerk is hereby autholjzed and directed to make progress payments to the contractors for materials furnished and for labor performed under the contract when estima,tes theref~~ are presented to himlher which have been properly certified by the City Engineer, so long as the agg'l'ilgate payments do not exceed the total contract price. :. ;'~'. ::,: ':.. .' .~'~'. Section S. PUrsuant to the proviSions ofK.S.A. 12-6a19. there is additional P[,)p~ri~:P1at be~~ti or will benefit from the Improvements, but is not included within the Improvement District'l:~attS'" the prope is currently outside the City limits. The City intends to charge benefit fees in the m~!:!. set:{Gi1~ in K.s.A. 12 6a19 for any owner of property within the tracts oflegaJly describCld as follows: .: : "': ' ". ~arcel 4 (LOCATED OUTSIDE THE CITY LlMITS, BUT DIREC'~1~y' ~~~CENT TO THE CITY BOUNDARy) .: '.' 0" • :;;' ,','" A tract of land located in the Northeast Quarter of Section 35 .. :t~?WIlshir/14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particuim'lj"d,;Scribed as follows: Commencing at the Northwest Comer of said Nort~east Quarter; Thence on an assumed bearing of South 00°05'09" .bast on l1ie West line of said, Northeast Quarter, a distance of 1696.31 feet to the Southwest co~er of <i:i~il-i;ool recorded in Saline County Register of Deeds, Book: 1168, Page: 1808, said poin, 'f<6j,:fi~ l!~-e POtNT OF BEGINNING; Thence North 89°52'43" East on the South'1(~e!:;f5aid recorded parcel, a distance of 1355.10 feet to the West Right-of-Way line ofI-l3S; " :,.; . Thence on said Right-of Way Iin.~··oJ'; ;l curv',\~ to the Right having a radius of 5579.65 feet, an arc length of552.14 feet, a chord.w:.ll'ing'ot';:odth 02°36'23" East. a chord distance of551.91 feet; Thence South 00°13'42" Wi'S!: continuing'on said WestRight-of~Way line, a distance of 363.60 feet to a point 20.00 feet North ;;if the SOll:th line of said Northeast Quarter: Thence North 89°55'27' V/~$,t.o.t} l\::line parallel to and 20.00 feet north of said South line, a distance of 1377.39 feet to ~~ld. West mie; Thence North f)O"OS"vr;;". West on said West line, a distance of 910.25 feet to the POINT OF BEGINNING:" ',,::, Said tract CQ~}l~,iNi 1,254,306.80 square feet, 28.795 acres, more or less. ~arc"151'\ ·t~Ot.'~TED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY iil:0UNDARY) A 1.':.\'.t of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the .f/" Principal Meridian, Saline County, Kansas, mor~ particularly described as follows: :]' .: '. "C~~mencing at the Northwest Comer of said Northwest Quarter: :,,:: 111 .: " Thence on anf assumed bearing of South 89°54'47" East on the North line. of said Northwest Quarter, I a distance 0 1585.99 feet; ..... " ',' Thence South 00"27'27" West, a distance of71.18 feet to a point on the South Right-of-Way line '. "', '. . " recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING: Thence South 00°27'27" West on said South Right-of-Way line, a distance of 29.65 feet to a point on the centerline of Dry Creek: Thence South 81°08'09" East on the centerline of Dry Creek, a distance of23.01 feet; Thence South 52°23' 12" East on the centerline of Dry Creek, a distance of219.86 feet; Thence South 27°22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distanoe of 37.35 feet: Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a distance of 89.38 feet: Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.1 8 feet; Thence South 01°18'17" Weston the centerline of Dry Creek, a distance of28.31 feet: Thence South 27°52'23" East on the centerline of Dry Creek, a distance of26.19 feet; 3 !~ :" " ", .11:.-,.' . 11 ,II, "., Book: 1212 Page: 882 Thence South 51°13'46," East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41°06'48" East on the centerline of Dry Creek, a distance of79.39 feet; Thence South 33°41 '20" East on the cent,(lrline of Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30°10'59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43 '39" East on the centerline of Dry Creek, a distance of75.83 feet; Thence South 26°02 '09" East on the centerline of Dry Creek, a distance of 245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of 127.14 feet; Thence South 12°52' 13" East on the centerline of Dry Creek, a distance of 82.84 feet; Thence North 89°52'43" East, a distance of 509.42 feet to a point that is 10.00 feet West, measured perpendicular, of the East line of said Northwest Quarter; Thence North 00°05'09" West parallel to said East line, a distance of 1278.92 feet to a point (>\1 the South line ofa parcel recorded in Saline County Register of Deeds Book: 379, Page: 555; ,,:: Thence North 89°54'29" West, a distance of 513 .61 feelto the Southwest comer of a par~) tei.'-a,;!led in Saline County Register of Deeds Book: 1209, page: 477; , ',:, ,::,,:.;. Thence North 00°33 '09" West, a distance of 347.96 feet to the Northeast comer ot:.lrf-\i.U'~el recorded in Saline County Register of Deed Book: 1209, page: 477; :: ' . '-: Thence on said South Right-of-Way line on a curve to the Right, having a radius oF2'~·~07.87 feet, an arc length of 522.05 feet, a chord bearing of South 89°54'23" West. and IJ. ~:'!f!.l!,,~,dlst;}tice of 552.0'4 feet, to the POINT OF BEGINNING. ,,' . '.:, '/:; Said tract contains 1,118,002.76 square feet, 25.666 acres, more qr./:,.:ss. ~~:::;":' .; .. ~." iarcel Sb (LOCATED OUTSIDE THE CITY LIMITS, BU~~:~lREd~~ 'ADJACENT TO THE CITY BOUNDARY) " , ::, ."':' A tract of land located in the Northwest Quarter of -Section 35, Township 14 South. Range 3 West of the 6th Principal Meridian, Saline County, Kansas, rlll'.rre pm:t,~,ularly described as follows: :' ~:-... Commencing at the Northeast Comer of sai;:l'NiYrthwest~Quarter; Thence on an assumed bearing of South O()'~!lS;09:~'1i':llst on the East line of said Northwest Quarter, a distance of 1696.31 feet to the POINT ,OF Bf.:{):lNNING; Thence South S9Q52'43" West, a ~i:;,t~~l;?e Of~\'i9.42 feet to a point on the centerline of Dry Creek; Thence South 12°52'13" East on, the ct;,\ter,lj.ne of Dry Creek, a distance of32.97 feet; Thence South 11°37'0'7" &v;t~n the cen,mriine of 01)' Creek, a distance of 144.21 feet; Thence South 04°29'24" E,:;.!;t on th~.~enterline of Dry Creek, a distance 0(90'.73 feet; Thence South 05°3O"~~:' E;.:~; on ~J:;,~ ~enterllne of Dry Creek, a distance of 140.25 feet; Thence South a8°46:J1" Ei;.s~ iii',' tile centerline of Dry Creek, a distance of 145.30' feet; Thence South 14°0-7' i:-3::; East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 1 i'24'04·(t;~:si on the centerline of Dry Creek, a distance of 159.13 feet; Thence SOIl:l;{!:i4;'.I2'44'! Bast on the centerline of Dry Creek, a distance of 82.0'6 feet; Thence SOU!kC·;1045'11" East on the centerline of Dry Creek. a distance of 56.70 feet to the South line of.:.ai4 NOl'~'!\;:est Quarter; Th(lf>,;i~ f;.)uth 89°59'23" East, a distance of 336.&7 feet to the Southeast comer of said Northwest .Q)larir.f::, " . ·H,\~,r.·ce }!oith 00'°05'0'9" West on the East line of said Northwest Quarter, a distance of 930'.0'7 feet to t\i(', POINT OF BEGINNING. ,Sciid tract contains 408,268.12 square feet, 9.3725 acres, more or less. farcel 6 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 611l Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of South 89"54 '47" East on the North line of said Northwest Quarter, a distance of 13 0.18 feet; Thence South 000.20"0'0" East on the East Railroad Right-of-way line, a distance of 43.23 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: ,96. pg: 82, said point being the POINT OF BEGINNING; Thence South 88°41'33" East on said South Right-of-Way lioe, a distance of214.37 feet; Thence North 01°18'27" Easton said South Right-of-Way line, a distanceofl7.00 feet; Thence South 88°41 '33" East on said South Right~of-Way line, a distance of5a.00 feet; Thence South 01°18'27" West on said South Right-of-Way line, a distance ofl7.O'O feet; Thence South 8?-28'33" East on said south Right-of-Way line, a distance of475.10feet; 4 Book: 1212 Page: 803 Thence South 89°55'33" East on said South Right-of-Way line, a distance of 103.18 fe~t to a Permanent Easem,ent line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 87; Thence South 59°58'41 East on said Easement line, a distance of 171.05 feet; Thence on a curve to the left, having a radius of28197.81 feet, an arc length of 200.80 feet, a chord bearing of South 88°48'46" East, aehord distance of 200.80 feet; Thence North 00°59'27" East continuing on said Easement line, a distance of 893 0 feet to a point on said South Right-of-Way line, Thence South 89°55'33" East on said South Right-of.Way line, a distance of 47.02 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28707.87 feet, an arc length of t85.40 feet, a chord bearing of South 89°17'33" East, a chord distance of 185.40 feet; Thence South 00°31'27" West on said South Right-of-Way line, a distance of 30.00 feet; :': Thence continuing on said South Rigilt-of-Way line on a curve to the Left, having a radi.~,~ of 28737.87 feet, an arc length 0[30.10 feet, a chord bearing of South 89°30'33" East, a ch<=,Y,1·d4:!311Ce 30.10 feet; ,'s, '''':' Thence North 00°27'27" East on said Right-of-Way line. a distance of 0.35 feet tI?,Jliii,Cli:nterline of Dry Creek; ~ ;., ... ,::: Thence South 81008'09" East on the centerline of Dry Creek, a distance of23-.. 0l feez}' ',:: Thence South 52°23' 12" East on the centerline of Dry Creek, II distance 0(f.~9.a{'i feci;:::' Thence South 27022'56" East on the centerline of Dry Creek, a distance 6f·164.03'.t'eet; Thence South 21°34'53" East on the centerline of Dry Creek, a distance i,,1~26.28}eet; Thence South 15°37'44" West on the centerline of Dry Creek, a dh:i~e l:if:(::1{'(}4 feet; Thence South 02°58'02" West on the centerline of Dry Creek, ~X\i'stance Of37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, li.iH~tancc:.{)f65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a ~W~,*!'!ce of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline ofUry Creek, a distance of 64.18 feet; Thence South 01018' 17" West on the centerline ot'IlrA ... ,Creer;;,a distance of28.31 feet; Thence South 27°52'23" East on the centerli'1~. of Dry' ¢f'~k, a distance of 26.19 feet; Thence South 51 °13'46" Easton the centerliY';; ;'It'Drv c.'ieek, a distance of 75.44 feet; Thence South 41 °06'48" East on the centerlin~' oi'ti~;."Creek, a distance of79.39 feet; Thence South 33°41 '20" East on the. r.:.;!nterlit::c.j· .. )f Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on th.¢:~"'l)~erlin~ .6fDry Creek, a distance of 108.89 feet; Thence South 30°10'59" East o1l;t\1e cell'1ilf¥:ue of Dry Creek, a distance ofl06.40 feet; Thence South 39°43'39" Eafii,:on the l?en,t;i\Tiine of Dry Creek, a distance of75.83 feet; Thence South 26°02'09" E,mt on the centerline of Dry Creek, a distance of 245.31 feet; Thence South lsoI8'0)!' Eil+:?n th",> i:enterline of Dry Creek, a distance ofl27.14 feet; Thence South 12°57:,XY' BaSnl'ri the centerline of Dry Creek, a distance of 115.82 feet; Thence South 11?3'1'(rl"~~as! on the centerline of Dry Creek, a distance of 144.21 feet; Thence South \\iio2!l'24"'1~:iSt on the centerline of Dry Creek, a distance of 90.73 feet; Thence Sout!:~ M~;W'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence ~\.luth;)i~016' 4T' East on the centerline of Dry Creek, a distance of 145 .. 30 feet; Then0~;' Sop~h 14°vi" 13" East on the centerline of Dry Creek, a distance of 99.03 feet; Theli'~§'..3.o'uth 19°24'04" East on the centerline of Dry Creek, a distance of 159.13 feet; ,:r.htmce :,~~,.th 14°12'44" East on the centerline of Dry Creek, a distance of 82.06 feet; . ': "Til~!;l;~ South 07"45'11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South .. ' line (,j" said Northwest Quarter; . T)1~>lce North 89°59'23" West on said South line, a distance of 2185.38 feet to the East Railroad' '. Right-of-Way line; Thence North 00°20'00" West on the East Railroad Right-of-Way line, a distance of2586.58 feet to the POINT OF BEGINNING. Said tract contains 4,732,112.1 8 square feet (108.634 acres) mote or less. iarce17 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARy) A tract ofland located in the Southwest Quarter of Section 35, TownShip 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows; Commencing at the Southwest Comer of said Southwest Quarter; Thence on an assumed bearing of South 89°50'27" East, a distance of 133.1 0 feet; Thence North 00"10'00" West, a distance of 2647.37 feet to the intersection of the East Railroad Right-ofWay line and the North line of said Southwest Quaner; , Thence South 89°59'23" East on said North line, a distance of 2185.38 feet to the centerline of Dry Creek and the POINT OF BEGINNING; Thence South 89°59'23" East on said North line, a distance ofJ36.87 feet to the Northeast comer of said Southwest Quarter; 5 I :, ·,1·.·. )j.' .... 'T '.:., J Book: 1212 Page: 804 Thence South 00°05'01" East on the East line of said Southwest Quarter. a distance of 1261.92 feet to a point on a line that is 59.00 feet North of the South !Jne of the North Half of said Southwest Quarter; Thence North 89°54'56" West on a line that is 59.00 feet North of said South line, a distance of 505.20 feet to the centerline of Dry Creek; Thence North 45°29'12" East on the centerline of Dry Creek, a distance of 19.48 feet; Thence North 16°52'13" East on the centerline of Dry Creek, a distance ofS8.65 feet; Thence North 20°49') 5" East on the centerline of Dry Creek, a distance of 66.10 feet; Thence North 01 °28' 45" West on the centerline of Dry Creek, a distance of 85.91 feet; Thence North 09"51'52" West on the centerline of Dry Creek, a distance of 138.24 feet; Thence North 07"01'2S" West on the centerline of Dry Creek, a distance of20S.97 feet; Thence North 14°11 '36" Weston the centerline of Dry Creek, a distance of 133.01 feet; ;'> Thence North 03°21' 16" West on the centerline of Dry Creek, a distance of 61.41 feet; ;': Thence North 16"01'53" East on the centerline of Dry Creek, a distance of 66.66 feet; . <:, :,: O •• ::.. ••• Thence North 38°43'53" East on the centerline of Dry Creek, a distance of 100.64 fellt;.,. '.'! Thence North 28°05'19" East on the centerline of Dry Creek, a distance of 99.20 fef,lt; :,:,:.:'. Thence North 32°31 '29" East on the centerline of Dry Creek, a distance of 12S.2~:t~!;:t;."",: Thence North 16°16'22" East on the centerline of Dry Creek, a distance of 87 . .;32 fef}!;. .. Thence North 07°42'42" West on the centerline of Dry Creek, a distance or:5·5,~~.,feeti:: Thence North 17°02'33" West on the centerline of Dry Creek, a distanc~ .. (lf 42.9~;::Jeet; Thence North 07°45'11" West on the centerline of Dry Creek, a distanw~,ofO.l~Heet to the POINT OF BEGINNING. .:.:;.': ... /."-.. :':' ", ," Said tFactcontains 574,225.86 square feet (13.182 acres) more·l~t·less. :':' ~arcel 8 (LOCATED OUTSIDE. THE CITY LIMITS, BUT' ~~~~ Y ADJACENT TO THE CITY BOUNDARy) . A tract of land located in the Southwest Quarter of$~?tion ~;>; Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, KI':~~I,lS, moii~:jrticularly described as follows: ~ .,' .... Beginning at the Northwest comer of the ·Vr'he:.ttridge Addition to Salina Kansas, Saline County, Kansas; . ": :.: . Thence on an assumed bearing ofN::,i,th 0002JJ'00" West on the East Railroad Right-of-Way line, a distance of 1019.03 feet to the ))lc:>rth liil'; oriiaid Southwest Quarter; , Thence South 89°59'23" E..jt on said ~/rih line, a distance of2185.38 feet to the centerline of Dry Creek; .;.... ';. Thence South 07°45 '.W' E:;~t ;':'0 th.e centerline of Dry Creek, a distance of 0.18 feet; Thence South 17°02'3:;'" Eas .. Oil the centerline of Dry Creek, a distance of 42.95 feet; Thence South 07?4,2' 4;!?; '11;!!i!. on the centerline of Dry Creek, a distance of 55.15 feet; Thence South i 6°J 6'22'" >Vest on the centerline of Dry Creek, a distance of 87.32 feet; Thence SOll\;{~~~:; 1 '29" West on the centerline of Dry Creek, a distance of 125.25 feet; Thence ';;OUtli :t.ll·OS'19" West on the centerline of Dry Creek, a distance of 99.20 feet; TheJl~G' So.;;111 38"43 '53" West on the centerline of Dry Creek, a distance of 100.64 feet; The;[l~~ .f6uth \6°07'53" West on. the centerline of Dry Creek, a distance of 66.6~ feet; TheDc,' i\\'-".\th 03°27' 16" East on the centerline of Dry Creek, a distance of 61.41 feet; -I'lv,;lije South 14°11 '36" East on the centerline of Dry Creek, a distance of 1.3;3.01 feet; Thf;.;!,~e South 07°07'28" East on the centerline of Dry Creek, a distance of208.97 feet; T!Wllce South 09°51 '52" East on the centerline of Dry Creek, a distance of 138.24 feet; .' 'lhence South 0 I °2S' 45" East on the centerline of Dry Creek, a distance of 85.97 feet; Thence South 20°49'1 5" West on the centerline of Dry Creek, a distance of 66. 70 feet; Thence South 16"52'13" West on the centerline of Dry Creek, a distance of 58.65 feet; Thence South 45"29' 12" West on the centerline of Dry Creek, a distance of 19.48 feet to a line 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West parallel to said South line, a distance of393.30 feet to the East line of said Wheatridge Addition; Thence North 00°23'36" West on the East line of said Wheatridge Addition, a distance of 243.96 feet to the North line of said Wheatridge Addition; Thence North 89°51 '19" West on the North line of said Wheatridge Addition, a distance of 1618.00 feet to the POINT OF BEGINNING. Said tract contains 2,220,091.93 square feet (50.966 acres) more or less. ~arcel 9 (LOCATED OUTSIDE TIIE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARy) That part of the North Half (N Y. ) of the Southeast Quarter (SE '.4) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 611> P.M., lying West of 1-35 Highway, less a 1.85 acre tract described as follows: Beginning at the Southwest comer of said NY. of the SE 6 Book: 1212 Page: 805 ~; thence Northerly along, the West line 'of said N Y. of the SE Yo to a point 1379 feet North of the Southwest comer of the SE V-of Section 35; thence Easterly parallel to the SQuth line of said SE Vto a point on the westerly right-of-way line 1-35 (now 1·13S) Highway. said point being 1267.26 feet West of the East line of said SE Yo, thence with an angle of90002' 45" to the right along said right-ofway line to the South line of said N Y. of the SE 1A; thence Westerly along said South line of said N Y. of the SE V. to the point of beginning; "ine South Twenty (20) feet of the North,east Quarter (ME 1A) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 611> P.M .• Saline County. Kansas, lying west of the right-of-way of Interstate 1·135. The abow described land contains 1,780,310.41 square feet or 40.870 acres, more orless. The total benefit fees to be charged to all property within the KS.A. 12-6a19 Area shall equal appr~~il~i4:i!;ly 85.3% of the total cost of the Water System Improvements; approximately 29.1% of the total,~,W!f' 9f the Stri;et Improvements; approximately 79.1 % of the total cost of the Sanitary Sewer Improvemen~, 'jne:t~1tal benefit fees shall be charged to each Parcel and unplatted tract ofland within the KS.A. 12-6a19 Ai'~~i'-::>!ftiaily per acre. Pursuant to KS.A. 12-6aI9, the benefit fee shall be assessed against the K.S.A. q~Gait;,¥:),;~:it'the time the owners of property within the K.S.A. 12-6a19 Area request, by petition, to be $IJrved b)":ihe Water System lmprovements andlor the Sanitary Sewer Improvements, or at such time as ~~ c·i;'/~~$.,~e(,~uest. by petition to connect to the Street Improvements (including, but not limited to, a requdt to mliici i:(iiiveway cut onto the Street Improvements). The benefit fee shall be assessed only against th!l,~ 'portion o.fthe KS.A. 12-0019 Area that is described in such petition requesting senrice. :. ': .. . ~ >. :,: '.:-The benefit fee shall be due and payable at the time the property begins being served by the Improvement, and shaH be subject to the same interest rate as assessmen~Hlgainst the property Qriginally included in the Improvement District. If the benefit fee is charged after thd?<'nds ,m,§ued by the City to pay the costs of the Improvements have been repaid, then the benefit foo shall bc::,j!iJ,jJ in one lump sum. If the benefit fee is charged while the bonds issued by the City to pay ti~l ~~~~it'l?fihe Improvements are still outstanding, then a portion of the benefit fee shall be paid in one lump:-;mm-'{etjual to that portion of the bonds that have been repaid) and the remainder of the benefit fee sh!ill be p;i(j'in equal annual installments (equal to that portion of the bonds that are still outstanding). Any,1li':{\i,fit fee:>:' 'paid shall be applied to the City's general bond and interest fund. .' ' :,'. ' Section 6. Pursuant W,~he pro~i~jons of K.S.A. 12-6,110 et seq., the City intends to grant to the owners of Parcel 10, as descri.lmd in S~";ti~~) 1, a delay in the payment of special assessments for a period of 10 years from the date such sper,·,la!, !ISSeSSJI)~n'ts are levied, or until such property is platted or otherwise developed as described in K.S.A. 17:;p,11(AJ':~~!1.¥. Section 7. :',:', 'nie CitY Clerk shall file a certified copy of this Resolution with the Register of Deeds of Saline (.ourli~';;, ~sas. " .~ Sec~t;;'l ~~ This Resolution shall take effect after its passage and publication once in the official city new~p.lIpe-/"· .. .:" ADfJ.'PTED AND PASSED this 26th day of April, 20 I hereby certify that the foregoing is a true and correct copy of the original Resolution passed,b!, ~h.e_ ~o~_erning Body on the 26th day of April, 2010. ~~ Lieu Ann Elsey. CMC, City Clerk 7 ,~\f ~doU &~ --------------------------~------------------ Commission Action # CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS April 26, 2010 4:00p.m. The City Commission convened at 3:00 p.m. in a Study Session Joint City-County Meeting. The Regular Meeting ofthe Board of Commissioners was called to order at 4:00 p.m. in Room 107, CityCounty Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Aaron G. Peck, Chainnan presiding Commissioner Samantha Angell Commissioner Tom Arpke Commissioner Nonnan Jennings Commissioner M. Luci Larson Absent: None DEVELOPMENT BUSINESS (7.7) Resolution No. 10-6731 detennining the advisability and authorizing improvements in the Magnolia Commons Addition. 10-0109 Moved by Commissioner Angell, seconded by Commissioner Arpke, to adopt Resolution No. 10-6731. Aye: (5). Nay: (0). Motion carried. ADJOURNMENT 10-0112 , Moved by Commissioner Angell, seconded by Commissioner Arpke, that the Regular Meeting of the Board of Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:02 p.m. [SEAL) ATTEST: L£ewAJ"UIlIE4e;y Lieu Ann Elsey, CMC, City Clerk lsi Acwo-rvG. p~ Aaron G. Peck, Mayor I hereby certify that the foregoing is a true correct excerpt of the action taken by the Governing Body at its regular meeting on April 26, 2010 regarding Resolution No. 10-6731. Page 1 Publisher's Affidavit .!..IT.'--_TA.IM·f....,f.a.. n. ""'y"-""M""'o,Qd""'I"'-'inl.L-__ , being duly sworn declare that I am thp"'-__->.I.a;.e'l'ga,..,....l..".C... o.. .. .o .LIr""d.. i..u D..aa.Lltowf'--___ of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Resolution 10-6731 Notice has been correctly published in the entire issues of said newspaper one time, publication being given in the 2010 day of ;apr.: I A.D. 20 I D ~~~ Printer's Fee $2559_00 • OTARY PUBLIC. State 01 Kansas WENovCHROBAK My Appt. Exp.S -zz ..zp I 'l.,. (Published In the Salina Journal April 30, 2010) RESOLUTION NUMBER 1Q..6731 A RESOLUTION SET. TlNG FORTH FINDINGS AND DETERMINATIONS OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE ADVlSABILIl'Y OF AND AUTHORIZING THE CONSTRUCTION OF CERTAIN IMPROVEMENTS PURSUANT TO K.S_A. 12-63.01 ~t seq. WHEREAS, a petition was filed with the CIty Clerk for the City of Sa· Iina, Kansas (the ·City") pn April 26, .2010, proposmg certaIn Improvements pursuant to K.S.A. 12-6a01 et seq. (the ''Petilion"); and WHEREAS, the PetitIon sets forth: (a) the general nature of the proposed improvements; (b) the estl. mated or probable cost of the proposed improve. ments; IC) the extent of the proposed improve. ment district to be as. sessed for the cost of the proposed improvements: (dl the proposed method of assessment; (e) the proposed apportionment of the cost between the improvement district and the City at large; and (f) a request that such improvements be made wnhout not!ce and hearing as reqUIred by K.S.A. 12-6a04(a); and WHERE'AS, the owners of record of more than one-half of the property 10-~Ied wilhin the proposed Improvement district have signed the Petition; and WHEREAS, no signatures have been withdrawn from the petitIon before the Governmg Body began .consideratIon of the Petition; and WHEREAS, K.S.A. 12-6a04 provides that tho Governing Body may authorize and order public improvements without notice . and hearing after a sufficient petltlon has been filet!; ant! • WHEREAS, the governing bOdy has reviewed and considered the PrelIminary Ell9lneerin.9 estimate and FeasibilIty RePOrt prepared by the City Engineer and agrees with the conclusions set forth therein; and • . WHEREAS, the governIng body has determined that it is appropriate to deSignate Virgima Drive I(irginia Court and MagnO: Ila Road as "arterial streets," as that term is used In K.S.A. 12-6a19 but. solely for the PUlJX1ses of Imposing benefit fees pursuant to K.S_A. 12-6a19; NOW THEREFORE BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA KANSAS, AS FOLLOWS. SectIon 1. The Governing Body hereby finds that the Petition IS suffiCient and further finds and de: termines that ft is neces. sary and advisable fo make the following imn·"veme-nts:-.._ ~.-(a) '1 oe nature of the imRrovements are aSfofiows: The curb, guttering paving, grading ana drail)age for ap. r:roxlmately 1,600 Itn~al feet of Virgima Dnve (the Virginia Drive Street 1m. r:rovements); 920 hoeal feet of Virginia Court, (the VIrginia Court Street 1m. provements); and 625 lineal feet of Magnolia Road, (the MagnOlia Road Street Improve'!Jents) and collectIvely the "Street Improvements'. The Installation of approXimately 10,073 linear feet of twelve-Inch water main, 965 lineal feet of ten-inch water maIn, 80 lineal feet of six-inch water main, fire hydrants, valves, fittings, and all appurtenances thereto (the Water System Improvements)_ The installation of !Wproximately 356 Imeal feet of fifteen-inch sanitary ~ewer maIn, 2,207 hneal feet ot twelve-inch sanHary l~ewer main, 3,528 meal feet ot eight-inch sanitary sewer main, man~oles, wastewater hft statIon, and all appurtenances tliereto (the Sanitary Sewer Improvements). The installatIon of stormwater detelltion, stormwater pump station and ail. appurtenances thereto (the "Stonn-' water Detention' Pond"). '. The l'1stsliation of . approxImately 2138 fineal feet of stonn sewer, inlets, and all ilftr~~(rfi1;e"sDrain_ age Improve ments')_ (collectively, the "Improvements"). :b) The estimated cost of the Improve-' ments·is: Three mIll/on four hundred fifteen'.' thousand five hun-, dred siXJy-three dollars and Sixty cents . ) ($3,415,563.60). C The boundaries of . t~e . Improvement. dlSlflct to be a$' sassed are: Parcel 1 lot 1, BlOCk f, in the MagnOlia Commons AdditIon Parcel 2 lot 4, Block 1, in the Magnolia Commons Addition Parcei3 ""'" ,2 ~~ hfr8b~rof . the Orelnage.1mprt)wme11tstoba assessed to thft following properties Parcels 1,2, linda s O1\ohurtdrGd percenl:(1ClP%)o1 the Siormwatef Oetentlotl P6nd to be assessed to UUt fDUowlng ptopeTtIS$' Par eelS I, 2. and 3, 4'~~T~rDtai COS1oftJ:1aWater System lmprov9-0 manta to be 8"J' sessed 10 the fo[· Iowingprwel'tfes Parce!:S 1, .2, 3. ,5lgp=~te!y 19.3% of the costs of1t!eSant· tsry sewer 1m provementS to be asSessed tQ~ the fol~ proper· ~'h~:::itt;1,2, 0ua1tOr; Thance 0.. an as ~rn~~~~~fJ\a~l on the West line of strkl Northaast Quar-~~96,\1 ~::nroe 1~J Southwost comer of $. parcel rer:ordad laSS, ~7Q g~~. A1~~r 1168, Pago.: 1808, said polot being the POINT OF BEGINNING, It~~.J!~st en the &outh line 01 said recOrded {laroel, a dis tance 'Clf 1355 10 fest to -the West ~~:ot-w~y line 01 Thence ,on saId Rtght-of W nne on B. a chon:! dlslanee ()f 651~91~ 1h9noeSouth 00"13'42" West 00fj. ttnulng ()fj sald West ~~~.:;W:r J~'60 feat to a 20,00 89"55'zr West on a line parallel to and 20 00 leet north of sa1c\SOUIh 11n9,odis. Janca of 1377,89 ftl9t to safdWest line; 1henceNorlb 00-OS'09" West on ~~~~~W~f~~t; feet. 28195 acres, more or I9ss. ~~~~1W ~~dlrY A~~CEWr ;\8UNtiJi\~ C'TY AtraCloltaridlocatad In • 1M NClnhwoBt deScribed BS loIIawsCommencing at ths .N.oM rthwesl_ Com er of ~g on an as-~~~J~-Wlge:t or:! tile North line of said Nol"thW'eSt Q,uar· \W$~~18nCEF of ~W~"dlstanceol71.18feetto ! a polnt on the south OUTSIDE THE CITY LIMlTS, BUT DI RECTLY ADJACENT TO THE CITY ~Do1~d located In tho Northwest Quarter of SectIOn 35, Township 14 ~Dulh. Rang9 3 West ()f thO 88~41'33· East on said' South ~'9t~t~Wg11~:'3' feat; ThenceNorlh O'''1S'2r East em said South ::~n::-~ Jb"fe£ Thence South 88-41'33" East on said South Right-of-W~ line, 8 ~~eof50W~6 01°18'27"' Weat on Bald South ~.gJ-~~:~ Thence South 87"28'33" East (In said South ~~~~~W:r ~;;:1g 'T''h'e''n ceSoulh 89D65'33" East on said South :1~r::;W:r ~1::1: feel to a Permanent Eaeement line fa corded In the SaDne g::3ttyMI~= ~~ 'ii~South rror2~ ,!e~lstBnce of llleneeSoufll 34"16'2&-East on the centerline' 01 Dl'Y. Creek, a dfstarlc& of ~~~ 30"10'59" Eest on the centerline 0' Dry Crpek, a distance of 106,4Gfeet; lllenceSou1h 39°43'39" East on the centerline of Dry: Creek, a dh;tance Of 75.ealeet; ThaIlceSou1h 26"Q2'09" E'tlstc:rnthe C$nterllne of Dry ~~ f:agrstance of -':'SOU1h 1qG18'03" East on ti1tJ centerline ot DrY. Creek., a dlatal'lc:e of 12714feet; 1lIerwSoUth ~~~M,;e~J~n~r: ft~~ f:eflttB~ of, 1lI9nooSOutil 11OS7'Cl7'" East on the • g:~I~~~~~~ 14421 feet;: ThenceSoIllh 04"29'24" Eastonlhec9nterllne of Dry ~~lle~ dIstance of Thence South 05-aO'S3" East on the ~~I~~lIs~cf~ East A.allroed Rlghl-orKway line, a distance of 2500.56 feet to tho. pOINT OF BEGIt-lNING', Said tract contains 4,732,112.16 Bqusro' freet (10&634 acres) momorless. me Dry Creek. e d1stattee Of 0.18 feet te) the ~bttl;~~G. '._ Said tract. contains 514,225 86 square feef (1S. t82, acres) l\"IQmorlesa Parcel 7 (LOCATED ,", OUTSIDE THE CITY ., ~ LIMITS. BUT PI-.Thenoe on an 9.8. ~6CT1'tH~AgTW ~~'bo~t~~:t ~~:i~tDo~Jt located ~~~~/'It,~~ In the Southwest 1Ilatanc:e 0' 10'19.03 Quarter of $ecHOn as, fe$t to the. Nortff ifnI) "2:o'f.'~~ on lile §g~~!r: O~rt~: distance ot 128i.92 feet to a poInt on a An(J thai Is 59.00 teet North of tM SOuth line of the Nortb Half of said s,uthwest ~~::NOrlh ~:s::a~s '1r.Jo cree' North of 9l!.1d south Una, a dl"ltt\ncB of 505.20 feet to tfla conterllneotC1yCi"eOk. ThenceNol1h 045OS'12' East on 111& centMlne of Pry' Creek, a d!8tBnC6 of ~~c!,eerJl,J1h • 16"SZts" East on the centeri1l19 of Of)' ~~IJt. dl$tallC1l Of TbencaNorth 2OG4S't5" EIl9i: on tiUt domerflne of Dry Cleek, a dIstance of ~~r?o~irth 01"28'4S"Weston thO centerlln9 01 Dry ge9~kfe:t; ~nce Df ~~:oStontno g~~!rl~~~C:~~ 138.24feet; 1llencoNOOb 07"07'2:8~Wmonths centerlIne of Dry gwi1~18I8nce of 1l'lenceNorth 14°11'aa-West on the Centerline' of Dry' Craalc,. a d1S1ance of .1."S.3"0,.1"<fa,e,,l1; 1 03·27'16"~onIh9 centerline ,of Dry ~f~\:t dllltanoo of :rn~~onlhe centerlIne) of =Df¥. cr~k,;"'~()f 66.66feet; ~, \ ThDncoNorth SB°4$'5:r En8l:,on the centerline • of bry rM~~I.rn:eOf of eald SouttfWtJ$t ~~~,: 89°Bf.2GO East, on I $BId north One, a'dls--• -tanC9 Of 218538 feet to the (lEInWllne.of "'YCrc"" OThre4n5t'1e1,$"o uth East on the west of h,e: ~Ight-of>.~otlnter' atatel·1$5, • The abovilr described • land contain, 11780,$1.0,41 SQUate teet (lr 40,870 8O!'I3S, I moreor~ss. The total benefit f688 to b9 charged ttl aU property \.'llttItrt Ille K.SA t2.&:19' ~ shall e'quat ttppmxl·· th&,fmlll SYstem. W:~: FILE NO. 2010-01 FINAL ENGINEERING REPORT PETITION NO. 4326 MAGNOLIA COMMONS ADDITION STREET, DRAINAGE, and UTILITY IMPROVEMENTS Virginia Drive, Virginia Court March 2012 SCOPE OF WORK The curb, guttering, paving, grading and drainage for approximately 1,600 lineal feet of Virginia Drive (the Virginia Drive Street Improvements); 920 lineal feet of Virginia Court, (the Virginia Court Street Improvements); and 625 lineal feet of Magnolia Road, (the Magnolia Road Street Improvements) and collectively the "Street Improvements". Note: The Commission designated Virginia Drive, Virginia Court and Magnolia Road as "arterial streets," as that term is used in K.S.A. 12-6a 19. The installation of approximately 10,018 lineal feet oftwelve-inch water main, 1,038 lineal feet ofteninch water main, 102 lineal feet of six-inch water main, fire hydrants, valves, fittings, and all appurtenances thereto (the Water System Improvements). The installation of approximately 377 lineal feet of fifteen-inch sanitary sewer main, 2,225 lineal feet of twelve-inch sanitary sewer main, 3,535 lineal feet of eight-inch sanitary sewer main, manholes, wastewater lift station, and all appurtenances thereto (the Sanitary Sewer Improvements). The installation of stormwater detention, stormwater pump station and all appurtenances thereto (the "Storm water Detention Pond"). The installation of approximately 2,163 lineal feet of storm sewer, inlets, and all appurtenances thereto (the "Drainage Improvements"). IMPROVEMENT DISTRICT Parcell Lot 1, Block 1, in the Magnolia Commons Addition Parcel 2 Lot 4, Block 1, in the Magnolia Commons Addition Parcel 3 Lot 3~ Block 1, in the Magnolia Commons Addition ParcellO An unplatted tract of land located in the South half of the Southeast Quarter of Section 26, Township 14 South, Range 3 West of the Sixth Principal Meridian in Saline County, Kansas, more particularly descri~ed as follows: Commencing at the Southwest comer of the Southeast 1,4 of said Section 26; thence North along the West line of said Southeast 1,4 on an assumed bearing of North 00°09' 15" East, a distance of 96.25 feet to the POINT OF BEGINNING; thence North 89°38'00" East, a distance of 22.40 feet; thence North 66°25'36" East, a distance of 38.07 feet; thence North 81 °21 '24" East, a distance of 489.67 feet; thence North 09°41 '31" West, a distance of 567.93 feet; thence North 20°27'30" West, a distance of 198.30 feet; thence North 35°49'23" West, a distance of 242.34 feet; thence North 52°55'59" East, a distance of 25.00 feet to a point on the westerly right-of-way of 1-135 highway; 2 thence northwesterly along said RIW on a non-tangent curve to the left having a radius of 5579.58 feet, an arc distance of 223.78 feet, said curve having a long chord of 223.77 feet and a bearing of North 38°12'31" West; thence South 89°57' IS" West, a distance of 112.89 feet to a point on the West line of the Southeast 1,4 of said Section 26; thence South 00°09' IS" West along said West line, a distance of 1221.88 feet back to the POINT OF BEGINNING. The above described tract ofland contains 469,826 square feet or 10.79 acres, more or less. Parcel 11 Lot 1, Block 1, in the Premier Addition. (the "Improvement District"). The following lot is excluded from the Improvement District because it is not a developable lot and therefore is not benefitted by the Improvements: Block 1 Lot 2 in the Magnolia Commons Addition is dedicated as a common area/drainage easement on the plat. METHOD OF ASSESSMENT The assessment with accrued interest to be levied as a special assessment tax upon the property included with the benefit district concurrent with the general property tax and shall be payable in fifteen equal annual installments. Each parcel in the Improvement District shall be assessed per acre for costs of the various Improvements benefitting such lot, as described in "Apportionment of Cost" below. APPORTIONMENT OF COST The proposed apportionment of cost between the Improvement District and the city at large is: Certain costs of the Improvements shall be paid by the Improvement District and certain cost of the Improvements shall be paid by the city at large, as follows: Costs chargeable to the Improvement District 1. Approximately 71.1 % of the Street Improvements to be assessed to the following properties: Parcels 1, 2, 3, and 11. 2. One hundred percent (l 00%) of the Drainage Improvements to be assessed to the following properties: Parcels 1,2, and 3. 3. One hundred percent (100%) of the Stormwater Detention Pond to be assessed to the following properties: Parcels 1,2, and 3. 4. Approximately 14.7% of the total cost of the Water System Improvements to be assessed to the following properties: Parcels 1, 2, 3, 10, and 11. 5. Approximately 17.8% of the costs of the Sanitary Sewer Improvements to be assessed to the following properties: Parcels 1, 2, 3, 10, and 11. Costs chargeable to the City-At-Large 1. Approximately 28.9 % of the Street Improvements. 3 2. Approximately 85.3% ofthe Water System Improvements. 3. Approximately 82.2% of the Sanitary Sewer Improvements. Pursuant to the provisions of K.S.A. 12-6a19, there is additional property that benefits or will benefit from the Improvements, but is not included within the Improvement District because the property is currently outside the City limits. The City intends to charge benefit fees in the manner set forth in K.S.A. 12-6a19 for any owner of property within the tracts of land shown on the map attached hereto as Exhibit A, referenced as the "K.S.A. 12-6a19 Area," and legally described as follows: Parcel 4 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northeast Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northeast Quarter; Thence on an assumed bearing of South 00°05'09" East on the West line of said Northeast Quarter, a distance of 1696.31 feet to the Southwest corner of a parcel recorded in Saline County Register of Deeds, Book: 1168, Page: 1808, said point being the POINT OF BEGINNING; Thence North 89°52'43" East on the South line of said recorded parcel, a distance of 1355.10 feet to the West Right-of-Way line ofI-135; Thence on said Right-of Way line on a curve to the Right having a radius of 5579.65 feet, an arc length of 552.14 feet, a chord bearing of South 02°36'23" East, a chord distance of 551.91 feet; Thence South 00°13'42" West continuing on said West Right-of-Way line, a distance of 363.60 feet to a point 20.00 feet North of the South line of said Northeast Quarter; Thence North 89°55'27" West on a line parallel to and 20.00 feet north of said South line, a distance of 1377.39 feet to said West line; Thence North 00°05'09" West on said West line, a distance of 910.25 feet to the POINT OF BEGINNING. Said tract contains 1,254,306.80 square feet, 28.795 acres, more or less. Parcel Sa (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 1585.99 feet; Thence South 00°27'27" West, a distance of 71.18 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 00°27'27" West on said South Right-of-Way line, a distance of 29.65 feet to a point on the centerline of Dry Creek; Thence South 81 °08'09" East on the centerline of Dry Creek, a distance of 23.01 feet; Thence South 52°23' 12" East on the centerline of Dry Creek, a distance of 219.86 feet; Thence South 27°22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of 26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of 37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; 4 Thence South 35°17' 41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.18 feet; Thence South 01 °18' 17" West on the centerline of Dry Creek, a distance of 28.31 feet; Thence South 27°52'23" East on the centerline of Dry Creek, a distance of 26.19 feet; Thence South 51 ° 13' 46" East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41 °06' 48" East on the centerline of Dry Creek, a distance of 79.39 feet; Thence South 33°41 '20" East on the centerline of Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30° 10' 59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43 '39" East on the centerline of Dry Creek, a distance of 75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of 245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of 127.14 feet; Thence South 12°52' 13" East on the centerline of Dry Creek, a distance of 82.84 feet; Thence North 89°52'43" East, a distance of 509.42 feet to a point that is 10.00 feet West, measured perpendicular, of the East line of said Northwest Quarter; Thence North 00°05'09" West parallel to said East line, a distance of 1278.92 feet to a point on the South line of a parcel recorded in Saline County Register of Deeds Book: 379, Page: 555; Thence North 89°54'29" West, a distance of 513.61 feet to the Southwest corner of a parcel recorded in Saline County Register of Deeds Book: 1209, page: 477; Thence North 00°33'09" West, a distance of 347.96 feet to the Northeast corner of a parcel recorded in Saline County Register of Deed Book: 1209, page: 477; Thence on said South Right-of-Way line on a curve to the Right, having a radius of 28707.87 feet, an arc length of 522.05 feet, a chord bearing of South 89°54'23" West, and a chord distance of 552.04 feet, to the POINT OF BEGINNING. Said tract contains 1,118,002.76 square feet, 25.666 acres, more or less. ParcelSb (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northeast Corner of said Northwest Quarter; Thence on an assumed bearing of South 00°05'09" East on the East line of said Northwest Quarter, a distance of 1696.31 feet to the POINT OF BEGINNING; Thence South 89°52' 43" West, a distance of 519.42 feet to a point on the centerline of Dry Creek; Thence South 12°52' 13" East on the centerline of Dry Creek, a distance of 32.97 feet; Thence South 11 °37'07" East on the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04 °29' 24" East on the centerline of Dry Creek, a distance of 90.73 feet; Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46' 47" East on the centerline of Dry Creek, a distance of 145.30 feet; Thence South 14°07' 13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 19°24' 04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" East on the centerline of Dry Creek, a distance of 82.06 feet; Thence South -07°45' 11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence South 89°59'23" East, a distance of 336.87 feet to the Southeast corner of said Northwest Quarter; Thence North 00°05'09" West on the East line of said Northwest Quarter, a distance of 930.07 feet to the POINT OF BEGINNING. 5 Said tract contains 408,268.12 square feet, 9.3725 acres, more or less. Parcel 6 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 130.18 feet; Thence South 00°20'00" East on the East Railroad Right-of-way line, a distance of 43.23 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of 214.37 feet; Thence North 01 °18'27" East on said South Right-of-Way line, a distance of 17.00 feet; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of 50.00 feet; Thence South 01 °18'27" West on said South Right-of-Way line, a distance of 17.00 feet; Thence South 87°28'33" East on said South Right-of-Way line, a distance of 475.10 feet; Thence South 89°55'33" East on said South Right-of-Way line, a distance of 103.18 feet to a Permanent Easement line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 87; Thence South 59°58' 41 East on said Easement line, a distance of 171.05 feet; Thence on a curve to the left, having a radius of 28797.87 feet, an arc length of 200.80 feet, a chord bearing of South 88°48' 46" East, a chord distance of 200.80 feet; Thence North 00°59'27" East continuing on said Easement line, a distance of 89.30 feet to a point on said South Right-of-Way line, Thence South 89°55'33" East on said South Right-of-Way line, a distance of 47.02 feet; Thence continuing -on said South Right-of-Way line on a curve to the Left, having a radius of 28707.87 feet, an arc length of 185.40 feet, a chord bearing of South 89°17'33" East, a chord distance of 185.40 feet; Thence South 00°31 '27" West on said South Right-of-Way line, a distance of 30.00 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28737.87 feet, an arc length of 30.10 feet, a chord bearing of South 89°30'33" East, a chord distance 30.10 feet; Thence North 00°27'27" East on said Right-of-Way line, a distance of 0.35 feet to the centerline of Dry Creek; Thence South 81 °08'09" East on the centerline of Dry Creek, a distance of 23.01 feet; Thence South 52°23' 12" East on the centerline of Dry Creek, a distance of 219.86 feet; Thence South 27°22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34' 53" East on the centerline of Dry Creek, a distance of 26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of 37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17' 41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.18 feet; Thence South 01 ° 18' 17" West on the centerline of Dry Creek, a distance of 28.31 feet; Thence South 27°52'23" East on the centerline of Dry Creek, a distance of 26.19 feet; Thence South 51 °13' 46" East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41 °06' 48" East on the centerline of Dry Creek, a distance of 79.39 feet; Thence South 33°41 '20" East on the centerline of Dry Creek, a distance of 109.28 feet; 6 Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30° 1 0' 59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43 '39" East on the centerline of Dry Creek, a distance of 75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of 245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of 127.14 feet; Thence South 12°52' 13" East on the centerline of Dry Creek, a distance of 115.82 feet; Thence South 11 °37'07" East on the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04°29'24" East on the centerline of Dry Creek, a distance of 90.73 feet; Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46' 47" East on the centerline of Dry Creek, a distance of 145.30 feet; Thence South 14°07' 13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 19°24' 04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" East on the centerline of Dry Creek, a distance of 82.06 feet; Thence South 07°45' 11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence North 89°59'23" West on said South line, a distance of 2185.38 feet to the East Railroad Right-of-Way line; Thence North 00°20'00" West on the East Railroad Right-of-Way line, a distance of 2586.58 feet to the POINT OF BEGINNING. Said tract contains 4,732,112.18 square feet (108.634 acres) more or less. Parcel 7 (LOCATED OUTSIDE THE CITY LIMITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Southwest Corner of said Southwest Quarter; Thence on an assumed bearing of South 89°50'27" East, a distance of 133.10 feet; Thence North 00°20'00" West, a distance of 2647.37 feet to the intersection of the East Railroad Right-of Way line and the North line of said Southwest Quarter; Thence South 89°59'23" East on said North line, a distance of 2185.38 feet to the centerline of Dry Creek and the POINT OF BEGINNING; Thence South 89°59'23" East on said North line, a distance of 336.87 feet to the Northeast corner of said Southwest Quarter; Thence South 00°05'01" East on the East line of said Southwest Quarter, a distance of 1267.92 feet to a point on a line that is 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West on a line that is 59.00 feet North of said South line, a distance of 505.20 feet to the centerline of Dry Creek; Thence North 45°29' 12" East on the centerline of Dry Creek, a distance of 19.48 feet; Thence North 16°52' 13" East on the centerline of Dry Creek, a distance of 58.65 feet; Thence North 20°49' IS" East on the centerline of Dry Creek, a distance of 66.70 feet; Thence North 01 °28' 45" West on the centerline of Dry Creek, a distance of 85.97 feet; Thence North 09°51 '52" West on the centerline of Dry Creek, a distance of 138.24 feet; Thence North 07°07'28" West on the centerline of Dry Creek, a distance of 208.97 feet; Thence North 14°11 '36" West on the centerline of Dry Creek, a distance of 133.01 feet; Thence North 03 °27' 16" West on the centerline of Dry Creek, a distance of 61.41 feet; Thence North 16°07' 53" East on the centerline of Dry Creek, a distance of 66.66 feet; Thence North 38°43'53" East on the centerline of Dry Creek, a distance of 100.64 feet; Thence North 28°05' 19" East on the centerline of Dry Creek, a distance of 99.20 feet; Thence North 32°31 '29" East on the centerline of Dry Creek, a distance of 125.25 feet; 7 Thence North 16°16'22" East on the centerline of Dry Creek, a distance of 87.32 feet; Thence North 07°42' 42" West on the centerline of Dry Creek, a distance of 55.15 feet; Thence North 17°02'33" West on the centerline of Dry Creek, a distance of 42.95 feet; Thence North 07°45'11" West on the centerline of Dry Creek, a distance of 0.18 feet to the POINT OF BEGINNING. Said tract contains 574,225.86 square feet (13.182 acres) more or less. Parcel 8 (LOCATED OUTSIDE THE CITY LTh1ITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Beginning at the Northwest comer of the Wheatridge Addition to Salina Kansas, Saline County, Kansas; Thence on an assumed bearing of North 00°20'00" West on the East Railroad Right-of-Way line, a distance of 1019.03 feet to the North line of said Southwest Quarter; Thence South 89°59'23" East on said north line, a distance of 2185.38 feet to the centerline of Dry Creek; Thence South 07°45' 11" East on the centerline of Dry Creek, a distance of 0.18 feet; Thence South 17°02'33" East on the centerline of Dry Creek, a distance of 42.95 feet; Thence South 07°42'42" East on the centerline of Dry Creek, a distance of 55.15 feet; Thence South 16°16'22" West on the centerline of Dry Creek, a distance of 87.32 feet; Thence South 32°31 '29" West on the centerline of Dry Creek, a distance of 125.25 feet; Thence South 28 °05' 19" West on the centerline of Dry Creek, a distance of 99.20 feet; Thence South 38°43'53" West on the centerline of Dry Creek, a distance of 100.64 feet; Thence South 16°07'53" West on the centerline of Dry Creek, a distance of 66.66 feet; Thence South 03 °27' 16" East on the centerline of Dry Creek, a distance of 61.41 feet; Thence South 14°11 '36" East on the centerline of Dry Creek, a distance of 133.01 feet; Thence South 07°07'28" East on the centerline of Dry Creek, a distance of 208.97 feet; Thence South 09°51' 52" East on the centerline of Dry Creek, a distance of 138.24 feet; Thence South 01 °28' 45" East on the centerline of Dry Creek, a distance of 85.97 feet; Thence South 20°49' 15" West on the centerline of Dry Creek, a distance of 66.70 feet; Thence South 16°52' 13" West on the centerline of Dry Creek, a distance of 58.65 feet; Thence South 45°29'12" West on the centerline of Dry Creek, a distance of 19.48 feet to a line 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West parallel to said South line, a distance of 393.30 feet to the East line of said Wheatridge Addition; Thence North 00°23'36" West on the East line of said Wheatridge Addition, a distance of 243.96 feet to the North line of said Wheatridge Addition; Thence North 89°51' 19" West on the North line of said Wheatridge Addition, a distance of 1618.00 feet to the POINT OF BEGINNING. Said tract contains 2,220,091.93 square feet (50.966 acres) more or less. Parcel 9 (LOCATED OUTSIDE THE CITY LTh1ITS, BUT DIRECTLY ADJACENT TO THE CITY BOUNDARY) That part of the North Half (N V:z ) of the Southeast Quarter (SE 1,4) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6th P.M., lying West of 1-35 Highway, less a 1.85 acre tract described as follows: Beginning at the Southwest comer of said N Y2 of the SE 1,4; thence Northerly along the West line of said N V:z of the SE 1,4 to a point 1379 feet 8 North of the Southwest corner of the SE 1,4 of Section 35; thence Easterly parallel to the South line of said SE % to a point on the westerly right-of-way line 1-35 (now 1-135) Highway,said point being 1267.26 feet West of the East line of said SE %, thence with an angle of 90°02' 45" to the right along said right-of-way line to the South line of said N Y2 of the SE 1,4; thence Westerly along said South line of said N Y2 of the SE 1,4 to the point of beginning; . The South Twenty (20) feet of the Northeast Quarter (NE 1,4 ) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6th P.M., Saline County, Kansas, lying west ofthe right-of-way of Interstate 1-135. The above described land contains 1,780,310.41 square feet or 40.870 acres, more or less. The total benefit fees to be charged to all property within the K.S.A. 12-6a19 Area shall equal approximately 85.3% of the total cost of the Water System Improvements; approximately 28.9% of the total cost of the Street Improvements; approximately 82.2% of the total cost of the Sanitary Sewer Improvement. The total benefit fees shall be charged to each Parcel and unplatted tract of land within the K.S.A. 12-6a19 Area equally per acre. Pursuant to K.S.A. 12-6aI9, the benefit fee shall be assessed against the K.S.A. 12-6a19 Area at the time the owners of property within the K.S.A. 12-6a19 Area request, by petition, to be served by the Water System Improvements and/or the Sanitary Sewer Improvements, or at such time as the owners request, by petition to connect to the Street Improvements (including, but not limited to, a request to make a driveway cut onto the Street Improvements). The benefit fee shall be assessed only against that portion of the K.S.A. 12-6a19 Area that is described in such petition requesting service. The benefit fee shall be due and payable at the time the property begins being served by the Improvement, and shall be subject to the same interest rate as assessments against the property originally included in the Improvement District. If the benefit fee is charged after the bonds issued by the City to pay the costs of the Improvements have been repaid, then the benefit fee shall be paid in one lump sum. If the benefit fee is charged while the bonds issued by the City to pay the costs of the Improvements are still outstanding, then a portion of the benefit fee shall be paid in one lump sum (equal to that portion of the bonds that have been repaid) and the remainder of the benefit fee shall be paid in equal annual installments (equal to that portion of the bonds that, are still outstanding). Any benefit fees paid shall be applied to the City'S general bond and interest fund. 9 Petition No. 4326 Magnolia Commons Addition to the City of Salina Total Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 1 LS 72,000.00 72,000.00 2 Common Excavation 29,618 CY 3.15 93,296.70 3 Clearing and grubbing 1 LS 50,000.00 50,000.00 4 Compaction of earthwork 4,104 CY 1.05 4,309.20 5 Asphalt 12Y2" SR 12.5A 185 Ton 86.00 15,910.00 6 Concrete pavement, 9Y2" 1,684 SY 46.00 77,464.00 7 Concrete pavement, 8" 178 SY 55.00 9,790.00 8A Concrete pavement, 8" 8,757 SY 38.40 336,268.80 9 Reinforced concrete valley gutter 69 SY 52.00 3,588.00 10 8" Lime treated subgrade 13,265 SY 5.10 67,651.50 11 Curb & gutter 5,191 LF 16.25 84,353.75 12 Sidewalk ramp, Type I . 6 Ea 825.00 4,950.00 13 Pavement markings 1 LS 8,000.00 8,000.00 14 Type A5-2 curb inlet 8 Ea 4,000.00 32,000.00 15 Type A5-3 curb inlet 4 Ea 4,700.00 18,800.00 16 7' Storm Manhole Type II Ea 4,100.00 4,100.00 17 Storm pipe, 12" RCP 84 LF 28.00 2,352.00 18 Storm pipe, 18" RCP 457 LF 41.00 18,737.00 19 Storm pipe, 30" RCP 483 LF 59.00 28,497.00 20 Storm pipe, 36" RCP 188 LF 82.00 15,416.00 21 Storm pipe, 42" 254 LF 114.00 28,956.00 22 Storm pipe, 54" 819 LF 146.00 119,574.00 23 Storm pipe, 3.0 ft2 RCPHE 42 LF 68.00 2,856.00 24 End section, 12" RC 2 Ea 418.00 836.00 25 End section, 18" RC 2 Ea 460.00 920.00 26 End section, 36" RC 0 Ea 760.00 0.00 27 End section, 54" RC Ea 1,640.00 1,640.00 28 End section, 3.0 ft2 RCHE 2 Ea . 650.00 1,300.00 29 Stormwater pump station 1 LS 149,500.00 149,500.00 30 Concrete flume, 2 ft. 221 SY 64.00 14,144.00 31 Stone riprap D50=iJI Ton 111 SY 55.00 6,105.00 32 Flume inlet 2 Ea 1,140.00 2,280.00 33 Water Pipeline, 12" 9,431 LF 40.00 377,240.00 34 Water Pipeline, 12" HDPE 587 LF 29.00 17,023.00 35 Water Pipeline, 10" 1,038 LF 23.00 23,874.00 36 Water Pipeline, 6" 102 LF 46.00 4,692.00 37 Water fittings 2.93 Ton 1,000.00 2,930.00 38 Fire hydrant & valve assembly 5 Ea 2,900.00 14,500.00 39 Resilient gate valve, 12" 8 Ea 1,300.00 10,400.00 40 Resilient gate valve, 10" 2 Ea 1,025.00 2,050.00 41 Tapping sleeve and valve, lO"xlO"xlO" 1 Ea 2,700.00 2,700.00 42 Directional bore, 12" 557 LF 42.00 23,394.00 43 Bore & steel encasement, 24" 463 LF 260.00 120,380.00 44 Air release assembly 2 Ea 3,955.00 7,910.00 10 45 Sanitary sewer pipeline, 15" 377 LF 117.00 44,109.00 46 Sanitary sewer pipeline, 12" 2,225 LF 71.00 157,975.00 47 Sanitary sewer pipeline, 8" 3,535 LF 20.00 70,700.00 48 Connect to existing manhole 1 Ea 1,600.00 1,600.00 49 Connect to existing system 2 Ea 1,000.00 2,000.00 50 4' Standard Sanitary Manhole Type I 17 Ea 3,750.00 63,750.00 51 Extra depth manhole 175 LF 240.00 42,000.00 52 Trench & Backfill, 8'-10' 583 LF 7.00 4,081.00 53 Trench & Backfill, 10'-12' 984 LF 9.00 8,856.00 54 Trench & Backfill, 12'-14' 569 LF 10.75 6,116.75 55 Trench & Backfill, 14'-16' 564 LF 12.50 7,050.00 56 Trench & Backfill, 16'-18' 717 LF 14.00 10,038.00 57 Trench & Backfill, 18'-20' 800 LF 16.00 12,800.00 58 Trench & Backfill, 20'-22' 473 LF 17.50 8,277.50 59 Trench & Backfill, 22'-24' 554 LF 19.00 10,526.00 60 Trench & Backfill, 24'-26' 615 LF 21.00 12,915.00 61 Trench & Backfill, 26'-28' 278 LF 23.00 6,394.00 62 Plug & abandonment of observation wells 2 Ea 200.00 400.00 63 Sanitary sewer lift station 1 LS 302,000.00 302,000.00 64 Abandonment of existing lift station 1 LS 11,000.00 11,000.00 65 Special trench compaction 1,500 LF 6.00 9,000.00 66 Temporary fertilizer, seed and mulch 10.70 Ac 1,400.00 14,980.00 67 Temporary slope barrier (silt fence) 4,329.00 LF 1.00 4,329.00 68 Temporary ditch check (silt fence) 66.00 LF 1.00 66.00 69 Temporary inlet sediment barrier (gravel bags) 1,400.00 Lb 0.60 840.00 70 Temporary construction entrance 60.00 Ton 22.00 1,320.00 71 Construction staking LS 20,000.00 20,000.00 72 Traffic control LS 14,000.00 14,000.00 73 Steel encasement pipe 110 LF 90.00 9,900.00 Change order No.1 LS 5,024.00 5,024.00 Change order No.2 LS 3,578.00 3,578.00 Change order No.5 LS 9,256.25 9,256.25 SUB-TOTAL: 2,757,569.45 LAND ACQUISITION 37,950.00 DEVELOPER ENGINEERING 42,980.47 CITY EXPENSES (5%) (12-6a01(d» 137,878.47 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 55,151.39 TOTAL: $3,031,529.78 11 Petition No. 4326 Magnolia Commons Addition to the City of Salina Total Street Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.250 LS 72,000.00 18,000.00 2 Common Excavation 2,793 CY 3.15 8,797.95 3 Clearing and grubbing 0.25 LS 50,000.00 12,500.00 4 Compaction of earthwork 3,761 CY 1.05 3,949.05 5 Asphalt, 12Yz" SR 12.5A 185 Ton 86.00 15,910.00 6 Concrete pavement, 9Yz" 1,684 SY 46.00 77,464.00 7 Concrete pavement, 8'~ 178 SY 55.00 9,790.00 8A Concrete pavement, 8" 8,757 SY 38.40 336,268.80 9 Reinforced concrete valley gutter 69 SY 52.00 3,588.00 10 8" Lime treated subgrade 13,265 SY 5.10 67,651.50 11 Curb & gutter 5,191 LF 16.25 84,353.75 12 Sidewalk ramp, Type I 6 Ea 825.00 4,950.00 13 Pavement markings LS 8,000.00 8,000.00 CO No.2 (additional pavement removal on Magnolia) LS 3,578.00 3,578.00 66 Temporary fertilizer, seed and mulch 2.675 Ac 1,400.00 3,745.00 67 Temporary slope barrier (silt fence) 1,082.25 LF 1.00 1,082.25 68 Temporary ditch check (silt fence) 16.50 LF 1.00 16.50 69 Temporary inlet sediment barrier (gravel bags) 350 Lb 0.60 210.00 70 Temporary construction entrance 15 Ton 22.00 330.00 71 Construction staking 0.25 LS 20,000.00 5,000.00 72 Traffic control 0.25 LS 14,000.00 3,500.00 CO No.5 (seeding & erosion control items) 0.25 LS 9,256.25 2,314.06 SUB-TOTAL: $670,998.86 LAND ACQUISITION 9,487.50 DEVELOPER ENGINEERlNG 10,745.12 CITY EXPENSES (5%) (12-6a01(d» 33,549.94 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 13,419.98 TOTAL: $738,201.40 12 Petition No. 4326 Magnolia Commons Addition to the City of Salina Total Storm Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.167 LS 72,000.00 12,000.00 3 Clearing and grubbing 0.167 LS 50,000.00 8,333.33 14 Type A5-2 curb inlet 8 Ea 4,000.00 32,000.00 15 Type A5-3 curb inlet 4 Ea 4,700.00 18,800.00 16 7' Storm Manhole Type II Ea 4,100.00 4,100.00 17 Storm pipe, 18" RCP 377 LF 41.00 15,457.00 18 Storm pipe, 30" RCP 483 LF 59.00 28,497.00 19 Storm pipe, 36" RCP 188 LF 82.00 15,416.00 20 Storm pipe, 42" 254 LF 114.00 28,956.00 21 Storm pipe, 54" 819 LF 146.00 119,574.00 22 Storm pipe, 3.0 ft2 RCPHE 42 LF 68.00 2,856.00 26 End section, 36" RC 0 Ea 760.00 0.00 27 End section, 54" RC Ea 1,640.00 1,640.00 28 End section, 3.0 ft2 RCHE 2 Ea 650.00 1,300.00 31 Stone riprap Dso=l,4 Ton 0 SY 55.00 0.00 32 Flume inlet 2 Ea 1,140.00 2,280.00 65 Special trench compaction 447 LF 6.00 2,682.00 CO No.1 (End section, 42" RC) 1 Ea 1,350.00 1,350.00 66 Temporary fertilizer, seed and mulch 1.783 Ac 1,400.00 2,496.67 67 Temporary slope barrier (silt fence) 721.500 LF 1.00 721.50 68 Temporary ditch check (silt fence) 11.000 LF 1.00 11.00 69 Temporary inlet sediment barrier (gravel bags) 233.333 Lb 0.60 140.00 70 Temporary construction entrance 10.000 Ton 22.00 220.00 71 Construction staking 0.167 LS 20,000.00 3,333.33 72 Traffic control 0.167 LS 14,000.00 2,333.33 CO No.5 (seeding & erosion control items) 0.167 LS 9,256.25 1,542.71 SUB-TOTAL: $306,039.88 LAND ACQUISITION 6,325.00 DEVELOPER ENGINEERING 7,163.41 CITY EXPENSES (5%) (l2-6a01(d» 15,301.99 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 6,120.80 TOTAL: $340,951.08 13 Petition No. 4326 Magnolia Commons Addition to the City of Salina Stormwater Detention Pond Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.083 LS 72,000.00 6,000.00 2 Common Excavation 26825 CY 3.15 84,498.75 3 Clearing and grubbing 0.083 LS 50,000.00 4,166.67 4 Compaction of earthwork 343 CY 1.05 360.15 17 Storm pipe, 12" RCP 84 LF 28.00 2,352.00 18 Storm pipe, 18" RCP 80 LF 41.00 3,280.00 24 End section, 12" RC 2 Ea 418.00 836.00 25 End section, 18" RC 2 Ea 460.00 920.00 29 Pump station 1 LS 149,500.00 149,500.00 30 Concrete flume, 2 ft. 221 SY 64.00 14,144.00 31 Stone riprap D50=1,4 Ton 111 SY 55.00 6,105.00 66 Temporary fertilizer, seed and mulch 0.892 Ac 1,400.00 1,248.33 67 Temporary slope barrier (silt fence) 360.750 LF 1.00 360.75 68 Temporary ditch check (silt fence) 5.500 LF 1.00 5.50 69 Temporary inlet sediment barrier (gravel bags) 116.667 Lb 0.60 70.00 70 Temporary construction entrance 5.000 Ton 22.00 110.00 71 Construction staking 0.083 LS 20,000.00 1,666.67 72 Traffic control 0.083 LS 14,000.00 1,166.67 CO No.5 (seeding & erosion control items) 0.083 LS 9,256.25 771.35 SUB-TOTAL: $277,561.84 LAND ACQUISITION 3,162.50 DEVELOPER ENGINEERING 3,581.71 CITY EXPENSES (5%) (l2-6aOl(d)) 13,878.09 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 5,551.24 TOTAL: $303,735.37 14 Petition No. 4326 Magnolia Commons Addition to the City of Salina Water Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.25 LS 72,000.00 18,000.00 3 Clearing and grubbing 0.25 LS 50,000.00 12,500.00 33 Water Pipeline, 12" 9431 LF 40.00 377,240.00 34 Water Pipeline, 12" HDPE 587 LF 29.00 17,023.00 35 Water Pipeline, 10" 1038 LF 23.00 23,874.00 36 Water Pipeline, 6" 102 LF 46.00 4,692.00 37 Water fittings 2.93 Ton 1,000.00 2,930.00 38 Fire hydrant & valve assembly 5 Ea 2,900.00 14,500.00 39 Resilient gate valve, 12" 8 Ea 1,300.00 10,400.00 40 Resilient gate valve, 10" 2 Ea 1,025.00 2,050.00 41 Tapping sleeve and valve, 1O"xI2" 1 Ea 2,700.00 2,700.00 42 Directional bore, 12" 557 LF 42.00 23,394.00 43 Bore & steel encasement, 24" 463 LF 260.00 120,380.00 44 Air release assembly 2 Ea 3,955.00 7,910.00 65 Special trench compaction 292 LF 6.00 1,752.00 Steel encasement pipe, 24" 110 LF 90.00 9,900.00 66 Temporary fertilizer, seed and mulch 2.675 Ac 1,400.00 3,745.00 67 Temporary slope barrier (silt fence) 1082.25 LF 1.00 1,082.25 68 Temporary ditch check (silt fence) 16.50 LF 1.00 16.50 69 Temporary inlet sediment barrier (gravel bags) 350.00 Lb 0.60 210.00 70 Temporary construction entrance 15.00 Ton 22.00 330.00 71 Construction staking 0.25 LS 20,000.00 5,000.00 72 Traffic control 0.25 LS 14,000.00 3,500.00 CO No.1 (additional boring pit excavation) 1 LS 3,674.00 3,674.00 CO No.5 (seeding & erosion control items) 0.250 LS 9,256.25 2,314.06 SUB-TOTAL: $669,116.81 LAND ACQUISITION 9,487.50 DEVELOPER ENGINEERING 10,745.12 CITY EXPENSES (5%) (12-6aOl(d» 33,455.84 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 13,382.34 TOTAL: $736,187.61 15 Petition No. 4326 Magnolia Commons Addition to the City of Salina Sanitary Sewer Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.25 LS 72,000.00 18,000.00 3 Clearing and grubbing 0.25 LS 50,000.00 12,500.00 45 Sanitary sewer pipeline, 15" 377 LF 117.00 44,109.00 46 Sanitary sewer pipeline, 12" 2,225 LF 71.00 157,975.00 47 Sanitary sewer pipeline, 8" 3,535 LF 20.00 70,700.00 48 Connect to existing manhole 1 Ea 1,600.00 1,600.00 49 Connect to existing system 2 Ea 1,000.00 2,000.00 50 4' Standard Sanitary Manhole Type I 17 Ea 3,750.00 63,750.00 51 Extra depth manhole 175 LF 240.00 42,000.00 52 Trench & Backfill, 8'-10' 583 LF 7.00 4,081.00 53 Trench & Backfill, 10'-12' 984 LF 9.00 8,856.00 54 Trench & Backfill, 12'-14' 569 LF 10.75 6,116.75 55 Trench & Backfill, 14'-16' 564 LF 12.50 7,050.00 56 Trench & Backfill, 16'-18' 717 LF 14.00 10,038.00 57 Trench & Backfill, 18'-20' 800 LF 16.00 12,800.00 58 Trench & Backfill, 20'-22' 473 LF 17.50 8,277.50 59 Trench & Backfill, 22'-24' 554 LF 19.00 10,526.00 60 Trench & Backfill, 24'-26' 615 LF 21.00 12,915.00 61 Trench & Backfill, 26'-28' 278 LF 23.00 6,394.00 62 Plug & abandonment of observation wells 2 Ea 200.00 400.00 63 Sanitary sewer lift station 1 LS 302,000.00 302,000.00 64 Abandonment of existing lift station 1 LS 11,000.00 11,000.00 65 Special trench compaction 761 LF 6.00 4,566.00 66 Temporary fertilizer, seed and mulch 2.675 Ac 1,400.00 3,745.00 67 Temporary slope barrier (silt fence) 1,082.25 LF 1.00 1,082.25 68 Temporary ditch check (silt fence) 16.50 LF 1.00 16.50 69 Temporary inlet sediment barrier (gravel bags) 350.00 Lb 0.60 210.00 70 Temporary construction entrance 15.00 Ton 22.00 330.00 71 Construction staking 0.250 LS 20,000.00 5,000.00 72 Traffic control 0.250 LS 14,000.00 3,500.00 CO No.5 (seeding & erosion control items) 0.250 LS 9,256.25 2,314.06 SUB-TOTAL: $833,852.06 LAND ACQUISITION 9,487.50 DEVELOPER ENGINEERING 10,745.12 CITY EXPENSES (5%) (12-6aOl(d» 41,692.60 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 16,677.04 TOTAL: $912,454.32 16 Petition No. 4326 Magnolia Commons Addition to the City of Salina Sanitary Sewer Improvements East of Dry Creek Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.083 LS 72,000.00 6,000.00 3 Clearing and grubbing 0.083 LS 50,000.00 4,166.67 45 Sanitary sewer pipeline, 15" 0 LF 117.00 0.00 46 Sanitary sewer pipeline, 12" 2,225 LF 71.00 157,975.00 47 Sanitary sewer pipeline, 8" 3,110 LF 20.00 62,200.00 48 Connect to existing manhole 1 Ea 1,600.00 1,600.00 49 Connect to existing system 2 Ea 1,000.00 2,000.00 50 4' Standard Sanitary Manhole Type I 15 Ea 3,750.00 56,250.00 51 Extra depth manhole 143 LF 240.00 34,320.00 52 Trench & Backfill, 8'-10' 583 LF 7.00 4,081.00 53 Trench & Backfill, 10'-12' 939 LF 9.00 8,451.00 54 Trench & Backfill, 12'-14' 569 LF 10.75 6,116.75 55 Trench & Backfill, 14'-16' 564 LF 12.50 7,050.00 56 Trench & Backfill, 16'-18' 717 LF 14.00 10,038.00 57 Trench & Backfill, 18'-20' 420 LF 16.00 6,720.00 58 Trench & Backfill, 20'-22' 473 LF 17.50 8,277.50 59 Trench & Backfill, 22'-24' 554 LF 19.00 10,526.00 60 Trench & Backfill, 24'-26' 259 LF 21.00 5,439.00 61 Trench & Backfill, 26'-28' 278 LF 23.00 6,394.00 62 Plug & abandonment of observation wells 2 Ea 200.00 400.00 63 Sanitary sewer lift station LS 111,740.00 111,740.00 64 Abandonment of existing lift station 0 LS 11,000.00 0.00 65 Special trench compaction 761 LF 6.00 4,566.00 66 Temporary fertilizer, seed and mulch 0.892 Ac 1,400.00 1,248.33 67 Temporary slope barrier (silt fence) 360.750 LF 1.00 360.75 68 Temporary ditch check (silt fence) 5.500 LF 1.00 5.50 69 Temporary inlet sediment barrier (gravel bags) 116.667 Lb 0.60 70.00 70 Temporary construction entrance 5.000 Ton 22.00 110.00 71 Construction staking 0.083 LS 20,000.00 1,666.67 72 Traffic control 0.083 LS 14,000.00 1,166.67 CO No.5 (seeding & erosion control items) 0.083 LS 9,256.25 771.35 SUB-TOTAL: $519,710.19 LAND ACQUISITION 3,162.50 DEVELOPER ENGINEERING 3,581.71 CITY EXPENSES (5%) (12-6aOl(d» 25,985.51 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 10,394.20 TOTAL: $562,834.11 17 Petition No. 4326 Magnolia Commons Addition to the City of Salina Sanitary Sewer Improvements West of Dry Creek Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.083 LS 72,000.00 6,000.00 3 Clearing and grubbing 0.083 LS 50,000.00 4,166.67 45 Sanitary sewer pipeline, 15" 377 LF 117.00 44,109.00 46 Sanitary sewer pipeline, 12" 0 LF 71.00 0.00 47 Sanitary sewer pipeline, 8" 0 LF 20.00 0.00 48 Connect to existing manhole 0 Ea 1,600.00 0.00 49 Connect to existing system 0 Ea 1,000.00 0.00 50 4' Standard Sanitary Manhole Type I 0 Ea 3,750.00 0.00 51 Extra depth manhole 0 LF 240.00 0.00 52 Trench & Backfill, 8'-10' 0 LF 7.00 0.00 53 Trench & Backfill, 10'-12' 0 LF 9.00 0.00 54 Trench & Backfill, 12'-14' 0 LF 10.75 0.00 55 Trench & Backfill, 14'-16' 0 LF 12.50 0.00 56 Trench & Backfill, 16'-18' 0 LF 14.00 0.00 57 Trench & Backfill, 18'-20' 0 LF 16.00 0.00 58 Trench & Backfill, 20'-22' 0 LF 17.50 0.00 59 Trench & Backfill, 22'-24' 0 LF 19.00 0.00 60 Trench & Backfill, 24'-26' 356 LF 21.00 7,476.00 61 Trench & Backfill, 26'-28' 0 LF 23.00 O.DO 62 Plug & abandonment of observation wells 0 Ea 200.00 0.00 63 Sanitary sewer lift station LS 105,700.00 105,700.00 64 Abandonment of existing lift station 0 LS 11,000.00 0.00 65 Special trenchcompaction 0 LF 6.00 0.00 66 Temporary fertilizer, seed and mulch 0.892 Ac 1,400.00 1,248.33 67 Temporary slope barrier (silt fence) 360.750 LF 1.00 360.75 68 Temporary ditch check (silt fence) 5.500 LF 1.00 5.50 69 Temporary inlet sediment barrier (gravel bags) 116.667 Lb 0.60 70.00 70 Temporary construction entrance 5.000 Ton 22.00 110.00 71 Construction staking 0.083 LS 20,000.00 1,666.67 72 Traffic control 0.083 LS 14,000.00 1,166.67 CO No.5 (seeding & erosion control items) 0.083 LS 9,256.25 771.35 SUB-TOTAL: $172,850.94 LAND ACQUISITION 3,162.50 DEVELOPER ENGINEERING 3,581.71 CITY EXPENSES (5%) (12-6a01(d)) 8,642.55 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 3,457.02 TOTAL: $191,694.71 18 Petition No. 4326 Magnolia Commons Addition to the City of Salina Sanitary Sewer Improvements City at Large Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 0.083 LS 72,000.00 6,000.00 3 Clearing and grubbing 0.083 LS 50,000.00 4,166.67 45 Sanitary sewer pipeline, 15" 0 LF 117.00 0.00 46 Sanitary seWer pipeline, 12" 0 LF 71.00 0.00 47 Sanitary sewer pipeline, 8" 425 LF 20.00 8,500.00 48 Connect to existing manhole 0 Ea 1,600.00 0.00 49 Connect to existing system 0 Ea 1,000.00 0.00 50 4' Standard Sanitary Manhole Type I 2 Ea 3,750.00 7,500.00 51 Extra depth manhole 32 LF 240.00 7,680.00 52 Trench & Backfill, 8'-10' 0 LF 7.00 0.00 53 Trench & Backfill, 10'-12' 45 LF 9.00 405.00 54 Trench & Backfill, 12'-14' 0 LF 10.75 0.00 55 Trench & Backfill, 14'-16' 0 LF 12.50 0:00 56 Trench & Backfill, 16'-18' 0 LF 14.00 0.00 57 Trench & Backfill, 18'-20' 380 LF 16.00 6,080.00 58 Trench & Backfill, 20'-22' 0 LF 17.50 0.00 59 Trench & Backfill, 22'-24' 0 LF 19.00 0.00 60 Trench & Backfill, 24'-26' 0 LF 21.00 0.00 61 Trench & Backfill, 26'-28' 0 LF 23.00 0.00 62 Plug & abandonment of observation wells 0 Ea 200.00 0.00 63 Sanitary sewer lift station LS 84,560.00 84,560.00 64 Abandonment of existing lift station 1 LS 11,000.00 11,000.00 65 Special trench compaction 0 LF 6.00 0.00 66 Temporary fertilizer, seed and mulch 0.892 Ac 1,400.00 1,248.33 67 Temporary slope barrier (silt fence) 360.750 LF 1.00 360.75 68 Temporary ditch check (silt fence) 5.500 LF 1.00 5.50 69 Temporary inlet sediment barrier (gravel bags) 116.667 Lb 0.60 70.00 70 Temporary construction entrance 5.000 Ton 22.00 110.00 71 Construction staking 0.083 LS 20,000.00 1,666.67 72 Traffic control 0.083 LS 14,000.00 1,166.67 CO No.5 (seeding & erosion control items) 0.083 LS 9,256.25 771.35 SUB-TOTAL: $141,290.94 LAND ACQUISITION 3,162.50 DEVELOPER ENGINEERING 3,581.71 CITY EXPENSES (5%) (12-6aOl(d)) 7,064.55 TEMP NOTE, INTEREST, BONDING & ISSUE (2%) 2,825.82 TOTAL: $157,925.51 19 Petition No. 4326 Magnolia Commons Addition to the City of Salina Property Ownership p arce IN0 , p roper t y De scn'p1l'lo n p roper t y 0 wner 1 Lot 1, Block 1, in the Magnolia Commons Addition Magnolia Development Partners, LLC 2 Lot 4, Block 1, in the Magnolia Commons Addition Menard Inc. 3 Lot 3, Block 1, in the Magnolia Commons Addition Magnolia Development Partners, LLC An unplatted tract of land located in the South half of the Southeast Quarter of Section 26, Township 14 South, Range 3 West of the Sixth Principal 10 Meridian in Saline County, Kansas Wallerius 11 Lot 1, Block 1, in the Premier Addition Premier Properties 4 Unplatted tract ComCo of Kansas, Inc. Sa Unplatted tract ComCo of Kansas, Inc. Sb Unplatted tract ComCo of Kansas, Inc. Unplatted tract 6 ComCo of Kansas, Inc. Unplatted tract 7 Brown Trust Unplatted tract 8 Brown Trust Unplatted tract 9 KejrTrust 20 Parcel No Owner 1 Magnolia Development Partners 2 Menard Inc. 3 Magnolia Development Partnel S 4 Com Co of Kansas 1 5a Com Co of Kansas I 5b Com Co of Kdnsas 1 6 Com Co of Kansas 1 7 Brown Trustl 8, Brown Trust! 9 Ke'rTrustl 10 Wallerius' 11 Premier PIOpertles 12 Stol'mwatel DetentIOn) Total Area City of Salma Totals I Subject to KSA. 12-6a19 'Agncultural deferral Area, Acres Water 12.72 28,794.16 16.44 37,215.09 3.47 7,855.01 28795 65,183.00 25666 58,099.91 9.3725 21,216.45 108634 245,913.88 13.182 29,83998 50.966 115,371.31 4087 92,51708 10.79 24,425.23 4.31 9,756'.51 NA N 325.2155 N $736,187.61 Petition No. 4326 Magnolia Commons Addition to the City of Salina Distribution of Assessment Cost Distribution Magnolia Commons Infrastructure Improvements Samtary Sewer 4 Streets City at Large Edst of Dry West of Dry MagnoliaRd VIrginia Dr Creek Creek N 43,228.14 N 29,515.29 76,078.56 N 55,87033 N 38,147.12 98,327.95 N 11,792.58 N 8,051.73 20,754.14 N 97,858.04 N N N N 87,22432 N 59,554.98 153,50883 N 31,851.87 N N N N N 130,47972 N N N 44,798.22 N N N N N 61,214.99 N N N 138,89419 N N N N 36,669.15 N N N N 14,647.27 N 10,000.8e 25,778.19 N N N N N 157,925.51 N N N N $157,92551 $562,834.11 $191,694.71 $145,269.98 $374,44766 3Lot 2, Block 1, MagnolIa COnmlOl1S AdditIOn is dedIcated as a Common Area/Dramage Easement on the plat and hence 110t a developable lot. Storm Total VirgimaCt Detention Virginia Dr VlrglOiaCt 85,170.50 118,403.74 42,42955 90,481.81 $514,101.74 110,078.86 153,031.24 54,838.19 116,943.47 664,45225 23,23441 32,30039 11,574.73 24,683.32 140,24631 N N N N 163,041.04 N N N N 358,388.04 N N N N 53,06832 N N N N 376,39360 N N N N 74,638.20 N N N N 176,586.30 N N N N 231,411 26 N N N N 61,09439 N N N N 60,182.83 N N N N 2,873,604.27 N N N N 157,92551 $218,483.76 $303,735.37 $108,842.47 $232,10861 $3,031,529.78 4 Based upon estimated capaCIty and loadmg of the proposed samtary sewel lIft station. total cost was allocated 37% to propeltleS east of Dry Cleek. 35% to properties west of DIY Creek, and 28% to the City at large. Witllln each sub allocation, costs were assessed on a per aCle basis. 21 Pu'blisher's Affidavit .r... ,--~C..LhLl.r. i.s.!.. l.ty1-lF...I.j.LIn.l,'!,k_ ___-,_ being duly sworn declare that I am a I.egal Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for fivE' consecutive years prior to first publication of attached notice, and that the Project No. 08-2733 Notice has been correctly published in the entire issue 'of said newspaper one time, publication being given in the issue of April 5, 2012 lr" -'" \\ '-' "t--J' I, -.:b 'J b~'lu :\ v .............. \", \ Subscribed and sworn to before me, this 5'+1'\ Printer'S Fee $1,732.50 ~QTAR't' PUIlLlG • State oj Kansas ~ ~u WENDY CH!~~~l'2..\ ~ MV I\ppt. Exp. z:.: (Published in the Salina Joumal April 5, 20121 NOTICE OF HEARING ONPROPOSEP . ASSESSMENTS FOR PUBLIC IMPROVE-. MENTS TO ALL PERSONS CONCERNED The Board of Commis, sloners of the City of Sa· Iina, Kansas, will meet in the City Commission Meeting Room 107, City·County Building, 300 West Ash Street, Salina, -Kansas, on Monday, the 23m day of Aprii, 2012, at '4:00 p.m .. Central Time to .conslder the proposed assessments for the' public Improvements listed below. Written or oral objec'tions will be conslderea at the meeting and there· upon the amount of the . assessment.wlll be finally determined. The pro-_ posed assessment rolls are on file for public in·' spectlon in the Office of the City Clerk, Room 206, City-County Building, 300 West Ash Street, Salina, Kansas, ) PROJECT NO. 08-2733 MAGNOLIA COMMONS ADDITION STREET, DRAINAGE & UTILITY · IMPROVEMENTS The curb, guttering, pay. ing, grading and drain· age for approximately I ;SOO lineal feet of V,r· gonia Drive; 920 lineal feel of Virginia Court; and 625 hneal feet 01 Magnolia Road. The installation of approXimately 10,073 lineal feet of: twelve-inch water main, 965 lineal leet of ten-inch water main, 80 lineal feet 01 six-inch water main, fire hydrants, valves, fit· tings, and all appurte· nances thereto. The installation of ap. proxlmalely 356 lineal feet of fifteen-inch sanitary sewer main, 2,207 linealleet of. twetve-lnch sanitary sewer main, 3,528 lineai feet of. eight-Inch. sanitary sewer main, manholes, wastewater lift station, and' all appurtenances thereto. , The installation of stormwater detention, stormwater rump sta tlon and ai appurte· nances thereto. The installation 01 ap: proximately 2,136 lin~al feet of storm sewer, In· 'iets, and atl appurte· nances thereto. The above improvements' ware authorized by Resolution No. 10-673 t passed ~ Ihe Board of Commis, oners on April 26, 2010. , e lotai cOSI of such im-• rovement . is 3.031,529.78 and $1,440,077.52 -is pro· posed to be assessed 10 lhe properties within the improvement dlstricL The extent of boundaries of the Improvement district to be assessed Is de· . scribed as follows: :. Lot 1,3. and 4j Block I, , in the Magno ia Com· · mons Addition Lot 1, Block 1, in the Premier Addition. An unplatted tract of : land located 10 the South hall of the Southeast Quarter of Section .' 26, TownShip 14 South, Range :3 West 01 the , . Sixtll Principal Meridian ,!. in Sahne County, Kan· sas, more particularly described as tallows: Commencing at the · Southwest corner of the ~,Southeast 114 01 said .: Section 26; . ~ thence North along the "I' West line of said South;.1. east 114 on an assumed ::: bearing 01 North T" 00°09'15" East, a dis· ............. ~ ... ..... n,::.,,.; 'a.e.+ + ... lows: Commencing at the Northwest Comer of said Norttieast Quarter; Thence on an assumed bearing of SOllth 00°05'09" East on the West Ifne of said Northeast Quarter, a distance of 1696.31 feet 10 the Southwest corner 01 a parcel recorded tn Sa· line County Register of Deeds, Book: 1168, Page: 1808, said jXlint beong the ,POINT. OF, BEGINNING' . ;'.' .... Thence Nortn 89°52'43:' East on the South line of said recotdad parcei, a. distance of 1355.10 feet to the West Rlght-ol·Way line of l-f35; Thenca on said Right-of Way line on a curve to m~s ~~~~7~~6~nPee~, ~~ ,arc length of-552.'4 feet, a chord bearing of South 02°36'23"' East, a chord distance of 551.91 leet; .' Thence South oo't3'42" West continuing on said West Righl·of·Way fine, . a distance of 363.60 feet to a point 20.00 leet North of the South lina of said Northeast Quarter; .. Thence North 89°55'21" West on a line parallel to and 20.00 feet north ot said South line, a diStance of 1377.39 feet to said West line; . Thence North 00°05'09" West on said West Ime, a distance 01 910.25 feet to the POINT OF BEGINNING. Said Iract contains 1,254,306.80 square leet,.26.795 acres, more or iess. Parcel Sa (LOCATED OUTSIDE-THE' CITY LIMiTS, BUT 01 RECTL Y ADJACENT TO THE CITY BOUNDARY) . A tract of land located in the Northwest Quarter 01 Section 35, Township 14,South, Range 3 West of the 6th Principal Meridian, SaUne County, Kansas, more partlcu' larly described as lol· lows: Commencing " at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of Soufh 89'54'47" East on the' North line of said Northwest Quarter, a distance of 1585.99 feet; line County Register 01 Oeeds Book: 1209, page: 477; Thence North 00"33'09" West, a distance 01 347.96 feet to the Northeast corner of a parcel recorded in Satine County Register of Deed Book: 1209, page: 477; Thence on said Soulh : ,Righl-of·Way line on a • curve to the Right, hav· . ing a radius of 28707 .87 feet, an arc iength 01 522.05 leet, a chord beaiing . of' South 89°54'23" West, and a chord distance of 552.04 feel, to the POINT OF BEGiNNING. Said tract contains 1,118,002.76 square feet, 25.666 acres, more or less. Parcel 5b (LOCATED OUTSIDE THE CITY LIMnS, BUT 01 RECTl Y ADJACENT TO THE CITY BOUND· ARY) A tract 01 land located in the Northwest Quarter of Section 35, :rownship 14 South, Range 3 West of the 6th PrinCipal Meridian, Saline County, Kansas, more partlcu, iarly described as 101· iows: Commencing at the Northeast Comer of said Nonhwest Qualler; Thence on an assumed bearing of South .00005'01l~ East on the East line 01 said Northwest Quarter, a distance of 1696.31 feet to tha POINT OF BEGINNING; Thence South 89'52'43" West, a distance of. . 519.42 feet to a point on the centerline of' Dry Creek; -" Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 32.97 feet; c ': , • Thence Soulh'11°37'01" East on Ihe cenierllne of Dry Creek, a distance of 144.21 feet; , Thence South 04"29'24" . East on the centerline of ' Dry Creek, a distance of , 90.73 feet: Thence South 05'30'33" East on the -centerline of '.Dry Creek, a distance of 140.25 leet; , Thence South 08°46'47" East on the centerline of Ory Creek. a distance. 01 145.30 feet; Thence South 14°07'13" East on the centei1lne of Dry Creek, a distance of 99.03 feet; Th'ence South 00°27'27" West, a distance ot 71.18 leet 10 a pain! on • the South Rlght-of·Way hne recorded in the Salille, County Register 01 Deeds Misc. book: 96, pg: 82; said poml being the POINT OF BEGIN· NING; Thence Soutti 00"27"27" West on said South Right-at-Way line. a dis· tance of 29.65 feet to a point on the centerline 01 Dry Creek: Thence South 196 24'04" East on the cenlerline 01 01)' Creek, a distance of 159.13 feet; Thence South 14'12'44" East on the centerline of ,Dry Creek, a distence of -62.06 leet: '. Thence South 07'45'11" East on the centerline of Dry Creek, a distance of 56.70 leet 10 the South line of said Northwest . Thence South 81°08'09" East on the centerline 01 Dry Creek, a distance of 23.01 feet;· .' Thence Souih 52"23'12" East on the centerline of Dry Creek, a distance 01 219.861eel; Thence South 27°22'56" East on the centetfine of . Ory Creek, a distance of 164.03 leel; .. Thence South 21"34'53" East on the centerline elf . .i)ry Creek, a distance of 26.28 feet; Thence South 15'37'44" West on the centerline of DrY Creek, a distance of 67,04 feet; . Thence South 02°58'02" West on the c!1Oterline of Dry Creek, a distance ,.,f"l7 r.II~fQQt· Quarter; . Thence South 89°59'23" East, a distance -of 336.87 leet to the. Souttieast comer of said . ,Northwest Quarter, Thence North 00°05'09" West on the East line of said Northwest Quarter. a -distance of 930.07 leet to the POINT OF BEGINNING. . SaId tract contains 408;268.12 square feet, 9.3725 acres, more or less. Percel 6. (LOCATED OUTSIDE '!1-4E' CITY LIMITS, BUT D.t RECTLY ADJACENT TO THE CITY BOUNDARY) • A tract 01 land focated in ths Northwest Quarter ,of Seclion,35, Township 14 South, Range 3 West ,_ ",f .... ~ .c=::th Prin ... lnal ."0-. -It.,).v~ t • ..t""".,u $1,440,077.52 is pro· posed to be assesseCI to :the properties within the improvement district. The extent 01 boundaries 01 the improvement clistrict to be assessed Is de· • scribed as fonows: ':. Lot t, 3, and 4\ Block 1, • in the Magno la Com· '. mons Addition Lot 1, Block 1; in the . Premier Addition. '. An unplatted tract of . • land located In the South hall of the South-· aasr Quarter of 'Section .' 26, Township t4 South, Range 3 West of the .. Sixtli Principal Meridian ,t In Saline County, Kan· sas, more particularly described as follows: Commencing at the Southwest comer of the f;', Southeast 1/4 of said ':; Section 26; : ~'thence North aiong the· Y WeSl line of said South: ... east 1/4 on an assumed ~;: bearing of' North 7·' 00'09'15" East, a dis· ~: lance' of 96.25 feet to !>,'.the POINT OF BEGIN-~: NING: . . LJt:::t:tuo ..,'11:", .. _ uvvn, 0';""" pg: 82, said point being the Po.lNT OF BEGIN· NtNG: . Thence South 00"27'2r West on' said South Rlght-of·Way line, a dis· tance 01 29.65 feet to a point on the centerline of Dry Cr,*!k: Thence South 8 , "OS'09" East on the centerline of Dry Creek, a distance of 23.01 feet: . Thence South 52°23'12" East on the centerline of Dry Creek, a dlsiance 01 219.86 feet; Thence South 27'22'56-East on the centerline 01 Dry Creek, a dIstance of 164.03leel; . Thence South 21"34'53" East on the centerline of U!y Creek, a dlstaf!(:s 01 26.28 feet; Thence South 15·37'44" West on the centerline of DrY Creek, a distance . of 67.04 leet; . Thence South 02°58'02"' West on the centerline of Dry Creek, a distance 0137.35 teat; Thence South 46°59'34" West on the centerlIne 01 Dry Creek, a distance of 65.26 leet; ;t ·thence North 69"36'00". '!:' East, a distance of .~ 22.40 feet · thence North 66"25'36" East, a .distance of 38.07 feel;.. . Ihence North 61"21'24" East, a distance of . Thence Sol.lth 35·17'41" West on the centertlne . 01 Dry Creek, a dlstance_ of 89.38 leet; . " 489.67Ieet; • thence North 09'41'31-p.~est, a distance' of ;, .. 567.93 feet;' • • thence North 20°27'30" West, a distance of '" 196.30 leet: . thence North 35"49'23" West, a distance of 242.34 feel; thence North 52·55'59-. · East, a distance 01 25.00 feet to a point on the westerly right-ot-way of 1-135 highway; -thence northwesterly' along said AIW on a non-tangent curve to the left haVing a radius of " r:J;e5~:e~~~.~gr~~~t , . said curve having a long chord of 223,n feet ana a bearing' of North 38·12'31"Wesl; .. thence South 89"57'15-West, a distance. of 112.891eet to a polnt on "the West line· 01 the i". Southeast 1/4 of saId · .Secllon26; , thence South 00"09'15" · West along said West tine, a distance of 1221.88 feet back to Ihe Po.lNT o.F BEGINNING. The above described . tract of land contains 469,826 square feet or. 10.79 acres, mora or less. . Pursuant to the "rovlslons of K.S.A. 12-6819, there is additional property that benelils or will Denellt from the Imj:1rovements, but is noj Included within the Improvement Dlstricl because Ihe property is currently outside the City limits. The Cily inlends to charge benefit fees in the manner set lorth In K.S.A. 12·6a19 for any owner of property within the tracts of legally described as 101-lows: Parcel 4 (LOCATED OUTSIDE tHE CITY LIMITS, BUT 01 'RECTLY ADJACENT TO. THE CITY BOUND· · 'ARYl A tract 01 land located in the Northeast Quarter 01 · Section 35, Township 14 South, Range 3 West· " of the 6th Principal Me· · ridian, SalinE) County, l.,' Kansas, more particu. , • larl.y, _ described as fol· Thence South 43"37'21-West on Ihe centerline 01 Dry Creek, a distance of 131.83 feet: . Thence Sol.lth 14°34'39" . Wesl on the centerline 01 Dry Creek, a distance. o! 64.18 feet; Thence South 01·18'17" West on the centerline of'Dry Creek, a distance of 28.31 feet; . . Thence South 27'52'23" East on tha centerline 01 Dry Creek, a distance 01 26.19Ieel; Thence South 51°13'46" East on the centerline 01 Dry Creek. a dlstanca of 7S.~feet; Thence South 41°06'48" East on the centerline 01 Dry Creek, a distance 01 79.39 leet: . Thence South 33°41'20" East on the centerline 01 0Iv' Creek, a distance of . 109.28 feet; Thence South 34°16'28" East on the centerline of . Dry Creek, a dislance 01 . 108.69 leet; Thence South 30°10'59" East on the centerline of Dry Creek, a distance 01 106.40Ieet; Thence South'39"43'39" East on the centerline of Dry Creek, a distance of 75.83 feel; -Thence South 26"02'09" East on the centerline of 011' Creek, a distance 01 245.31 leet: Thence South 15°16'03" East on the centerline 01 Dry Creek. a distance of 127.141eol; Thence South 12·52'13" East on the centerline of Ory Creek, a distance of 82.84leel; Thence North 89"52'43' East, a distance 01 509.42 leet to a point that is 10.00 leet West, measured perpendicu. Iar, of the East fine of said Northwest Quarter; Thence North 00"05'09" West parallel to said East line, a distance of 1278.92 feet to a point on the South line of' a parcel recorded In Sa· line County Re9ister of ~~s. Book: 379, Page: Thimce North 89·54'29'" West, a distance 01 513.61 feet to. the Southwest corner 01' a parcet recorded in Sa· ..... J ........... ' ............ 01_ .......... ' I 82.06 lee\;' Thence South 07"45'11" East on the centelline of Dry Creek, a distance of 56.70 feet 10 the South line of said Northwest Quarter: . Thence South 89"59'23" East, a distance' 01 336.87 feet to the. Southeast comer 01 said . . Northwest Quarter, Thence North 0000S'09" West on the East line of said Northwest Quarter, a -distance of 930.07 leet to the POINT OF BEGINNING .. Said tracl contains 4OB;268.12 square leet, . 9.3725 acres, more or less. Parcel G. (LOCATED . OUTSIDE THE' CITY LIMITS, BUT 01 RECTL Y ADJACENT TO THE CITY SOUNDARYl' A trael of land located in the Northwesl Quarter , of Section 35, Township 14 South, Range 3 West , of Ihe 6th Principal Meridian, Saline County, Kansas, more partlcu· larly deSCribed as 101· lows: 'Commenclng at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of South -89·54 '47" East on the North fine of said Northwest Ouarter, a distance . of 130.181eel; Thence South 00·20'W East on the East Rail· road Rlghl-ol-way line, a distance of 43.23 leet to a pOlO\. on the 'South Right-ol-Way line" reo corded' in the Saline. County Register of' Deeds Misc. book; 96, pg: 82, said point .belng . the POINT OF BEGINNtNG; .. -Thence South 68°41'33" East ·on said South Rlght-ol-Way line, a dis· tance of 214.37Ieet; Thence North 01°t6'27" East on said South Right-ol·Way line, a distance of 17.00 feet; Thence South 88"41'33" East. on said South Right-ol·Way nne, a distance of 50.00 leet; . Thence South 01"16'2r . West on said South Righl-ol·Way line. a distance 01 17.00 feet . Thence South 87"28'33" East on said South Right-of·Way line, a distance 01 4 ?fr. 1 0 feet; Thence SQuth 89"55'33" East on said South' J!i~~-~~·fJ1.1Ireree~ g:S;; Permanent· Easement line recorded In the Saline County Reglster 01 Deeds Misc. book: 96, ~~~~~ South 59°58'41 . East on said Easement -line, a distance of 171.fr5 leet; Thence on a curve to the left, hevl(19 a radius 0128797.87 feet, an arc '. length of 200.80 feet, e chord bearing of South 66°4S'46" Eest, a chord distance 01200.80 feet Thence North 00·59'27" East continuing on said fa~~~'~9.I!;6ele~ {{;S~ point on said South Right-of-Way line, Thence South 89"55'33" ; East on said South Right-of-Way line, a distance of 47.02 feet; Thence continuing on said South Rlght-of"Way tine on a curve 10 the Left, having a radiUS 01 28707.87 leet, an arc length of 185.40 feet,)a · chord bearing of Soulh more or Jess. 01 the South line of the Parcal 9 (LOCATED 89'17'33" East, a chord North· Half of said OUTSIDE THE CITY dislanceoflB5.40feet; Southwest Quarter; LIMITS, BUT DI Thence South OO'31'27h" wTheesntceonNOarthlln8e9'th54a't56I's" AECTLY ADJACENT West on said Sout TO THE CITY BOUND. Right-ol-Way hne, a dis-59.00 leet North 01 !>aid ARYl lance 01 30.00 feel; South line, a distance 01 That part 01 'the North · Thence conlinuing on 505.20 feet to the cen· Hall (N 1/2 ) 01 the said South Right·ol-Way terflne of DIY Cree~; Southeast· Quarter (SE' line on a curve to the Thence North 45'29'12" 1/4\ of Section left. having a radius of East 011 the centerline of Thirty.five (35), Town. 28737.87 feet, an arc Dry Creek, a distance of ship Fourteen (141 length of 30.10 feet. a 19.48 feet; South, Range Three (3 chord beanng of Soutn Thence North 16'52'13" West 01 the 6th P.M.,Iy-89'30'33" Easl. a chord East 011 the centerline of ing West of 1.35 H'gh. distance 30.10 feet; D!y Creek. a distance of way. less a 1.85 acre Thence North 00'27'27" 58.65 leet; tracl described as tol. East on said ,Thence North 20°49'15" I Begin Inn al the Right-of-Way line. a dis· East on the centerfme of ~~~ihwesl ~orner of lance of 0.35 leel to the D!)I Creek, a distance of said N 112 of the SE 1(4; centerline of Dry Creek; 66.70 feet; thence Northerly along Thence South 81 "OS'09" Thence North 01'28'45" Ihe West line of said N, East on the centerline of West on the centerline 112 of the SE 114 to a Dry Creek. a distance of 01 Dry Creek. a distance point 1379 feet North of 23,01 feet; of 85.97 feet; the Southwesl comer of Thence South 52°23'12" Thence North 09'51'52" the SE 114 of Section East on Ihe centerline of West on the. centerline 35; thence EaSlerly par. Dry Creek. a distance of 01 Dry Creek. a distance. allet to the South line of 219.86 feet: . of 138.24 feet; . saidSE 1/4 toa pointorl Thence South 27'22'56" Thence North 07'07'28" h t rIy right-of w~ Easton the centerline 01 West on the centerline :in~ w~~~ (now 1-;35) Dry Creek. a distance 01 of Dry Creek, a distance Highway, said point be-, 164.03Ieet; of 208.97 feet; . InQ 1267.26 feel West ofl Thence South 21'34'53" Thence North 14'11'36" the East line of said SEI East on the centerline 01 Wesl on the centerline 1/4, thence wi!h an an-i , Dry Creek, a distance of 01 Dry Creek. a distance gle of 90'02'45" 10 tt)e i 26281eel' of 133.01 'eel; right along said ........ ' ance So' uth 15°37'. A...A "..."...e nce N0 r th 03·". ..7 ·.16 " right-ol-way line to Ihe · Wesl on Ihe centerline West on Ihe centerline South line of said N 112 01 Dry Creek, a dIStance of D!y Creek. a distance 01 !he SE 114; thence 0167.04 feet;. 0161.41IeeC· Westerly along said, Thence South 02°58'02" Thence North 16'07'53" South line of said N 112 Wellt on Ihe centerHne East on the centerline of of the SE 1/4. to the of Dry Creek, a distance Dry Cre~. a <!islance of point of beginning;' ' 0137.35 leet; . 66.66 feet; The South Twenty (20)' · Thence South 46'59'34" Thence North 38°43'53" f t f the Northeast · West on the centerline East on the centerline of &~art~r (NE 114 ) of 01 DIY Creek, a distance Dry Creek, a distance of Section Thirty-five (351. 0165.26Ieet; ,. l00.64leet; , . Township Fourteen (14) , Thence South 35°1741 Thence North 26°05'19" South Range Three (3): , West on the centerlIne East on the centerline of, West 'of the 6th P.M.,; 01 Dry Creek, a distance Dry Creek, a dis~ of SaRne County, Kansas, of 89 38 feet. . 99.20 feel;.. lying west 01 the Thence Souih 43°37'21" Thel'lce North 32°31'29" righl-ol-way 01 Interstale ' West on~the centerline Easlon Ihe ce~terlJne 01 1-135. of Dry Creek, a distance Dry Creek, a distance 01 The above described 01131.831001; 125.251eel; . land contains 'ThanceSouth 14°34'39" Thence North 16'1.6'22" 1,760,310.41 square West on 'the centerline East on !he centerline of leet or 40.870 acres" 01 Dry Creek, a distance Dry Creek. a di~tance of more or tess. of 64.16 feet; "". 117.321001;. Thence Soulh 01·18',7" Thence North 07'42'42" • West'on·th·e centenine West on the centerline · of Dry Creek, a dist!l~e 01 Dry Creek, a distance of 26.31 leet; of 55.15 feet; , Thence Sotrth 27°52'23" ThenCe North 17'02'33"',' · East on the centerline of West on the centerlIne ' Dry Creek, a distance 01 of Dry Creek. a distance ; 26.19Ieet; 0142:95 leet; , , · Thence South 51°13'46" Thence North 07'45'1'" East on the centerline of Wesl on the centerline: Dry Creek. a distance of of DIY Creek. a distance. 75 4 f t. 01 0.18 lee I to tha Th:nceeesOuth 41'06'4S" POINT OF. BEGINNING .. East on lhe centerline Of Said tract contains' Dry Creek, a distance of 574,225.86 square fael: ~;~~uth'33';4;"20" j~;~82 acres) more or, Eastonthecenterlineof Parcel 8 (LOCATED Dry Creek, B distance of OUTSIDE THE' CITY ; '109.28 feet: ,. LIMITS. BUT. 01 , , Thence South 34°16'28" AECTL Y ADJACENT · East on \he centerline of TO THE CITY BOUNDDry Creek, a dIStance of ~'ir~ct of lan~ Iocaled '" . ~~';';,t~ 30010'59" . the Southwest Quarter · East on the centerline of 01 Section 35, Township · Dry Creek. a dIStance 01 14 South. Range 3 West . 1 DB 40 feet; 01 Ine 6th Principal Me-. Thence South 39'43'39" (idian, Saline Cou!lry. East on the centerline of Kansas, more .partICU· . , Dry Creek. a distance of larly described as fol· · 75.83 leet;. ." lows: ' Thence South 26"02 09 Beginning at the North-· East on the centerlIne 01 west corn e r 01 the Dry Creek. a distance of WheatridJlB Addition' to 245.31 feet; . Salina Kansas. Saline Thence South IS'IS·03". Coynty; Kansas; • East on the cenlerline 01 Thence on 'an assumed Dry Creek. a distanc~ of bearing of N orlh' 127 14 I el 00'20'00· West on Ihe ThenceT>o~uil2'52'13" Easl· Railroad East on the centerline of. Right-of-Way line, a' dis-Dry Creek. I! distance 01 tance 01'1019.03 feet to 115.82 feet; . the··North line of said' Thence South 11°37'07" Southwest Quarter' East ordhe centerline of Thence South 89°59'23" Dry Creek. a distance 01 East on said norlh lin~ 144.21 feet; . a distance of 2185.3u Thence South 04°29'24" feel to the centerline of East on the centerline of Dry Creek; . Dry Creek, a distan~e 01 Thence Soulh 07°45:11" T90h 793n c1: et· East on Ihe centerjine 01 South 05'30'33" Dry Creek, a distance of East on the centerline of· • O. f8 feet; Dry Creek, a dlslance of Thence South 17'02'33" 140 25leet East on the cenlerline of Thence sotth 06°46'47" ~.!Y~9~"!~~ a distance 01 ... __ • __ ..... ____ .. _-'1_-_. Lieu Ann Elsey City Clerk (tt) -Or>( I;reek,-Ifdlstance1lf-iinc'e-oHolii:o:3"ieot to-115.82 leet; the' North line 01 said Thence South 119 37'07" Southwest Quarter; East 011 the cenlerllne of Thence South 89·59'23" Dry Creel<, a distance of East on said north line, 144.21 feet; a distance of 2185.38 Thence South 04"29'24' feet to the centerline of East on the centerline of Dry Creek; . Dry Creek, a distance 01 Thence South 07"45:11" 90.73 leet; . East on the cente~tne 01 Thence South 05"30'33' Ory Creel<, a distance of East on the centerline 01 0,18 feet; Dry Creek, a distance of Thence South 17"02'33" 140,25 feet; East on the centerline at Thence South 08·46'47' Dry' Creek. a distance of East on the centerline 01 42.95 feet; . Dry Creek. a distance 01 Thence South 07"42'42" 145,30 feet; East on the centel1lne of I Mondav thru Sunrl;av···. II Thence South 149 07'13" Dry' Creek. a distance of East on the centerline 01 55.15Ieet, Or>( Creek, a distance at Thence South t6"16'22" 99.03 feet; West on the centerline Thence South 19"24'04" of Ory Creek, a distance East on the centerline of 01 87.32 teet; Or>( Creek, a distance of Thence South 32"31'29" 159.13Ieel; West on the centerline' Thence South 14°12'44" of Dry Creek, a distance East on the centerline of of 125.25 feet; Ory Creek, a distance 01 Thence South 28"OS'I9" 82.06 leet; West on the centerline :rhence South 07·45'11" of pry Creek, a distance East on the centerline 01 01 99.20 leet; \ . Or>( Creek, a distance of Thence South 38"43'53" 56..70 feet to the South West on the centerline : line 01 said Northwest of Dry Creek, a distance Ouarter; ot 100.64 feet; . Thence North 89"59'23" . Thence South 16"07'53" West on said South line. West on the centerline a distance of 2185.38 of O~ Creek, a distance foet to the East Railroad of 66.66 feet; Right-of-Way tine; , Thence South 03"27'16" Thence North 00"20'00"' East on the centerline of West on the East Rail: Ory Creek, a distance of road Right-of-Way line, 61.41 feet; a distance 01 2566.58 . Thence South 14"11'38" leet to the POINT OF East on the cenlerline of BEGINNING..' . Dry Creek, a distance of., Said' tract' conlains 133.01 feet, . . 4,732,112.18 square Thence South 07"07'28" feel (108.634 acres) East on the centerline. of more or. less. . .' Dry Creek, a distance 01 Parcel 7 (LOCATED 208.971eet; . OUTSIDE THE. CiTY Thence South DlrSl'52" LIMITS •. BUT 01 Eastonthecenlel1ineof RECTl Y ADJACENT Dry Creek, a distance 01' TO THE CITY BOUNO-138.24Ieet; . ARY). Thence South 01°20'45" A tract of land located in East on the centerline of the Soulhwest Quarter Ory Creek, a distance of Of Section 35, Township 85.97 feet; . 14 South, Range 3 West Thence South 20"49'15" of the 6th Principal Me· West on the canterline rldlan, Satine County, of Di)' Creek, a distance Kansas, I more partlcu· of 66.70 feet; lally described as fol· Thence South IS052'13" lows: .. . West on the centel1lne Commencing at the 01 Dry Creek, a distance Southwest Corner of . of 58.65 leet; . saki Southwest Quarter; Thence South 45"29'12" Thence on an assumed West on the centel1lna bearing of,. South of Dry Creek, B distance 89°50'27" Eastl a dis·' of 19.48 ,feat to a Une . lance 01 133.10 eet;.. 59.00 feet North of the Thence North 00·20'OO~ Souln line of the North West,. a, distance .of . HaH of said ,SouthweSI, .2647.31 feet to th~ Inter-' Quarter; ," .. ," section of the East Raft· , Thence ,North 89"54'56" road RI9ht-oi Way line \'Vest parallal 10 said' ~!1d the North line of Soillh line. a'distence of said Soulhwesl Quarter; 393.30 feet.lo the East ,Thence South 89"59'23' 'line of said Wheatridge East on sald North Une, Addition; ,.., a, distance of '2185.38 . Thence North 00"23'36" feet to the centerline of West on the East line of Ory Creek and the 'sald Whealrldge Addl· POINT OF BEGINNiNG; . tion, a' distance of 'Thence South 89"59'23" 243.96 feet to the North East on said North fine, line 01 said Whealridge a distance of 336.87 . Adddlon; . leet to Ihe Northeast' Thence North 89·51'19" comer of said South· West on the NImh IIna west Quarter; ," 01 saId Wheatrldge Ad-Thence South 00"05'01" dillon, a distance of East on the East line of 1618.00 feel to the said Southwest Ouartet, POINT OF BEGINNING. 'a distance of 1267.92 Said tract contains teet to a point on a'lIne 2,220,091.93 square fh!ifis.59.00 feet·North. feet 150.9.66 acres)' Department of Finance & Administration Office of City Clerk Lieu Ann Elsey, City Clerk 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 Salina TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 e-mail: lieuann.elsey@salina.org Website: www.salina-ks.gov I, Lieu Ann Elsey, hereby certify that the attached document is a sample of the hearing notice letter mailed to property owners in the benefit districts in the 2012-A General Obligation Bonds. These letters were mailed to the property owners on April 3, 2012. Lieu Ann Elsey City Clerk Dep.U.l:Ili~ill.6fFinance & Administration Office of City Clerk Lieu Ann Elsey, City Clerk 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 Salina April 3,2012 MAGNOLIA DEVELOPMENT PARTNERS LLC 6500 W 110TH ST OVERLAND PARK, KS 66211-1539 Dear Property Owner: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 e-mail: lieuann.elsey@salina.org Website: www.salina-ks.gov Please consider this letter your notice of a public hearing, which will be held by the Salina Board of Commissioners on Monday, April 23, 2012 at 4:00 p.m. The meeting will take place in Room 107 of the City-County Building, 300 W. Ash, Salina, Kansas. The purpose of this hearing will be to consider written or oral comments regarding proposed assessments for improvements to property within the City of Salina. Your property is described as follows: TractNumber: 14293 Legal Description: Lot 1, Block 1, Magnolia Commons Add City of Salina, Saline County, Kansas This property is included in the proposed assessments for improvements in Engineering Project No. 2008-2733. The proposed assessment to your property for the improvements is $514,101.75. Please be advised that this is NOT a request for payment, but a notice of the hearing where the Board of Commissioners will establish the actual assessment to your property. Once established, you will be sent a notice requesting payment for the assessment. At that time, you will have the option of paying the assessment or spreading it over a fifteen-year period that will show up on your real estate taxes and include interest. You are welcome to come to my office and examine the records regarding the proposed assessment. If you prefer, you may call me with questions or contact Dan Stack, City Engineer, at (785) 309-5725. Sincerely, ~ City Clerk Det>aytm~r.It.6fFinance & Administration Office of City Clerk Lieu Ann Elsey, City Clerk 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 Salina April 3, 2012 PREMIER PROPERTIES LLC 1259 W HUMBARGAR RD SALINA, KS 67401-2468 Dear Property Owner: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TOO (785) 309-5747 e-mail: lieuann.elsey@salina.org Website: www.salina-ks.gov Please consider this letter your notice of a public hearing, which will be held by the Salina Board of Commissioners on Monday, April 23, 2012 at 4:00 p.m. The meeting will take place in Room 107 of the City-County Building, 300 W. Ash, Salina, Kansas. The purpose of this hearing will be to consider written or oral comments regarding proposed assessments for improvements to property within the City of Salina. Your property is described as follows: Tract Number: 14294 Legal Description: Lot 1, Block 1, Premier Add City of Salina, Saline County, Kansas This property is included in the proposed assessments for improvements in Engineering Project No. 2008-2733. The proposed assessment to your property for the improvements is $60182.83. Please be advised that this is NOT a request for payment, but a notice of the hearing where the Board of Commissioners will establish the actual assessment to your property. Once established, you will be sent a notice requesting payment for the assessment. At that time, you will have the option of paying the assessment or spreading it over a fifteen-year period that will show up on your real estate taxes and include interest. You are welcome to come to my office and examine the records regarding the proposed assessment. If you prefer, you may call me with questions or contact Dan Stack, City Engineer, at (785) 309-5725. Sincerely, ~ City Clerk CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS April 2, 2012 4:00p.m. The City Commission convened at 2:30 p.m. in a Study Session on the Greeley Bridge. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Samantha P. Angell, Presiding Officer; Commissioner Kaye J. Crawford; Commissioner Aaron Householter; Commissioner Norman Jennings; Commissioner Barb Shirley ADMINISTRATION (8.1) Certification of final costs for 2011 special assessment projects. (8.1a) First reading Ordinance No. 12-10633. Dan Stack, City Engineer, explained the special assessment process and final costs. Mr. Stack noted that the public hearing would be held on April 23, 2012. 12-0063 Moved by Commissioner Jennings, seconded by Commissioner Householter, to pass Ordinance No. 12-10633 on first reading. Aye: (5): Nay: (0). Motion carried. ADJOURNMENT 12-0069 Moved by Commissioner Jennings, seconded by Commissioner Shirley, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:10 p.m. [SEAL] ATTEST: Iw L£eu;AvwvE4ey Lieu Ann Elsey, CMC, City Clerk b(S~P.A~ Samantha P. Angell, Mayor I hereby certify that the foregoing is a true correct excerpt of the action taken by the Governing Body at its regular meeting on April 2, 2012 regarding fIrst reading of Ordinance No. 12-10633. Page I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS April 23, 2012 4:00p.m. The City Commission convened at 3:45 p.m. in a Study Session for a Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Norman M. Jennings, Presiding Officer; Commissioner Samantha P. Angell; Commissioner Kaye J. Crawford; Commissioner Aaron Householter; Commissioner Barb Shirley PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public hearing on the 2011 special assessment projects. (5.1a) Second reading Ordinance No. 12-10633. Mayor Jennings opened the public hearing. Dan Stack, City Engineer, explained the final costs and the assessment process. There being no further comments the public hearing was closed. 12-0085 Moved by Commissioner Angell, seconded by Commissioner Householter, to adopt Ordinance No. 12-10633 on second reading. A roll call vote was taken. Aye: (5) Angell, Crawford, Householter, Shirley, Jennings. Nay: (0). Motion carried. ADJOURNMENT 12-0092 Moved by Commissioner Shirley, seconded by Commissioner Householter, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:51 p.m. [SEAL] ATTEST: (if L{,e,u;A VUlI E~ Lieu Ann Elsey, CMC, City Clerk blNorWUMtllvl. T~ Norman M. Jennings, Mayor I hereby certify that the foregoing is a true correct excerpt of the action taken by the Governing Body at its regular meeting on April 23, 2012 regarding second reading of Ordinance No. 12-10633. Page 1 (Published in the Salina Journal on April '!Je, 2012.) ORDINANCE NUMBER 12-10633 AN ORDINANCE LEVYING SPECIAL ASSESSMENTS ON LOTS, PIECES AND PARCELS OF GROUND IN THE CITY OF SALINA, KANSAS FOR THE PURPOSE OF PAYING A PORTION OF mE COST OF CERTAIN IMPROVEMENTS IN THE CITY. WHEREAS, the Governing Body of the City of Salina, Kansas (the "City") has authorized the following improvements (collectively, the "Improvements") in the City to be constructed pursuant to K.S.A. 12-6aOI and K.S.A. 12-6a19 et seq.: PROJECT NO. 08-2733 MAGNOLIA COMMONS ADDITION STREET, DRAINAGE & UTILITY IMPROVEMENTS The curb, guttering, paving, grading and drainage for approximately 1,600 lineal feet of Virginia Drive; 920 lineal feet of Virginia Court; and 625 lineal feet of Magnolia Road. The installation of approximately 10,073 lineal feet of twelve-inch water main, 965 lineal feet of teninch water main, 80 lineal feet of six-inch water main, fire hydrants, valves, fittings, and all appurtenances thereto. The installation of approximately 356 lineal feet of fifteen-inch sanitary sewer main, 2,207 lineal feet of twelve-inch sanitary sewer main, 3,528 lineal feet of eight-inch sanitary sewer main, manholes, wastewater lift station, and all appurtenances thereto. The installation of storm water detention, stormwater pump station and all appurtenances thereto. The installation of approximately 2,138 lineal feet of storm sewer, inlets, and all appurtenances thereto. WHEREAS, the total costs of such improvements have been determined; the Governing Body has caused the assessments against each lot, piece or parcel of land deemed to be benefited by such improvements, to be determined in the manner set forth in the resolutions as to advisability of the improvements provided for pursuant to K.S.A. 12-6a04; and an assessment roll has been prepared; and WHEREAS, such assessment roll was filed with the City Clerk and has been open to public inspection; and WHEREAS, the City Clerk, at the direction of the Governing Body, caused notice of the hearing on the special assessments to be published not less than 10 days prior to such hearing, and notice to be mailed to the property owners to be assessed, in accordance with K.S.A. 12-6a09; and WHEREAS, the Governing Body held a public hearing to consider each of the proposed assessments. BE IT ORDAINED by the Governing Body of the city of Salina, Kansas: Section 1. Special Assessments to pay the cost of the following projects are hereby levied against several lots, pieces and parcels of land liable for special assessments for said Improvements, as follows: \ ~arcel .~\ 2 ~\ 3 \11 10 PROJECT NO. 08-2733 MAGNOLIA COMMONS ADDITION STREET, DRAINAGE & UTILITY IMPROVEMENTS Legal Assessment Lot I, Block I, in the Magnolia Commons Addition .................... .................. $514,101.75 Lot 4, Block I, in the Magnolia Commons Addition ....................................... 664,452.25 Lot 3, Block 1, in the Magnolia Commons Addition ................... ................... $140,246.31 Lot I, Block I, in the Premier Addition ............................................................ $60,182.83 An unplatted tract of land located in the South half of the Southeast Quarter of Section 26, Township 14 South, Range 3 West of the Sixth Principal Meridian in Saline County, Kansas, more particularly described as follows: Commencing at the Southwest corner of the Southeast If. of said Section 26; thence North along the West line of said Southeast If. on an assumed 'bearing of North 00°09' 15" East, a distance of 96.25 feet to the POINT OF BEGINNING; thence North 89°38'00" East, a distance of 22.40 feet; thence North 66°25'36" East, a distance of 38.07 feet; thence North 81°21'24" East, a distance of 489.67 feet; thence North 09°41'31" West, a distance of 567.93 feet; thence North 20°27'30" West, a distance of 198.30 feet; thence North 35°49'23" West, a distance of 242.34 feet; thence North 52°55'59" East, a distance of 25.00 feet to a point on the westerly right-of-way of 1-135 highway; thence northwesterly along said RIW on a non-tangent curve to the left having a radius of 5579.58 feet, an arc distance of 223.78 feet, said curve having a long chord of 223.77 feet and a bearing of North 38°12'31" West; thence South 89°57'15" West, a distance of 112.89 feet to a point on the West line of the Southeast Y. of said Section 26; thence South 00°09' 15" West along said West line, a distance of 1221.88 feet back to the POINT OF BEGINNING. The above described tract of land contains 469,826 square feet or 10.79 acres, more or less ............................................................................................. $61,094.39 TOTAL COST TO THE IMPROVEMENT DISTRICT .............................................. $1,440,077.52 TOTAL COST TO CITY AT-LARGE ............................................................ ................. 1,591,452.26* TOTAL PROJECT COST ............................................................................................... $3,031,529.78 *Ofthe $1591,452.26 cost to be paid by the City at Large, $1,433,526.77 shall be recoverable by the City in benefit fees to be paid pursuant to K.S.A. 12-6a19 and Resolution No.1 0-6731 by the owners of the following property upon the filing by such owners of a petition to be served by the water system improvements constructed in connection with this Improvement District: Parcel 4 5a Legal Assessment A tract of land located in the Northeast Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northeast Quarter; Thence on an assumed bearing of South 00°05'09" East on the West line of said Northeast Quarter, a distance of 1696.31 feet to the Southwest corner of a parcel recorded in Saline County Register of Deeds, Book: 1168, Page: 1808, said point being the POINT OF BEGINNING; Thence North 89°52'43" East on the South line of said recorded parcel, a distance of 1355.10 feet to the West Right-of-Way line of 1-135; Thence on said Right-of Way line on a curve to the Right having a radius of 5579.65 feet, an arc length of 552.14 feet, a chord bearing of South 02°36'23" East, a chord distance of 551.91 feet; Thence South 00°13'42" West continuing on said West Right-ofWay line, a distance of 363.60 feet to a point 20.00 feet North of the South line of said Northeast Quarter; Thence North 89°55'27" West on a line parallel to and 20.00 feet north of said South line, a distance of 1377.39 feet to said West line; Thence North 00°05'09" West on said West line, a distance of 910.25 feet to the POINT OF BEGINNING. Said tract contains 1,254;J06.80 square feet, 28.795 acres, more or less ..................................................................................................................... 163,041.04 A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Corner of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 1585.99 feet; Thence South 00°27'27" West, a distance of 71.1 8 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 00°27'27" West on said South Right-of-Way line, a distance of 29.65 feet to a point on the centerline of Dry Creek; Thence South 81 °08'09" East on the centerline of Dry Creek, a distance of 23.01 feet; Thence South 52°23' 12" East on the centerline of Dry Creek, a distance of219.86 feet; Thence South 27°22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of 26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of 37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a 2 distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.18 feet; Thence South 01 °18' 17" West on the centerline of Dry Creek, a distance of 28.31 feet; Thence South 27°52'23" East on the centerline of Dry Creek, a distance of 26.19 feet; Thence South 51 °13' 46" East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41 °06'48" East on the centerline of Dry Creek, a distance of 79.39 feet; Thence South 33°41 '20" East on the centerline of Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30°10'59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43 '39" East on the centerline of Dry Creek, a distance of 75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of 245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of 127.14 feet; Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 82.84 feet; Thence North 89°52'43" East, a distance of 509.42 feet to a point that is 10.00 feet West, measured perpendicular, of the East line of said Northwest Quarter; Thence North 00°05'09" West parallel to said East line, a distance of 1278.92 feet to a point on the South line of a parcel recorded in Saline County Register of Deeds Book: 379, Page: 555; Thence North 89°54'29" West, a distance of 513.61 feet to the Southwest comer of a parcel 'recorded in Saline County Register of Deeds Book: 1209, page: 477; Thence North 00°33'09" West, a distance of 347.96 feet to the Northeast comer of a parcel recorded in Saline County Register of Deed Book: 1209, page: 477; Thence on said South Right-of-Way line on a curve to the Right, having a radius of 28707.87 feet, an arc length of 522.05 feet, a chord bearing of South 89°54'23" West, and a chord distance of 552.04 feet, to the POINT OF BEGINNING. Said tract contains 1,118,002.76 square feet, 25.666 acres, more or less ......................... 358,388.04 5b A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northeast Comer of said Northwest Quarter; Thence on an assumed bearing of South 00°05'09" East on the East line of said Northwest Quarter, a distance of 1696.31 feet to the POINT OF BEGINNING; Thence South 89°52'43" West, a distance of 519.42 feet to a point on the centerline of Dry Creek; Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 32.97 feet;' Thence South II °37'07" East on the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04°29'24" East on the centerline of Dry Creek, a distance of 90.73 feet; Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46'47" East on the centerline of Dry Creek, a distance of 145.30 feet; Thence South 14°07' 13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 19°24'04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" East on the centerline of Dry Creek, a distance of 82.06 feet; Thence South 07°45' II" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence South 89°59'23" East, a distance of 336.87 feet to the Southeast comer of said Northwest Quarter; Thence North 00°05'09" West on the East line of said Northwest Quarter, a distance of 930.07 feet to the POINT OF BEGINNING. Said tract contains 408,268.12 square feet, 9.3725 acres, more or less ....................................................................................................... $53,068.32 6 A tract of land located in the Northwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Northwest Comer of said Northwest Quarter; Thence on an assumed bearing of South 89°54'47" East on the North line of said Northwest Quarter, a distance of 130.18 feet; Thence South 00°20'00" East on the East Railroad Right-of-way line, a distance of 43.23 feet to a point on the South Right-of-Way line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 82, said point being the POINT OF BEGINNING; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of214.37 feet; Thence North 3 01 °18'27" East on said South Right-of-Way line, a distance of 17.00 feet; Thence South 88°41 '33" East on said South Right-of-Way line, a distance of 50.00 feet; Thence South 01°18'27" West on said South Right-of-Way line, a distance of 17.00 feet; Thence South 87°28'33" East on said South Right-of-Way line, a distance of 475.10 feet; Thence South 89°55'33" East on said South Right-of-Way line, a distance of 103.18 feet to a Permanent Easement line recorded in the Saline County Register of Deeds Misc. book: 96, pg: 87; Thence South 59°58'41 East on said Easement line, a distance of 171.05 feet; Thence on a curve to the left, having a radius of 28797.87 feet, an arc length of 200.80 feet, a chord bearing of South 88°48'46" East, a chord distance of 200.80 feet; Thence North 00°59'27" East continuing on said Easement line, a distance of 89.30 feet to a point on said South Rightof-Way line, Thence South 89°55'33" East on said South Right-ofWay line, a distance of 47.02 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28707.87 feet, an arc length of 185.40 feet, a chord bearing of South 89°17'33" East, a chord distance of 185.40 feet;-Thence South 00°31 '27" West on said South Right-of-Way line, a distance of 30.00 feet; Thence continuing on said South Right-of-Way line on a curve to the Left, having a radius of 28737.87 feet, an arc length of 30.10 feet, a chord bearing of South 89°30'33" East, a chord distance 30.10 feet; Thence North 00°27'27" East on said Right-of-Way line, a distance of 0.35 feet to the centerline of Dry Creek; Thence South 81 °08 '09" East on the centerline of Dry Creek, a distance of 23.01 feet; Thence South 52°23'12" East on the centerline of Dry Creek, a distance of 219.86 feet; Thence South 27°22'56" East on the centerline of Dry Creek, a distance of 164.03 feet; Thence South 21 °34'53" East on the centerline of Dry Creek, a distance of 26.28 feet; Thence South 15°37'44" West on the centerline of Dry Creek, a distance of 67.04 feet; Thence South 02°58'02" West on the centerline of Dry Creek, a distance of 37.35 feet; Thence South 46°59'34" West on the centerline of Dry Creek, a distance of 65.26 feet; Thence South 35°17'41" West on the centerline of Dry Creek, a distance of 89.38 feet; Thence South 43°37'21" West on the centerline of Dry Creek, a distance of 131.83 feet; Thence South 14°34'39" West on the centerline of Dry Creek, a distance of 64.18 feet; Thence South 01°18'17" West on the centerline of Dry Creek, a distance of 28.31 feet; Thence South 27°52'23" East on the centerline of Dry Creek, a distance of 26.19 feet; Thence South 51 ° 13' 46" East on the centerline of Dry Creek, a distance of 75.44 feet; Thence South 41°06'48" East on the centerline of Dry Creek, a distance of 79.39 feet; Thence South 33 °41 '20" East on the centerline of Dry Creek, a distance of 109.28 feet; Thence South 34°16'28" East on the centerline of Dry Creek, a distance of 108.89 feet; Thence South 30°1.0'59" East on the centerline of Dry Creek, a distance of 106.40 feet; Thence South 39°43'39" East on the centerline of Dry Creek, a distance of 75.83 feet; Thence South 26°02'09" East on the centerline of Dry Creek, a distance of245.31 feet; Thence South 15°18'03" East on the centerline of Dry Creek, a distance of 127.14 feet; Thence South 12°52'13" East on the centerline of Dry Creek, a distance of 115.82 feet; Thence South 11°37'07" East on the centerline of Dry Creek, a distance of 144.21 feet; Thence South 04°29'24" East on the centerline of Dry Creek, a distance of 90.73 feet; Thence South 05°30'33" East on the centerline of Dry Creek, a distance of 140.25 feet; Thence South 08°46'47" East on the centerline of Dry Creek, a distance ofl45.30 feet; Thence South 14°07'13" East on the centerline of Dry Creek, a distance of 99.03 feet; Thence South 1~24'04" East on the centerline of Dry Creek, a distance of 159.13 feet; Thence South 14°12'44" East on the centerline of Dry Creek, a distance of 82.06 feet; Thence South 07°45'11" East on the centerline of Dry Creek, a distance of 56.70 feet to the South line of said Northwest Quarter; Thence North 89°59'23" West on said South line, a distance of 2185.38 feet to the East Railroad Right-ofWay line; Thence North 00°20'00" West on the East Railroad Rightof-Way line, a distance of 2586.58 feet to the POINT OF BEGINNING. Said tract contains 4,732,112.18 square feet (108.634 acres) more or less ............................................................................................. 376,393.60 4 7 A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline County, Kansas, more particularly described as follows: Commencing at the Southwest Comer of said Southwest Quarter; Thence on an assumed bearing of South 89°50'27" East, a distance of 133.10 feet; Thence North 00°20'00" West, a distance of 2647.37 feet to the intersection of the East Railroad Right-of Way line and the North line of said Southwest Quarter; Thence South 89°59'23" East on said North line, a distance of 2185.38 feet to the centerline of Dry Creek and the POINT OF BEGINNING; Thence South 89°59'23" East on said North line, a distance of 336.87 feet to the Northeast comer of said Southwest Quarter; Thence South 00°05'01" East on the East line of said Southwest Quarter, a distance of 1267.92 feet to a point on a line that is 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West on a line that is 59.00 feet North of said South line, a distance of 505.20 feet to the centerline of Dry Creek; Thence North 45°29'12" East on the centerline of Dry Creek, a distance of 19.48 feet; Thence North 16°52' 13" East on the centerline of Dry Creek, a distance of 58.65 feet; Thence North 20°49' 15" East on the centerline of Dry Creek, a distance of 66.70 feet; Thence North 0]028'45" West on the centerline of Dry Creek, a distance of 85.97 feet; Thence North 09°51 '52" West on the centerline of Dry Creek, a distance of 138.24 feet; Thence North 07°07'28" West on the centerline of Dry Creek, a distance of 208.97 feet; Thence North 14°11 '36" West on the centerline of Dry Creek, a distance of 133.01 feet; Thence North 03°27' 16" West on the centerline of Dry Creek, a distance of 61.41 feet; Thence North 16°07'53" East on the centerline of Dry Creek, a distance of 66.66 feet; Thence North 38°43'53" East on the centerline of Dry Creek, a distance of 100.64 feet; Thence North 28°05'19" East on the centerline of Dry Creek, a distance of 99.20 feet; Thence North 32°31 '29" East on the centerline of Dry Creek, a distance of 125.25 feet; Thence North 16°16'22" East on the centerline of Dry Creek, a distance of 87.32 feet; Thence North 07°42'42" West on the centerline of Dry Creek, a distance of 55.15 feet; Thence North I 7°02'33" West on the centerline of Dry Creek, a distance of 42.95 feet; Thence North 07°45' 1 I" West on the centerline of Dry Creek, a distance of 0.18 feet to the POINT OF BEGINNING. Said tract contains 574,225.86 square feet (13.182 acres) more or less ...................... ......................................................................... 74,638.20 8 A tract of land located in the Southwest Quarter of Section 35, Township 14 South, Range 3 West of the 6th Principal Meridian, Saline C~unty, Kansas, more particularly described as follows: Beginning at the Northwest comer of the Wheatridge Addition to Salina Kansas, Saline County, Kansas; Thence on an assumed bearing of North 00°20'00" West on the East Railroad Right-of-Way line, a distance of 1019.03 feet to the North line of said Southwest Quarter; Thence South 89°59'23" East on said north line, a distance of2185.38 feet to the centerline of Dry Creek; Thence South 07°45'11" East on the centerline of Dry Creek, a distance of 0.18 feet; Thence South 17°02'33" East on the centerline of Dry Creek, a distance of 42.95 feet; Thence South 07°42'42" East on the centerline of Dry Creek, a distance of 55.15 feet; Thence South 16°16'22" West on the centerline of Dry Creek, a distance of 87.32 feet; Thence South 32°31'29" West on the centerline of Dry Creek, a distance of 125.25 feet; Thence South 28°05' 19" West on the centerline of Dry Creek, a distance of 99.20 feet; Thence South 38°43'53" West on the centerline of Dry Creek, a distance of 100.64 feet; Thence South 16°07'53" West on the centerline of Dry Creek, a distance of 66.66 feet; Thence South 03°27'16" East on the centerline of Dry Creek, a distance of 61.41 feet; Thence South 14°11 '36" East on the centerline of Dry Creek, a distance of 133.01 feet; Thence South 07°07'28" East on the centerline of Dry Creek, a distance of 208.97 feet; Thence South 09°51 '52" East on the centerline of Dry Creek, a distance of 138.24 feet; Thence South 01 °28' 45" East on the centerline of Dry Creek, a distance of 85.97 feet; Thence South 20°49'15" West on the centerline of Dry Creek, a distance of 66.70 feet; Thence South 16°52'13" West on the centerline of Dry Creek, a distance of 58.65 feet; Thence South 45°29' 12" West 5 on the centerline of Dry Creek, a distance of 19.48 feet to a line 59.00 feet North of the South line of the North Half of said Southwest Quarter; Thence North 89°54'56" West parallel to said South line, a distance of 393.30 feet to the East line of said Wheatridge Addition; Thence North 00°23'36" West on the East line of said Wheatridge Addition, a distance of 243.96 feet to the North line of said Wheatridge Addition; Thence North 89°51' 19" West on the North line of said Wheatridge Addition, a distance of 1618.00 feet to the POINT OF BEGINNING. Said tract contains 2,220,091.93 square feet (50.966 acres) more or less ............................................................................................. 176,586.30 9 That part of the North Half (N Y:z ) of the Southeast Quarter (SE V.) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6th P.M., lying West of 1-35 Highway, less a 1.85 acre tract described as follows: Beginning at the Southwest comer of said N Y:z of the SE v.; thence Northerly along the West line of said N Y:z of the SE V. to a point 1379 feet North of the Southwest comer of the SE V. of Section 35; thence Easterly parallel to the South line of said SE V. to a point on the westerly right-of-way line 1-35 (now 1-135) Highway, said point being 1267.26 feet West of the East line of said SE v., thence with an angle of 90°02'45" to the right along said right-of-way line to the South line of said N Y:z of the SE v.; thence Westerly along said South line of said N Y:z of the SE V. to the point of beginning; The South Twenty (20) feet of the Northeast Quarter (NE V. ) of Section Thirty-five (35), Township Fourteen (14) South, Range Three (3) West of the 6th P.M., Saline County, Kansas, lying west of the right-of-way of Interstate 1-135. The above described land contains 1,780,310.41 square feet or 40.870 acres, more or less .......................................................... 231,411.26 Section 2. That the owners of Unplatted Tract 10 has requested a deferral of the special assessments levied on said tract hereunder; said tract qualifies under K.S.A. 12-6, II 0 et seq. for a deferral of special assessments; and the City hereby grants a deferral of the special assessments levied hereunder on said tract for a period of 15 years or until such property is platted or developed, whichever occurs first. Section 3. Unplatted Tracts 4, Sa, 5b, 6, 7, 8, and 9 benefits from a portion of the water, sanitary sewer, and the street improvements (Magnolia Road and Virginia Drive) constructed as part of such project, but are not included within the Improvement District because the property is currently outside the City limits and will not be immediately served by the water, sanitary sewer and street improvements. Pursuant to the provisions ofK.S.A. 12-6aI9, whenever any owner of property within the Unplatted Tracts 4, Sa, 5b, 6, 7, 8, and 9 requests by petition to be served the improvements constructed as part of such project, the City intends to charge benefit fees in the manner set forth in K.S.A. 12-6aI9. Section 4. The special assessments provided for in Section I of this Ordinance shall be certified by the City Clerk to the County Clerk in the same manner and at the same time as other taxes are certified. The assessments and will be collected in fifteen (IS) equal annual installments, together with interest on such amounts at a rate not exceeding the maximum rate therefore as prescribed by the Act. The first installment shall become due with the first payment of general property taxes for the year 2012. Interest on the assessed amount remaining unpaid between the effective date of this Ordinance and the date the first installment is payable, but not less than the amount of interest due during the coming year on any outstanding bonds issued to finance the Improvements, shall be added to the first installment. The interest for one year on all unpaid installments shall be added to each subsequent installment until paid. Section 5. The owner of any piece or parcel of property liable for any such assessments may redeem his property, in whole or in part, from such liability by paying to the City Treasurer the entire amount, or a portion thereof, chargeable against said property, at any time on or before May 29, 2012, and to the extent of any such payment, the property so paid on shall not thereafter be liable for any further assessments for the cost of said improvements, nor for any interest due thereon. Section 6. This Ordinance shall take effect from and after its passage and publication in the official City newspaper. Introduced: April 2, 2012 Passed: April 23, 2012 ~~ [SEAL] ~U~ A" EI"Y~'''' 6 Publisher's Affidavit TOTAL PR~~gf~Jil· 'r~:~lg: OfO?ry7~r~e.t' ,:~t ~~~hdi~:rt~~. S:I~;!1~~~~ $3.031,529.76 ,Thence South 41°06'48" of 130,18 feet· Thence *Of the $1591.452.26 cost East on the centerline 01 South 000 20'00'\ l'2ast on t:>a~~&?al~,b.~~~~5~1~7a~ ~9:3~~~;~;' fh~~~:n§gur~ :~~;hl-O~~~~ 11n~~r!r~~~ shall be recoverable by 33~41'20" East on the cen-lance of 43 23 feet 10 a the City In benefit fees to tarllne of Dry Creek. a dls-point on the South. ~~.~~~ra~a~~o~u~tn ~ tahn;n~e Q~oJ£9:4e~,~~;J,\ '~~~~!dot-;'ri'a~heljn~allriee · ~~ ~fO~!~;II~~~: ~~g: 5~stco;;!~C,e aCd~ir~~6: ~l '~f~~tyb~~~lSW6,Cl~~.e~~~ :~~h ~~~~~hg, !11~~ItI~~ i !g~i~~5~ega"':~~C::~~ ~~?N-f~Pt B~~II~I~~~ to be S8f'\red by the water larllne of Dry Creek, a dIS· Thence South 8Bo41'33~ system Improvements tance of 106.40 fset; East. on said South ~~~hY;l~p~gv~~~~Bfs~ :'~:r~~ fh"eU~e~~;~~~3~; ,~~g~-of~'t'al1~nj7 af:!~: , being duly sworn trict: IDry Creek, a distance 01 I Thence North 0'·'8'27) Parcel Legel 7583 feet: Thence South East on said South T po-aT Coordjnator Assessment 26°02'09" East on the cen· Rlghl-of-Way fine a dis· b ~ated inA :~~ct ~~~~~~t g:~I~: O~f~~~~1 ~:~~~; ~~~~e ~ou~~ ·gg~4 ~?;~i Christy Fink declare that I am a of THE SAUNA JOURNAL, a daily newspaper Quarter of Section 3S, 'Thence South 15°18'03h East on said South ~~~;eS~i~e~t40f ~~u~ti g~t&~e~,e aC~~rari~~: ~f :i;~~of~a~JI.oed af:!~: Published at Salina, Saline County, Kansas, and of Principal Meridian, Saline 1127 14 lee); Thence Soull> Thence South 01·18'27': County, Kansas, more i 12°52'f$" taston thecen-West on said South general circulation in said county, which newspaper fo'lg~~ar~~,;;~~~r~g ~~ i~~I~: O~ry8'1.~":' ~~:. ~~~~ol~1a~~I~eo '\~!t 1~~d N~~~~::~t cg~:~e~~ I ~~~r~8 d~;;~~e eor~8~~; ~~~~ceo~u~~197~§~'~r~ has been admitted to the mails as second class matter in l~~~~~gon 6~ ass~~~ 'J~:l ~=ft~~~~:~~~~~ f!t~~~of~~a.r7~~fb ~f~~t . d 00°05'09" East on the :pendlcular, of the East hne Thence South 89°55'33" Sal county, and continuously and uninterruptedly :~~b~~e~~ aS~~~~~~1 r~~:~:~~hrt"r,esdci?~~'i!i ~~sh;.o?~a s~:~e ~o~i~.· bl' h d f f"' . 1696.31 feel to the South-,Wast parallal to saId East lance at 10~.18 feet to a pU IS e or Ive consecutive years prior to first, west corner of a parcel re' lime, a dislance 011278,92 Pennan'ent Easement line corded In Saline County-jfsel to a point on the recorded In the Saline , ~fa~~te~~~e?e1eg3e,S:~ i~r~l~~ ~~ffnga~~ry 2?~~tyb~~~~s~~.o~ge~~~ _ pOint being the POINT OF I' Book: Thence South 59°58'41 ,BEGINNING; Thence hence East on said Easement North 89°52'43" East (In sst, a Ime, a distance of 171 05 the South line of said re' I feet to feet; Thence on a curve to publication of attached notice, and that the ___ O=rd:::i:::n:.::a;,:nc::e:.,;1::2:.,;-1::0:: ;:6;;::33::..... ___ Notice has been correctly published in the entire issue of said gf~~E,~rr~e~td~ota'tn~ ':!1~~r:~~:~~~faJ~~: rae7~~:a~avi~%t~ r:~iu~~J ~~~~~!~~t;~~~aKn'm:a~ ! ~g~~~Y 1~~~~t~a~~ D~~~ ~ehnJt~h g~a~~n~ a~f ft~ut~ ~~~J-fJ t'f:ea~I~I~te b~~in~ :~:~:e ~O~~st~~D;;'O~; :;!~~:~or~~b ~o cr~~? 2012 'a radius of 5579,55 feet/347.96 feet to the North· Thence North 00u59'27': an arc length of 552,14 I east camer of a parcel re-East continumg on said ~;~iha O~~~~~2~~a~~S~, o~ ~:gl~?e:n ora61~:d cg~~ ~t~3~~~~(Io ~ ~~tng~ ribed and sworn to bef1re me, t11is P ""''' chord distance of 551.9111209, page. 4n; Thence said South Alght~of-Way feet: Thence South on.. sa id South I hne, Thence South 00°13'42" West continuing 'Rlght-ot:Way'1frZ'~ ~Sn a 89°55'33" ~ast on said on said We sl curve to the 'Rlght:havlng South Right-of-Way 11ns. a· Right-of-Way line, a dIS a radius of 28707 87 feet distance of 47.02 feet · fance of 363 eo feet fo a an arc length ot' 522.05 Th~nce continuing on said, ~o.-. lAD 20 J '"L ' ft°lnt 20.00 feet North 01 feet, a chord bearing of South Rfght-of~Way line ~ • , he South line of .ald: South 89.54'23· West, on a curv. to the Left, ~ ~~~~~~:aJJrth ~~~;!iF ~ ~~~.o~ f~~~dtod:~~a~~I~ ~~%"187 afe~~dl~~ a~~ -..:::...--, " ,.~~st2~~0~ 1~~~l'~~~~1 ~~ Pr~:tEGINN~~n I a~~I~ ~~nJ~ gla~~g4~f f~~ut~ said South line, a dIStance 1,118,00276 square feet t 89"17'33" East, a chord of 1377 39 feet to sald 25 666 acres, more 0;, distance of 1 BS 40 feet; &.._~!!;i-=::::"-~-+-------;:"....:--:::-c-::-------~ l;b~~h,I09~; J;~:~cgn N~~ , h~' A tr~r~~~d 10-,~:~tce 0~ou~~13o<>~6~[;; Notary Public : ~b~~dlf:et ~o dtl~~a~~N~ btiJ~~e~n o\h~e~~~~w:~t i ~~~~of~aY361~ed af~!t Printer's Fee $1,789,50 (P~bl\~j,ed;~the WHEREAS, th"·total 26, Townshlp··t4 'South, Salina Joumal costs of such Improve, Range 3 West of the Sixth Apn126,2012) ments have been deter· Principal Mertdlan m Sa· ORDINANCE NUMBER • ~~~;d~8i~~us~~~~~n~ hn') County. Kansas, more cAN OR~~~~~a;e lEVY~ sessments against each r~~~tar~o~e~~~~~g ~~ 1NG SPECIAL ASSESS. ~!~~:de~: ~:c~~~~::~. ~ ~g~We~~tt 1rf~9~a?J ~~Sli AN,&N PA~8J& by such Improvements, to Section :26, thence North OF GROUND IN THE be determmed In the man-along the Westline of saKI CITY OF SALINA, KAN-ner set forth In the resolu-SOutheast 114 on an as· SAS FOR THE PUR. tlon5 as to a.dvisaoility of surned beanng of Norln POSE OF PAYING A the improvements pro· 00°09'15" East, a distance PORTION OF THE COST vldad ler pursuant to ,019625 leet to the POINT OF CERTAIN IMPROVE. K.S A. ,2·6a04: and an OF BEGINNING; Ihence MENTS IN THE CITY. assessment rOll has been North a9u3a'OO~ East, a WHEREAS, the Govern-prepared, and dlsta.nce 01 2240 feet; lng Body of the City 01 Sa-WHEREAS, such as-th.ence North 66°25'36" hna, Kansas (the ~Clty") sessment roll was flied East, a distance of 3a 07 has authOrized the follow-with the City Clerk and feel, thence North Ing improvements (collec-rn~~~~6~; ~:n to publrc ~r~~§:~7Eat~er: dt~I:~: ~~~lt~1 !~h3,e '6iW~gV:e WHEREAS, the City N,orth 09"41'31" West, a ~0$Shruct~~.~~r8~an~nt~ R::rk'GaJV~~I~~ec~~~d~~ f~~~~~e N~rt~6~~. .3 2i~~: KpSR~]~C~a~b~b~jj33 ~~U;~t~~~c:e~~ih~::~= ~:~:io f:et,~~$:~~:~o~~ MAGNOUA COMMONS ~i~t;h~~ ~~P:~~~~r"~ ?:~~~'2~~ ~4~~4 a f:!~; D~WtcWE~M~~~ fcu~ t::i~~3't~~~e n~r~cpe ~a~~~: ~:~~c:~~5i~7~ Til rb utt . erty owners to be as'· feetro a pOtnt on the west-' Ing~ ~~8dIRg :~Id9df':;~: sessed, In accordance erty. rlght-of~way of 1-135 ~?M~tneafrp'~oe~l~r~lll ~~J<E~':A~~~O~;o~~~~ ~~;t:~:: a~;;~ldn~ ~ p~~~a O?r~I~~I~~O d~~~~ hnJlar~~dfo ~~dsl~ef~~~g ~hne ~e~O~~!i~~t~tr~~~~ ~ and 625 hneal feet 01 of the propoSed 8SSQ'SS 5579.58 feet, an arc diS· MagnOlia R~d. ~~n~ ORDAINED by the ~~~: ~~~~ ~~:~tc~~ The Installation of ap ~S:~~g~~~~ the City ~g22~i7~~~~ a3~0~ ~~~r: ~~~Xi~e~te~r ~e~~~j~~h West; thence South: water main, 965 hneal ~,Speclal As· 89°57'15" West, a diS" feet of ten-Inch water sessments to pay the cost tance of 112,89 feet to a main, 80 lineal feet of of the following projects POint on the West bne of six-Inch watElr mam, fire are hereby levied against the Southeast 114 of saki . hydrants. valves, fittings several lots, pieces and Section 26; thence South I fhne~e:~~ appurtenan~es ~~~~i~i ~~~:~~~:~~: :6~ W~Of'~~~~:Sai~~~~:8~, The installation 01 ap ~!lmprovements,asfOl-~~~~Bd~ek~~l~~~~~ r:~f~1IW~~n~i~~h I~en~~ PROJeCT NO. 08-2733 The above described tract -tary sewer main, 2,207 MAGNOLIA COMMONS of fand contains 469,826 lineal feet of twelve-Inch oARAODINITAIOGNES&TURTlELETm' square feet or 10,79 sanitary sawer main acres. more or less ;;~~f'I~I~:ar s~:'~a~~ par~:P~;MENTS TOTAL coslSi~'~' sewer main, ma.nholes, Assessment IMPROVEMENT D'S·, wastewater Ilh station, 1 Lot 1, Block 1, in TRICT $1,440,077.52 and aU appurtenances the Magnolia Commons TOTAL COST TO CITY thereto, AddiUon $5'4,10'75 AT·LARGE 2 Lot 4, Block 1, in The Installation ot storm. the Magnolia Commons water detention, storm. Addluon 664.45225 water pump station and 3 Lot 3, Block 1, 10 all appurtenances the MagnoiJa Commons lhereto. ' Addiuoo $f40,246,31 11 lot1,Block1,ln the Pfel')'uer Adchtion $60,'82 83 lOAn unplatted tract of lana located In the South half 01 the South east Quarter of SectIon OF BEGINNING. Said TownshiP 14 South' , Thence continuIng on said ~ t rae teo n t a Ins Range 3 West of the 6th I South Right·of·Way line , , ,254,306,90 square feet, Princlf,al Meridian, Sahne J on a curve to the Left. 28.795 acres, more or COUr1 y Kansas more: having a radiUS of ' less. 163;041.04 'parucul~r~¥ descr:bed as 2B7S7.81 feet. an arc ,5a A tract Of land 10-tollows: Commencmg at: length of 30,10 teet, a' · cated In the Northwest the Northeast Comer ott chord bearing of South Quarter of Sectlon 35," saId Northwest Quarter, 89"30'33~ East, a chord Township 14 South, Thence on an d dlstanca 3010 feet· I Rang,e 3 West of the 5th bearing 0' aS~~~~h' Thence North 00027'27~ · b~~~fy~' ~~~~:~: s~~~: ~~~~5;1~~H Of~ld o~o~hhe! ~;:: °all ~~r8~b~ht~t-~§S ro~~~~arICo~~:~rndg ~J ;~esi6~~~3~erfe~tdl~cia7~:. ~~t d~e!~~T~~t~IIS~uf~' ;~ldN~g~~!:~tCf{Q:~e~! '!~R~~Je WouThE~~~~~~~i' r~~I~~cgr o~s6~~ek~~ CJI~: Then~e on an assumed, West, a distance of' tance of 23.01 feet. beoan~g" .of South. 519.42.feet to a pomt on Thence South 52°23:12" 89 5447 East on th~ the centerline of Dry East on the centerline of North line of said North·' Creek; Thence 50lftn Dry Creek, a dtstance of west Quarter, a dIstance: 1~52'13.Eastonthecen-21986 feet Thence South of 15B5,99 feet; Thence terllne of Dry Creek, a dis-. 27D22'SS" East on the ceoSouth 00°27'27" West, a tance of 32 97 feet" terllne Of Dry Creek. a dlsdistance of 71.18 teat to a Thence South "1"'37'07J ' tance of 164.03 feet;~ pOInt on the South East on the eenterlin& of Thence South 2'~34'53H Right-of-Way. line re" Dry Creek, 8 distance of East all the centerline of ~~~dn~; A~gIS:~fe of ~~~~ ~~2~J2~e~a1~~~~~tn ~ry2~'~~' ~~~~t;n~guf~ Mlfg book 96, , terllne of Dry Creek, a dl~ 15"37'~4" West on the sa p tance of 90.73 feel centerline (If Dry Creek, a ~~~~le ~:r~~ ~h~u~e~~~~~~3~~ ~~~~~e S~~t~7ci~~5~~i·\ ~g~:-ot~{Va:~I~e, ~o~l~. ?X~J;~:i: !fu~~~n~~uf~ ~~sb~~e~~e a c~~t::-~: g~ ~~~r o~ t~~'~n~~~~nr: if :~:!tr J:b~~hea c3t~: ~~o~,~:!: ~:s~c~~Ot~~ ~~oi,~k~~~eo~cft,~~~ t~eCn~e 0~oJ~5'13J!'0~~,eJ~, ~f~~~~~e ~~ ~r.¥.~Je~~e~ . terllne of Dry Creek, a dls-East on the centerline of:Thence South 35"17'41" tance of 23,01 feet; Dry Creek a dIStance of. West on the centerline of ~~:r~~'fho~~en1i;ff~~I~ ;. ~~~,~~~J~e;;fh::~~" Rg~3~~::~:' f~~sc~~gJ~, ~1~.fJY~i, ~~~~~n~&J'~ terilM of Dry Creek, a das. 437s"]'21'" West on' tha~7022'56" East 0 th tance of 159.13 feet; centarllne of Ory Creek, a terlme of Dry Cr~k ~Cd: Thence South 14°12'44" distance of ;31.83 feetA i:ance of 164 os' feet East on the centerline of Thence .South 14°34'3~, Thence SOlltl'1 21"34'53' OlY Creek, a distance of West on the centerline Of East on the centerline of 82.06, f~t, Thence SOulh Dry Creek, a djstanc~ of Dry Creek a dlstanc:e of 07"4511 East on the cen-64.18 feet; Thence South 2628 feet' Thence South terllne of Dry Creek, a diS. 01°18'17" West or;! the ~;~~:~~~'~rcist c~2~he ~~ ~~n~ It° s~~t ~oO~h~ ~f~~~~~e gJ ~~.~1~1~e~ -dIstance 01 it 04 feet west Quarterj, Thence Thence South 27°52'23" Thence South 02u58'02! South 89"59'2.,." East, a East on the centerline of West ~~ the centerline of ~~~tagg~~~e~~f-~br~~~t ~ ~£Yl ~~:~~.' -rh~~s~:n~gur~ 8?3~ fe:~' ~~~~n§gut°~ said Northwest Ouarter; 51°13'46" East 01'1 the cen-46~59'341t' West on the Thence North OOD05'09M tarllne of Dry Creek, a discenterhne of Dry Creek a West on the East line of tance of 75.44 feet; distance of 6S 26 fe~t. S81Q Northwest Quarter, a ;Jhence South 41°06'48D Thence SoLrth 35<>'7'4111 distance of 930 07 feet to East on the centerline of West 011 the centerline of the POINT OF BEGIN· Dry Creek, a distance of Ory Creek a distanCe of NrNG Said tract contains 79 39 feet;.. Thence South 8938 feet'Thenc So til 406,266.12 square feet, 33°41'20·~astonthecen-43Q37'2t'" Weat ~n fhe 9.3725 acres, more or terlmeof Dry Creek. a diScenterline of DrY Creek a less $53,068.32 tanc:s of 109,26 feet, dlslance of 131 83 feEn' 6 A tract of land 10' Thence South ~4a1S'28" ,Thence South 1'4u34'39'~ cated In the Northwest East on the centerline of Wesl on'the ear"ltarline 01 ~uarter of Section 35, Dry Creek, a distance of Dfy Creek a distance of ownshlp 14 South, 10889 feet. Thence South 64 18 feet' Thence South Range 3 West of the 6th 30°10'59" East on the cell-01018'17'" West on tha PrincIpal Meridian, Saline-t~rlll\e of Dry Creek. a dlscenterline of Dry Creek a County, Kansas. more tance of 106.40 feet: distance of 28,31 fe~t. partlcu!arly described as Thence South 39°43'39-Thence South 27a52'23~ 'DHows, Commencing at East on the centerline of East on/tha centerline of the Northwest Corner of Dry Creek, a distance of Dry Creek a dIstance of said Northwest Quarterd 7583 feet;...!hence South 26 19 feet;' Thence S Irth Thence on an assume 2S~02'09"::a.st on the cenS1013'46"East on the ~en-bearlflg of South ,terlme of Dry Creek, a dis-89~54 4T East on the lance of "245.;11 I~.t; Department of Finance & Administration Office of City Clerk Lieu Ann Elsey, City Clerk 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 TELEPHONE (785) 309-5735 FAX (785) 309-5738 TOO (785) 309-5747 e-mail: lieuann.elsey@salina.org Website: www.salina-ks.gov I, Lieu Ann Elsey, hereby certify that the attached document is a sample of the prepayment notice letter and statement mailed to the property owners in the benefit districts included in the 2012-A General Obligation Bonds. Lieu Ann Elsey City Clerk Department of Finance & Administration Office of City Clerk Lieu Ann Elsey, City Clerk 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 April 24, 2012 MAGNOLIA DEVELOPMENT PARTNERS LLC 6500 W 1 10TH ST OVERLAND PARK, KS 66211-1539 Dear Property Owner: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 e-mail: lieuann.elsey@salina.org Website: www.salina-ks.gov On April 23, 2012, the Salina City Commission held a public hearing regarding special assessments for improvements to property you own. These special assessments were set by ordinance on that same day. The following statement shows the amount of the assessment to be $514,10 L 75. You have the following options: 1) The assessment may be paid in full or in part at this time. To do this, return the yellow copy of this statement, with your check, by 5:00 p.m., May 29, 2012. If paid in part, the unpaid balance will be assessed by the method below. 2) You may choose to pay your assessment with your property taxes over the next fifteen years. The City will issue IS-year general obligation bonds to provide for the long term financing of the improvements. The principal and interest will be calculated and certified to the County Clerk to be included on your annual property tax bill. The interest rate will be set when the bonds are sold, but it is not expected to exceed 6.0%. To accept this option, do not pay the amount on this statement. No payment is required at this time and you do not need to notify our office of your decision, unless you would like to make a payment. Property Information: Legal Description LOT 1, BLOCK 1, MAGNOLIA COMMONS ADD Tract: 14293 Job Number 2008-2733 Principal Amount $514,101.75 First year of Assessment -2012 Last year of Assessment -2026 If you have any questions regarding this matter, please feel free to contact our office. Sincerely, Lieu Ann Elsey City Clerk CERTIFICATE OF NO PROTEST STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) I, City Clerk of the City of Salina, Kansas, do hereby certify that no suit to set aside the assessments levied pursuant to Ordinance No. 12-10633 or to otherwise question the validity of the proceedings in connection with Project No. 08-2733 Magnolia Commons Addition was brought before the expiration of thirty (30) days from the publication of Ordinance No. 12-10633 fixing the assessments related to said Improvement District. WITNESS my hand and official seal on July 12,2012. SPECIAL ASSESSMENT PREPAYMENTS 2012 Tract Number Name Assessment Amount Project No. 08-2733 30865 Magnolia Development Partner $ 664,452.25 $ 664,452.25 GRAND TOTAL $ 664,452.25 I, Lieu Ann Elsey, hereby certify that the that the amount of $664,452.25 was paid by the owners of the properties assessed during the 30-day prepayment period ending May 29,2012. Lieu Ann Elsey, City Clerk 6/18/2012 CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 11, 2012 4:00p.m. The City COITL'TIission convened at 3:00 p.m. in a Study Session on Budgetary Goals. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Norman M. Jennings, Presiding Officer; Commissioner Samantha P. Angell; Commissioner Kaye J. Crawford; Commissioner Aaron Householter; Commissioner Barb Shirley ADMINISTRATION (S.3) General Obligation Bonds and Temporary Notes (S.3a) (8.3b) (S.3c) (S.3d) Resolution No. 12-6909 formalizing and adopting a Tax and Securities Compliance Procedure. Resolution No. 12-6910 authorizing the offering for public sale of general obligation temporary notes and bonds. First reading Ordinance No. 12-10642 authorizing the issuance and delivery of general obligation bonds, Series 20l2-A. First reading Ordinance No. 12-10644 authorizing the issuance and delivery of general obligation bonds, Series 20l2-B. 12-0130 Moved by Commissioner Angell, seconded by Commissioner Crawford, to adopt Resolution No. 12-6909. Aye: (5). Nay: (0). Motion carried. 12-0131 Moved by Commissioner Angell, seconded by Commissioner Shirley, to adopt Resolution No. 12-6910. Aye: (5). Nay: (0). Motion carried. 12-0132 Moved by Commissioner Angell, seconded by Commissioner Crawford, to pass Ordinance No. 12-10642 on first reading. Aye: (5). Nay: (0). Motion carried. 12-0133 Moved by Commissioner Angell, seconded by Commissioner Shirley, to pass Ordinance No. 12-10644 on first reading. Aye: (5). Nay: (0). Motion carried. 12-0135 ADJOURNMENT Moved by Commissioner Householter, seconded by Commissioner Shirley, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 5:50 p.m. [SEAL] ATTEST: bl L~AvvvvE4ey Lieu Ann Elsey, CMC, City Clerk b/NcwYJIUM'V}vI. ~ Norman M. Jennings, Mayor I hereby certify that the foregoing is a true correct excerpt of the action taken by the Governing Body at its regular meeting on June 11, 2012 regarding Resolution Numbers 12-6909 and 12-6910 and first reading of Ordinance Numbers 12-10642 and 12-10644. Lieu Ann Elsey, City Clerk Page 1 RESOLUTION NO. 12~691O 'RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 20 12-A, GENERAL OBLIGATION REFUNDING BONDS, SERIES 20I2-B, AND GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2012~1 OF TIlE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the ~'Issuer"), has heretofore authorized certain internal improvements described as follows (collectively, the "Note Improvements"): Project Description East Magnolia Road Improvements Stone Lake Addition Magnolia Hills Subdivision, Phase IV Total: Ord.IRes. No. Res. 11-6812 Res. 12-6904 Res. 12-6902 Authority K.S.A. 12-685 et seq. K.S.A. 12-6aOI et seq. K.S.A. 12-6aO I et seq. Amount $ 4,500,000.00 1,460,979.00 287.483.69 $ 6,148,461.69 WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds to pay the costs of the Note Improvements; and WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its obligations incurred in constructing the Note Improvements prior to the completion thereof and the issuance of the Issuer's genera) obligation bonds, and it is desirable and in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer, and WHEREAS, none of such temporary notes heretofore authorized have been issued and the Issuer proposes to issue its temporary notes to pay a portion of the costs of the Note Improvements; and WHEREAS, the Issuer proposes to issue its temporary notes to pay a portion of the costs of the Note Improvements; and WHEREAS, the Issuer has heretofore authorized certain internal improvements described as follows (the "Bond Improvements," and together with the Note Improvements, the "Improvements"): Project Description Magnolia Commons Ord.lRes. No. Ord. 12-10633 Authority K.S.A. I2-6aO 1 et seq. Amount $ 3,031,529.78 WHEREAS, the Issuer desires to issue its general obligation bonds in order to permanently finance the costs of such Bond Improvements and to retire the following temporary notes of the Issuer, which were issued to temporarily finance a portion of the costs of the Bond Improvements (the "Refunded Notes"): ; and Series 2011-1 Dated, Date July 15,2011 Maturity Date August 1,2012 Original Amount $3,400,000 WHEREAS, the Issuer proposes to issue its general obligation bonds to pay a portion of the costs of the Bond Improvements and to retire the Refunded Notes; and WHEREAS, the Issuer has heretofore issued and has outstanding general obligation bonds; and WHEREAS, due to the current interest rate environment, the Issuer has the opportunity to issue its general obligation refunding bonds in order to achieve an interest cost savings on all or a portion of the debt represented by such general obligation bonds described as follows (collectively the "Refunded Bonds"): Dated Maturity Original Outstanding Redemption Redemption Series Date Date Amount Amount A!!!.!!!!.!!.! Date 2003-A July 15,2003 2014 $4,350,000 $1,765,000 $1,125,000 October 1,2013 2004-B July 15,2004 2013 4,053,000 1,390,000 1,010,000 October 1,2012 2005-A July 15,2005 2014 4,210,000 2,200,000 1,535,000 October 1,2013 ;and WHEREAS, the Issuer has selected the firm of George K. Baum & Company, Kansas City, Missouri ("Financial Advisor"), as financial advisor for one or more series of general obligation bonds of the Issuer to be issued in order to provide funds to permanently finance the Bond Improvements, to retire the Refunded Notes and to refund the Refunded Bonds, and a series of general obligation temporary notes of the Issuer to be issued in order to provide funds to temporarily finance the Note Improvements; and _ WHEREAS, the Issuer desires to authorize the Financial Advisor to proceed with the offering for sale of said general obligation bonds and notes and related activities; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation bonds and notes; and WHEREAS, the Issuer desires to authorize the Financial Advisor and Bond Counsel, in conjunction with the Clerk, to proceed with the preparation and distribution of a preliminary official statement and Notice of Sale and to authorize the distribution thereof and all other preliminary action necessary to sell said general obligation bonds and notes. BE IT RESOLVED BY THE GOVERNING :BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Issuer is hereby authorized to offer for sale the Issuer's General Obligation Internal Improvement Bonds, Series 2012-A (the "Series 2012-A Bonds"), General Obligation Refunding Bonds, Series 2012-B (the "Series 2012-B Bonds") and the General Obligation Temporary Notes, Series 2011-1 (the "Notes," and together with the Series 2012-A Bonds and the Series 2012-B Bonds, the "Obligations") described in the Notice of Sale, which is hereby approved in substantially the form presented to the governing body this date. Section 2. The Mayor and Clerk in conjunction with the Financial Advisor and Bond Counsel are hereby authorized to cause to be prepared a Preliminary Official Statement, and such officials and other representatives of the Issuer are hereby authorized to use such document in connection with the sale of the Obligations. Section 3. The Clerk, in conjunction with the Financial Advisor and Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel"), is hereby authorized and directed to give notice of sale of the Series 2012-A Bonds by publishing a summary of the Notice of Sale not less than 6 days before the date of the bond sale in a newspaper of general circulation in Saline County, Kansas, and the Kansas Register lind by distributing copies of the Notice of Sale and Preliminary Official Statement to prospective purchasers of the Obligations. Proposals for the purchase of the Obligations shall be submitted upon the terms and conditions set forth in said Notice of Sale, and shall be delivered to the governing body at its meeting to be held on such date, at which meeting the governing body shall review such bids and shall award the sale of any or all of the Obligations or reject any or all of the proposals. Section 4. For the purpose of enabling the purchaser(s) of the Obligations (the "Purchasers") to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), the Mayor and Clerk or other appropriate officers of the Issuer are hereby authorized: (a) to approve the form of said Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preliminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and (c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchasers to comply with the requirement of the Rule. Section 5. The Issuer agrees to provide to the Purchasers within seven business days of the date of the sale of the Obligations or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchasers, whichever is earlier, sufficient copies of the final Official Statement to enable the Purchasers to comply with the requirements of the Rule and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. -Section 6. The Mayor, Clerk and the other officers and representatives of the Issuer, the Financial Advisor and Bond Counsel are hereby authorized and directed to take such other action as may be necessary to carry out the sale of the Obligations. Such officials are also directed and authorized to make provision for payment andlor redemption of the Notes from proceeds of the Series 2012-A Bonds and other available funds. Section 7. The Financial Advisor is hereby authorized to submit a bid or participate in a syndicate submitting a bid for the purchase of the Obligations. Section 8. The officers and representatives of the Issuer are hereby authorized and directed to take such action as may be necessary, after consultation with the Financial Advisor and Bond Counsel, to subscribe for the United States Treasury Securities to be purchased and deposited in the escrow for the Refunded Bonds and to provide for notice of redemption of the Refunded Bonds. Section 9. This Resolution shall be in full force and effect from and after its adoption. ADOPTED by the governing body on June 11,2012. (SEAL) ATTEST: (Signature Page to Sale Resolution) To: [Purchaser Name) [Purchaser City, State) [Purchaser Name] [Purchaser City, State] [Purchaser Name] [Purchaser City, State] EXHIBITA CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT June 11,2012 Re: Approximately $, _ -=-_ General Obligation Internal Improvement Bonds, Series 2012-A, $ General Obligation Refunding Bonds, Series 2012-8 and $ General Obligation Temporary Notes, Series 2012-1 The undersigneds are the duly acting Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), and are authorized to deliver this Certificate to the addressees (the "Purchasers") on behalf of the Issuer. The Issuer has heretofore caused to be delivered to the Purchasers copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced bonds and notes (the "Obligations"). For the purpose of enabling the Purchasers to comply with the requirements of Rule ISc2-12(bXI) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: ___________________ _ Title: Mayor By: ~~---------------Title: Clerk NOTICE OF SALE CITY OF SALINA, KANSAS $1,485,000' GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 $2,365,000 + GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,760,000' GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B (GENERAL OBLIGATION BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Written and electronic (as explained below) bids for the purchase of the above-referenced notes (the "Notes") and bonds (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the undersigned Clerk of the Issuer at the address hereinafter set forth in the case of written bids, and via PARITY® in the case of electronic bids, on JULY 9, 2012 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2012-A Bonds Series 2012-B Bonds Series 2012-1 Notes SUBMITTAL HOUR (Central Davlight Time) 1:00 p.m. 1:00 p.m. 2:00 p.m. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bldder(s) (the "Successful Bidders") will be acted upon by the governing body at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated July 15,2012 (the "Dated Date"), and will become due on August 1,2013. The Notes will bear interest from the Dated Date at rates to be detennined when the Notes are sold as hereinafter provided, which interest will be payable at maturity. Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas • Preliminary; subject to change as provided in "Adjustment ofIssue Size," herein. (the "Paying Agent" and "Note Registrar"). The principal of each Note and the interest thereon will be payable at maturity to the owners thereof whose names are on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and sun'ender at the principal office of the Paying Agent. Note Registration. The Notes will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas. The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Book-Entry-Only System. The Notes shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Notes. During the tenn of the Notes, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Notes to DTC or its nominee as the Registered Owner of the Notes, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Notes to is participants who shall be responsible for transmitting payments to beneficial owners of the Notes in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC detennines not to continue to act as securities depository for the Notes, or (b) the Issuer detennines that continuation of the book-entry-only form of evidence and transfer of ownership of the Notes would adversely affect the interests of the beneficial owners of the Notes, the Issuer will discontinue the book-entry-only fonn of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Notes in the forn1 of fully registered certificates. Reference is made to the Prehminary Official Statement for further infonnation regarding the book-entry-only system of registration of the Notes and DTC. Redemption of Notes Prior to Maturity. The Notes are not subject to redemption prior to maturity. Authority, Purpose and Security. The Notes are being issued pursuant to K.S.A. 10-123 and K.S.A. 12-685 et seq., as amended, and a resolution adopted by the governing body of the Issuer (the "Note Resolution") for the purpose of paying a portion of the cost of certain street improvements (the "Improvements"). The Notes shall be general obligations of the Issuer payable as to both principal and interest from the proceeds of general obligation bonds of the Issuer, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible propeny, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Series 2012-A Bonds will be dated July 15,2012 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: 2 Year Principa! Amount Year Principa! Amount 2013 $130,000 2021 $160,000 2014 140,000 2022 160,000 2015 145,000 2023 165,000 .2016 150,000 2024 170,000 2017 150,000 2025 175,000 2018 155,000 2026 175,000 2019 155,000 2027 180,000 2020 155,000 The Series 2012-B Bonds will be dated the Dated Date, and will become due in principal installments on October 1 in the years as follows: Principa! Principa! Year Amount Year Amount 2013 $370,000 2017 $485,000 2014 935,000 2018 470,000 2015 625,000 2019 235,000 2016 460,000 2020 180,000 The Bonds will bear interest from the Dated Date at rates to be detennined when the Bonds are sold as hereinafter provided, which interest will be payable semIannually on April 1 and October 1 in each year, beginning on April 1, 2013 (the "Interest Payment Dates"). Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner: or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Bond Registration. The Bonds will be regIstered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Owners. Book-Entry-Only System. The Bonds will initially be issued exclusively in "book entry" fonn and shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Bonds. During the tenn of the Bonds, so * Preliminary; subject to change as provided in "Adjustment ofIssue Size," herein. 3 long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Bonds to DTC or its nominee as the Registered Owner of the Bonds, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Bonds to its participants who shall be responsible for transmitting payments to beneficial owners of the Bonds in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Bonds, or (b) the Issuer detennines that continuation of the book-entry-only form of evidence and transfer of ownership of the Bonds would adversely affect the interests of the beneficial owners of the Bonds, the Issuer will discontinue the book-entry-only fonn of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the fonn of fully registered certificates. Reference is made to . the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and DTC. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose of redemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, if less than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October I in the years 2020, and thereafter, will be subject to redemption and payment prior to maturity on' October 1. 2019, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be detennined by the Issuer in such equitable manner as it may detennine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Series 2012-A Bonds or the Series 20l2-B Bonds scheduled to mature in consecutive years issued as tenn bonds (the "Tenn Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedules of serial maturities set forth above. subject to the following conditions: (a) not less than all Series 2012-A Bonds or Series 2012-B Bonds of the same serial maturity shall be converted to Tem1 Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completmg the applicable information on PARITy(R'. Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar and the Successful Bidder. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the date fixed for redemption. All notices of redemption shall state the date of redemption, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so calied for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by Kansas law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for 4 redemption and payment as aforesaid, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security. The Se17es 2012-A Bonds. The Series 2012-A Bonds are being issued pursuant to K.S.A. 12-6aOl et seq., as amended, and an ordinance and a resolution adopted by the governing body of the Issuer (collectively the "Series 2012-A Bond Resolution") for the purpose of paying a portion of the cost of certain street, water and sewer improvements (the "Improvements"). The Series 2012-A Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of said Improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. The Series 2012-B Bonds. The Bonds are being issued pursuant to K.S.A. 10-427, as amended, and an ordinance and a resolution adopted by the governing body of the Issuer (collectively the "Series 2012-B Bond Resofution") for the purpose of refunding certain outstanding bonds of the Issuer. The Series 2012-B Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of said Improvements, and ifnot so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE NOTES AND THE BONDS Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Obligations, and the principal amount of any maturity, depending on the purchase price and interest rates bid and the offering prices specified by the Successful Bidder(s). Such adjustments may be made by the Issuer in order to properly size the Obligations based on the required funding needs as well as purchase price and interest rates bid. The Successful Bidder may not withdraw its bid or change the interest rates bid as a result of any changes made to the principal amount of the Obligations or principal of any maturity as described herein, provided however that the total principal amount of each series of Obligations will not be changed by more than 15% within consent of the Successful Bidder( s). If there is an increase or decrease in the final aggregate principal amount of the Obligations or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder by means of telephone or facsimile transmission, subsequently confinned in writing, no later than 4:00 p.m., central time, on the Sale Date. The net production as a percentage of the principal amount o(the Obligations generated from the bids(s) of the Successful Bidder(s) will not be decreased as a result of any change in the total principal amount of the Obligations. Submission of Bids. Written bids must be made on forn1s which may be procured from the Clerk or the Financial Advisor and shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2012-1," "Proposal for General Obligation Internal Improvement Bonds, Series 20l2-A," or "Proposal for General Obligation Internal Improvement Bonds, Series 2012-B," as applicable. Written bids submitted by facsimile should not be preceded by a cover sheet and should be sent only once to (785)309-5738. Confinnation of receipt of facsimile bids may be made by contacting the Financial Advisor at the number listed below. Electronic bids via PARITy'R) must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. If 5 provisions of this Notice of Sale conflict with those of PARITYC!<), this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date accompanied by the Deposit (as hereinafter defined), which may be submitted separately, provided such Deposit is received by the Issuer prior to the Submittal Hour on the Sale Date. The Issuer shall not be responsible for any failure, misdirection or error in the means of transmission selected by any bidder. PARITY®. Information about the electronic bidding services ofPARITy(R) may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023. Conditions of Bids. Bids shall be submitted separately for each series of Obligations. Proposals will be received on the Obligations bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: For each series of Bonds: The same interest rate shall apply to all Bonds of the same maturity year. Each interest rate specified shall be a multiple of 118 or 1120 of 1 %. No interest rate may exceed a rate equal to the daily yield for 1 O-year treasury bonds published by The Bond Buyer in New York, New York, on the Monday next preceding the day of which the Bonds are sold, plus 6%. The difference between the highest rate specified and the lowest rate specified for the Bonds cannot exceed 3.0%. No bid of less than the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered and no supplemental interest payments will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Obligations on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. For the Notes: The same interest rate shall apply to all Notes. Each interest rate specified shall be a multiple of 11100 of 1 %. No interest rate may exceed a rate equal to the daily yield for 10-year treasury bonds published by The Bond Buyer in New York, New York, on the Monday next preceding the day of which the Notes are sold, plus 6%. No bid of less than 99.25% of the principal amount of the Notes and accrued interest thereon to the date of delivery will be considered and no supplemental interest payments will be considered. Each bid for the Notes must specify the total interest cost to the Issuer during the term of the applicable series of Notes on the basis of such bid, the discount or premium, if any, offered by the bidder, and the net interest cost to the Issuer on the basis of such bid. Each bid for the Notes must also specify the average annual net interest rate to the Issuer on the basis of such bid. For all Obligations: Each bidder shall certify to the Issuer the correctness of the infonnation contained on the Official Bid Fonn; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded any series of the Obligations, it will provide the certification as to initial offering prices desclibed under the caption "Certification as to Offering Price" in this Notice. Good Faith Deposit. Each bid shall be accompanied by a good faith deposit (the "Deposit") as follows: For the Notes: A good faith deposit will not be required for the Notes. For the Bonds: Each bid for a series of the Bonds shall be accompanied by a Deposit payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the bidder to comply with the terms of its bid. The amount of the Deposit for each series of the Bonds shall be as follows: $47,300.00 for the Series 2012-A Bonds and $75,200.00 for the Series 2012-B Bonds. The Deposit, which must be received by the Issuer prior to the Submittal Hour, may be submitted in any of the following forms: 6 (a) Certified or cashier's check drawn on a bank located in the United States of America; (b) financial surety bond as hereinafter described (the "Surety Bond"); or (c) wire transfer in Federal Reserve funds, immediately available for use by the Issuer (wire transfer information may be obtained from the Financial Advisor at the addresses set forth below). Contemporaneously with the submission of a wire transfer Deposit, such bidder shall send an email to the Issuer and the Financial Advisor at the email address set forth below, including the following infonnation: (a) notification that a wire transfer has been made; (b) the amount of the wire transfer; and (c) return wire transfer instructions in the event such bid is unsuccessful. All Surety Bonds must be from an insurance or surety company rated at least "AA-" by Standard and Poor's Ratings Services, a division of The McGraw Hill Companies, Inc., or "Aa3" by Moody's Investors Service and licensed to issue such a surety bond in the State. The Surety Bond must identify each bidder whose deposit is guaranteed by such Surety Bond. Good Faith checks submitted by unsuccessful bidders will be returned; wire transfer Deposits submitted by unsuccessful bidders will not be accepted or shall be returned in the same manner received on the next business day following the Sale Date. The Issuer reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. If the sale of the Obligations is awarded to a bidder utilizing a Surety Bond, the Successful Bidder is required to submit to the Issuer a cashier's or certified check or wire transfer of immediately available federal funds to such financial institution requested by the Issuer, not later than 2:00 p.m., Central Time on the next business day following the Sale Date. If such funds are not received by such time, the Surety Bond may be drawn on by the Issuer to satisfy the Deposit requirement. No interest on the Deposit will be paid by the Issuer. If a bid is accepted, the Deposit, or the proceeds thereof, will be held by the Issuer until the Successful Bidder has complied with all of the tenns and conditions of this Notice at which time the amount of said Deposit shall be retumed to the Successful Bidder or deducted from the purchase price at the option of the Issuer. If a bid is accepted but the Issuer fails to deliver the Obligations to the Successful Bidder in accordance with the tenns and conditions of this Notice, said Deposit, or the proceeds thereof, will be retumed to the Successful Bidder. If a bid is accepted but the bidder defaults in the performance of any of the tenns and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. For each series of Bonds: The award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30-day months. Bidders are requested to supply an estimate of the TIC for the Bonds on the Official Bid Fonn, computed as specified herein on the basis of their respective bids, which shall be considered as infonnative only and not binding on either the bidder or the Issuer. If there is any discrepancy between the true interest cost specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the governing body of the Issuer will detennine which bid, if any, will be accepted, and its detennination is final. 7 For the Notes: The award of the Notes will be made on the basis of the lowest net interest cost (expressed in dollars), which will be detennined by subtracting the amount of the premium bid, if any, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the net interest cost specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest net interest cost are received, the governing body of the Issuer will detennine which bid, if any, will be accepted, and its detennination is final. For all Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will be returned to the bidder. Any disputes arising hereunder shall be governed by the laws of Kansas, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within Kansas with regard to such dispute. The Issuer's acceptance, including electronic acceptance through PARITY®, of the Successful Bidder's proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a contract between the Issuer and the Successful Bidder for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32") and a bond purchase agreement for purposes of the laws of the State. Bond Ratings. The Issuer has applied to Moody's Investors Service for a rating on the Obligations herein offered for sale. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations. If the Obligations qualify for municipal bond insurance, and any bidder desires to purchase such policy, such indication and the name of the desired insurer must be set forth on the bidder's Official Bid Fonn. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest bid to the Issuer. All costs associated with the issuance of such policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder. Failure of the municipal bond insurer to issue the policy after the award of the Obligations shall not constitute cause for failure or refusal by the Successful Bidder to accept delivery of the Obligations. CUSIP Numbers. CUSIP identification numbers wiJJ be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the tenns ofthis Notice. All expenses in relation to the assignment and printing of CUSIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about JULY 26, 2012 (the "Closing Date"), to DTC for the account of the Successful Bidder. The Successful Bidder will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name ofDTC. 8 Reoffering Prices. To provide the Issuer with infonnation necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), the Successful Bidder will be required to complete, execute and deliver to the Issuer prior to the delivery of the Obligations, a written certification (the "Issue Price Certificate") containing the following: (a) the initial offering price and interest rate for each maturity of the Obligations; (b) that all of the Obligations were offered to the public in a bona fide public offering at the initial offering prices on the Sale Date; and (c) on the Sale Date the Successful Bidder reasonably expected that at least 10% of each maturity of the Obligations would be sold to the "public" at prices not higher than the initial offering prices. For purposes of the preceding sentence "public" means persons other than bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Obligations for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Obligations for sale to the public. Subsequent to the Submittal HOUl; such initial offering pl7ces to the public shall be provided to the Issuer or the Financial Advisor not more than 20 minutes after requested by the Issuer or the Financial Advisor. At the request of the Issuer, the Successful Bidder will provide infonnation explaining the factual basis for the Successful Bidder's Issue Price Certificate. This agreement by the Successful Bidder to provide such infonnation will continue to apply after the Closing Time if: (a) the Issuer requests the infonnation in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities arid Exchange Commission (the "SEC") or (b) the infonnation is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated June 11, 2012, "deemed final" by the Issuer except for the omission of certain infonnation as provided in the Rule, copies of which may be obtained from the Clerk or from the Financial Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder, without cost, within seven business days of the acceptance of the Successful Bidder's proposal, with a sufficient number of copies thereof, which may be in electronic fonnat, in order for the Successful Bi.dder to comply with the requirements of the Rule and Rule G-32. Additional copies may be ordered by the Successful Bidder at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolutions. the Issuer has covenanted to provide annually certain financial infonnation and operating data and other infonnation neceSS31)' to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner ofthe Obligations. For fmiher infonnation, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. 9 Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2011 is as follows: Equalized Assessed Valuation of Taxable Tangible Property ............................................................ . $402,354,576 Tangible Valuation of Motor Vehicles ................................................. . 47,406,062 Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations ................................. $449,760,638 The total general obligation indebtedness of the Issuer as of the Closing Date, including the Obligations being sold, is $64,865,000. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excluded from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and Kansas income tax matters relating to the interest on the Obligations. Additional Information. Additional information regarding the Obligations may be obtained from the undersigned, or from the Financial Advisor, at the addresses set forth below: DATED: June 11, 2012. CITY OF SALINA, KANSAS By Lieu Ann Elsey, Clerk Written and Facsimile Bid and Good Faith Deposit Delivery Address: 300 West Ash Salina, Kansas 67402 Attn: Rod Franz, Finance Director Phone No.: (785)309-5735 Fax No.: (785)309-5738 Email: rod.franz@salina.org Financial Advisor: George K. Baum & Company 4801 Main Street, Suite 500 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816)474-1100 Email: arteberry@gkbaum.co111 10 TO: OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES Lieu Ann Elsey, Clerk City of Salina, Kansas July 9, 2012 For $1,485,000' principal amount of General Obligation Temporary Notes, Series 2012-1, of the City of Salina, Kansas, to be dated July 15, 2012. as described 111 your Notice of Sale dated June 11, 2012, said Notes to bear interest as follows: Maturity August 1 2013 Principal Amount' $1,485,000 Interest Rate ---_% the undersigned will pay the purchase price for the Notes set forth below, plus accrued interest to the date of delivery. Principal Amount .................................................................................................................................... $1,485,000.00 Less Discount (not to exceed 0.75%) ................................................................................. -_________ _ Plus Premium (if any) ................................ ......................................................................... _________ _ Total Purchase Price ............................................................................................ ........... $ ________ _ Total interest cost to maturity at the rate(s) specified ..................................................... $ _________ _ Net interest cost ............................... ................................................................................ $ _________ _ Average annual net interest rate ....................................................................... .................................... ______ % TIm proposal is subject to all terms and conditions contained in saId Notice of Note Sale, and if the undersigned is the Successful BIdder, the undersIgned will comply wIth all of the provislOns contained IJ1 said Notice. The acceptance of thIS proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complYll1g with Rule 15c2-12 of the Securities and Exchange Commission. Submitted by: (LIST ACCOUNT MEMBERS ON REVERSE) By: ______________________ _ Telephone No. ACCEPTANCE Pursuant to actlOn duly taken by the Govemll1g Body of the City of SalIna, Kansas, the above proposal IS hereby accepted on July 9, 2012. Attest: Clerk Mayor NOTE. No additIons or alteratIons m the above proposal forn1 shall be made. and any erasures may cause rejectIOn of any bId. Sealed bIds may be filed with the Clerk Lieu Ann Elsey, 300 West Ash. SalIna, Kansas 67402, faCSImile bIds may be filed WIth the Clerk, Fax No. (785)309-5738 or electronic bids may be submItted via PARITY" . at or prior to 2:00 p.m .. Central TIme, on July 9, 2012. Any bId received after such tIme will not be accepted or shall be returned to the bIdder. Preliminary; subject to change as provided in Notice of Sale. TO: Lieu Ann Elsey, Clerk City of Sa 1m a, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS July 9,2012 For $2.365,000' principal amount of General Obligation Internal Improvement Bonds, Series 2012-A. of the CIty of Salina, Kansas, to be dated July 15.2012, as described in the Notice of Sale dated June 11,2012. said Bonds to bear interest as follows: Stated Annua! Stated Annua! Maturity Principal Rate of Maturity Principa! Rate of October I Amount Interest October I Amount Interest 2013 $130,000 % 2021 $160,000 % 2014 140.000 % 2022 160,000 % 2015 145,000 % 2023 165,000 % 2016 150,000 % 2024 170,000 % 2017 150.000 ~o 2025 175,000 % 2018 155,000 % 2026 175.000 % 2019 155.000 % 2027 180,000 % 2020 155.000 t}() the undersigned will pay the purchase price for the Bonds set forth below, plus accrued interest to the date of delIvery. o o Principal Amount ........................................................................................................................................................ $2,365,000.00 Plus PremIum (If any) ............................................................................................................................. _________ _ Total Purchase Price .................. ......................................................................................................... $. _________ _ Total interest cost to matunty at the rates speCIfied ........................ .................................................... $ ________ _ Net mterest cost (adJusted for PremIUm) ............................................................................................. $ ________ _ True lnterest Cost ................................................................................................................................................. _____ 0;0 The Bidder elects to purchase Mumclpal Bond Insurance frol11" [AssuredJ [AGMJ [. _______ J. Circle one or complete blank. The BIdder elects to have the follOWIng Tenn Bonds: Maturity Date October I, October 1. Years _____ to ____ _ Amount* $,-----__ ~-to--~-$ ____ _ *subJect to mandatory redemptIOn reqUIrements m the amounts and at the tnnes shown above. This proposal IS subJect to all tenns and conditIOns contamed in SaId Notice of Sale. and If the underSIgned IS the Successful Bidder, the underSIgned will comply WIth all of the prOVISIOns contaIned In saId NotIce. A cashIer's or certIfied check, a wIre transfer or a qualIfied financial surety bond in the amount of $47.300.00 payable to the order of the Issuer. accompames this proposal as an eVIdence of good faith. The acceptance of thIs proposal by the Issuer shall constItute a contract between the Issuer and the Successful BIdder for purposes of complymg WIth Rule 15c2-12 of the Securities and Exchange CommIssIon J and a bond purchase agreement f()r purposes of the laws of the State of Kansas. Submitted by: ______________ _ (LIST ACCOUNT MEMBERS ON REVERSE) By: Telephone No. ACCEPTANCE Pursuant to actIOn duly taken by the Governmg Body of the CIty of SalIna, Kansas, the above proposal IS hereby accepted on July 9. 2012. Attest. Clerk Mayor NOTE: No additIons or alteratIons In the above proposal fonn shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk. Lieu Ann Elsey, 300 West Ash, Salina, Kansas 67402, faCSImile bids may be filed with the Clerk, Fax No. (785)309-5738 or electroDIc bids may be submItted via PAR/TIft,·, at or prIor to 1 :00 p.m., Central TIme, on July 9, 2012. Any bid received after such time wIll not be accepted or shall be returned to the bidder. Preliminary; subject to change as provided in Notice of Sale. TO. LIeu Ann Elsey, Clerk City of Sa 1m a, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS July 9. 2012 For $3,760.000" pnncipal amount of General Obligation Refunding Bonds, Series 2012-B, of the City of Sa 1m a, Kansas, to be dated July 15,2012, as described in the NotIce of Bond Sale dated June 11, 2012, said Bonds to bear interest as follows: Stated Annual Stated Annual Maturit~ Principal Rate of Maturity Principal Rate of October 1 Amount Interest October 1 Amount Interest 2013 $370,000 % 2017 $485,000 % 2014 935,000 % 2018 470,000 % 2015 625,000 % 2019 235,000 % 2016 460,000 % 2020 180,000 % the undersIgned wIll pay the purchase pnce for the Bonds set forth below, plus accrued mterest to the date of delivery. o o Pnnclpal Amount .............................................................................................................................. .......................... $3,760,000.00 Plus PremIUm (If any) ............................................................................................................................. _________ _ Total Purchase Pnce ......................................................................................................................... $ ________ _ Total interest cost to matunty at the rates specified ............................................................................ $ ________ _ Net ll1terest cost (adJusted for Premium) ............................ ................................................................. $ ________ _ True Interest Cost ..................................................................................................... ............................................. ______ % The BIdder elects to purchase MUnICIpal Bond Insurance from: [Assured] [AGM] [ _______ ]. Circle one or complete blank. The BIdder elects to have the following Tenn Bonds: Maturity Date October I, October I, Years ____ to ___ _ Amount* $ ___ _ ____ w _ ~-$ ____ __ *subJect to mandatory redemptlOn reqUIrements m the amounts and at the lImes shown above. ThIS proposal IS subject to all terms and condItIons contall1ed in said Notice of Bond Sale. and if the undersIgned IS the Successful BIdder, the undersIgned will comply with all of the proVIsions contained m said NotIce, A cashIer's or certIfied check, a wire transfer or a qualified finanCIal surety bond In the amount of $75,200.00 payable to the order of the Issuer, accompanIes tIllS proposal as an eVIdence of good faIth. The acceptance of thIS proposal by the Issuer shall constItute a contract between the Issuer and the Successful Bidder for purposes of complYll1g WIth Rule 15c2-12 of the SecuntJes and Exchange CommissIon and a bond purchase agreement for purposes of the laws of the State of Kansas. SubmItted by: (LIST ACCOUNT MEMBERS ON REVERSE) By: Telephone No. ACCEPTANCE Pursuant 10 actIon duly taken by the Govemll1g Body of the City of Salma. Kansas. the above proposal IS hereby accepted on July 9, 20 I 2. Attest: Clerk Mayor NOTE' No addltlon5 or alteratIons m the above proposal fonn shall be made. and any erasures may cause rejection of any bId. Sealed bids may_be filed WIth the Clerk, LIeU Ann Elsey, 300 West Ash. Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785)309-5738 or electronic bids may be submItted via PARITY@, at or prior to I :00 p.m., Central Time, on July 9, 2012. Any bid received after such tIme will not be accepted or shall be retumed to the bIdder. PrelIminary; subject to change as provided in Notice of Sale. PRELIMINARY OFFIClAL STATEMENT DATED JUNE 20, 2011 In the opinion o.fGilmore & Bell, P.e., Kansas City, Missouri, Bond Counsel, under existing law and assuming continued compliance with certain requirements o.fthe Internal Revenue Code of 1986, as amended (the "Code''), the interest 011 the Notes and Bonds [(including any original issue discount properly allocable to an owner thereoj)] is (a) excluded from gross income for federal income tax purposes and (b) not an item of tax preference for purposes o.f the federal alte17lative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current ea17lings for the purpose of computing the alternative minimum tax imposed on certain cOlporations. The interest on the Notes and Bonds is exempt {i-om income taxation by the State of Kansas. The Notes and Bonds are "qualified tax-exempt obligations" within the meaning of Code Section 265 (b)(3). See TAX MATTERS -"Opinion of Bond Counsel" herein. New Issues Book-Entry Only Bank Qualified Moody's Ratings: CITY OF SALINA, KANSAS $1,485,000 (subject to change) GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 BondsNotes-$2,365,000 $3,760,000 "Applied For" "Applied For" (subject to change) GENERAL OBLiGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A (subject to change) GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Dated: July 15, 2012 Due: As Shown Herein The Series 2012-1 Notes (the "Notes") will be Issued as fully registered notes in the denomination of $5,000 or any integral multiple thereof. The Notes shall be initIally registered in the name of Cede & Co., as nominee of The Depository Trust Company (,'DTe'''), New York, New York, to which payment of principal and interest will be made. Individual purchases of Notes will be made in book-entry form. Purchasers will not receive certificates representing their interest in the Notes purchased. Interest on the Bonds will be payable at maturity. Pnncipal and interest on the Notes will be payable by check, draft, or wire transfer from the Treasurer of the State of Kansas (the "Note Paymg Agent"). The Notes are not subject to redemption prior to maturity. The Series 2012-A Bonds (the "Series 2012-A Bonds") and the Series 2012-B Bonds (the "Series 2012-B Bonds" and, collectively with the Series 2012-A Bonds, the "Bonds") will be issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds shall be initially registered in the name of Cede & Co" as nominee of DTe to which payment of principal and interest will be made. Individual purchases of Bonds will be made in bookentry only form. Purchasers will not receive certificates representing their interest in the Bonds purchased. Principal on the Bonds will be payable on each October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1. 2013. The principal of and interest on the Bonds will be payable by check. draft, or wire transfer from the Treasurer of the State of Kansas (the "Bond Paying Agent"). The Bonds are subject to redemption at the option of the City as further described herein. MATURITY SCHEDULES (see inside front cover) Tbe full faith, credIt, and resources of the City are irrevocably pledged for the prompt: payment of the principal and interest on the Notes and Bonds as tbe same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" berein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of Bond Counsel. It is expected that the Notes and Bonds will be available for delivery through the facilities ofDTC on or about July 26,2012. BIDS FOR THE PURCHASE OF THE NOTES AND BONDS WILL BE RECEIVED PURSUANT TO THE NOTICE OF SALE: The Series 2012-A Bonds: On or before 1 :00 p.m., Central Daylight Time The Series 2012-B Bonds: On or before 1:00 p.m., Central Daylight Time The Notes: On or before 2:00 p.m., Central Daylight Time On Monday, July 9,2012 THIS COVER PAGE CONTAINS INfORMATION FOR QUICK REFERENCE ONLY IT IS NOT A SUMMARY OF THE ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION MATURITY SCHEDULES $1,485,000 (subject to change) GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 Maturity 08-01-13 Amount $1,485.000 The Notes are not subject to redemption prior to maturity. $2,365,000 (subject to change) Base CUSIP(I) 794743 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A Maturitv 10-01-13 10-01-14 10-01-15 10-01-16 10-01-17 10-01-18 10-01-19 10-01-20* 10-01-21 * 10-01-22* 10-01-23" 10-01-24* 10-01-25* 10-01-26* 10-01-27* Amount $130,000 140,000 145,000 150,000 150,000 155.000 155,000 155,000 160.000 160,000 165,000 170,000 175,000 175,000 180,000 $3,760,000 (subject to change) Base CUSIP(I) 794743 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Maturity 10-01-13 10-01-14 10-01-15 10-01-16 10-01-17 10-01-18 10-01-19 10-01-20* Amount $370.000 935,000 625,000 460,000 485,000 470,000 235,000 180,000 Base CUSIP(I) 121m *The Bonds maturing on or after October 1,2020, will be subject to redemption prior to maturity at the option of the City on October 1, 2019, and thereafter, in whole or in part on any date, in principal amounts of $5,000 or any integral multiple thereof, at a price equal to 100% of the principal amount of Bonds to be redeemed plus accrued interest to the date fixed for redemption. [The Tenn Bonds are also subject to mandatory redemption.] See THE BONDS -"Redemption Provisions" herein. l/)eUSlP numbers have been assigned to this Issue bv Standard & Poor's CUSlP Service Bureau. a divisIOn of the McGraw-Hili Companzes. Inc. and are mcluded solelv (or the co/Zvel1lel1ce o( the Owners of the Notes and Bonds Neither the CUl' nor the Underwriters shall be responsible for the selectIOn or correctness of the eUSfP number< set forth above CITY OF SALINA, KANSAS 300 West Ash City/County Building -Room 206 P. O. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Norman Jennings, Mayor Barb Shirley, Vice Mayor Samantha Angell, Commissioner Kaye Crawford, Commissioner Aaron HousehoJter, CommissJOner CITY STAFF Jason Gage, City Manager Mike Schrage, Deputy City Manager Rodney Franz, Director of Finance and Administration Lieu Ann Elsey, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas CIty. Missoun FINANCIAL ADVISOR George K. Baum & Company Kansas City, Missouri No person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Bonds to be issued, other than those contained in this Official Statement, and if given or made, such other information or representations not so authorized must not be relied upon as having been given or authorized by the City or the Underwriters. This Official Statement is not to be used in connection with an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such infonnation is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summanes and are qualified in their entirety by reference to such laws and documents. Information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that the information contained herein has remained unchanged since the respective dates as of which such information is given. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT.................................................................................................... 1 THE NOTES ............................... ...................................................................................................... 2 THE BONDS....................................................................... ............................................................... 5 THE DEPOSITORY TRUST COMPANy........................................................................................ 9 THE FINANCING PLAN .................................................................................................................. 11 SOURCES AND USES OF FUN'DS ................................. ............................................. ............. ....... 12 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................... 13 LEGAL MATTERS ........................................................................................................................... 14 TAX MATTERS ............................................................ ................................................................... 15 RATINGS......................................................................................................................... ................. 16 FINANCIAL ADVISOR.................................................................................................................... 16 UNDERWRITING ............................ ................................................................................................. 17 ABSENCE OF MATERIAL LITIGATION ................................................................... ................... 17 CONTINUING DISCLOSURE .............................. ........................................................................... 17 CERTIFICATION OF OFFICIAL STATEMENT ............................................................................ 18 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITy............................................. ..................................... A-J GENERAL INFORMATION CONCERNING THE CITy......................................................... A-2 ECONOMIC INFORMATION CONCERNING THE CITy................ ....................................... A-6 DEBT SUMMARY OF THE CITY .............................................................................................. A-8 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................... A-Jl APPENDIX B: CONTINUING DISCLOSURE INSTRUCTIONS APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31,2011 General CITY OF SALINA, KANSAS $1,485,000 (subject to change) GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 $2,365,000 (subject to change) GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,760,000 (subject to change) GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "City"), and the issuance of its $1,485,000 (subject to change) General Obligation Temporary Notes, Series 2012-1 (the "Notes"), its $2,365,000 (subject to change) General Obligation Internal Improvement Bonds, Series 2012-A (the "Series 2012-A Bonds"), and its $3,760,000 (subject to change) General Obligation Refundmg Bonds, Series 2012-B (the "Senes 2012-B Bonds" and collectively with the Series 2012-A Bonds, the "Bonds"), all dated July 15,2012. The Notes and the Bonds are being issued to provide funds to finance certain water. sewer. and street improvements withm the City and to refund portions of three outstanding bond issues of the City. See THE FINANCING PLAN herem. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's financial advisor. George K. Baum & Company, Kansas City, Missouri (the "Financial Advisor"). Such information ha~ been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to mdicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.c., Kansas City, Missouri, Bond Counsel, has not assisted in the preparation of this Official Statement. except for the sections titled INTRODUCTORY STATEMENT, THE NOTES. THE BONDS, LEGAL MATTERS. TAX MATTERS, CONTINUING DISCLOSURE, and APPENDIX B and. accordingly. expresses no opinion as to the accuracy or sufficiency of any other information contained herein Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the resolutions and ordinances of the governing body of the City authorizing the Bonds (the "Bond Ordinances"), as applicable. Copies of the Note Resolution and the Bond Ordinances are available upon request to the City, the Financial Advisor, or Bond Counsel. Additional Information Additional information regarding the City, the Notes. or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. THE NOTES Description The Notes shall consist of fully registered book-entry-only Notes in the denomination of $5,000 or any integral multiples thereof (the "Authorized Denomination") and shall be numbered in such manner as the Note RegIstrar shall determine. All of the Notes shall be dated July 15,2012, shall become due in the amounts on the Stated Maturities, with option of prior redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Notes shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions The Notes are not subject to redemption and payment PrIor to maturity. Authority The Notes are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq. (mcJuding particularly K.S.A. 10-123) and K.S.A. 12-685 et seq., all as amended, and a resolution adopted by the City on ,2012, authorizing the issuance of the Notes (the "Note Resolution"). Securitv The Notes shall be general obligations of the City, payable as to both principal and interest from the proceeds of general obligation bonds of the issuer. and If not so paid, from ad valorem taxes which may be levied without limitatIon as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appomted by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note RegIstrar" and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and mterest on the Notes and note regIstrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when Issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note RegIstrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. 2 In all cases in which the pnvilege of transferring or exchangmg Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required (a) to register the transfer or exchange of any Note that has been called for redemption after notice of such redemption has been mailed by the Note Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be reqUIred by each of them, then, m the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City'S request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and plincipal amount. If any such mutilated, destroyed, lost or stolen Note has become or IS about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the plincipal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note. who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under thIS Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall. subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City. and the Owner thereof shall be entitled to look only to the City for payment. and then only to the extent of the amount so repaid to it by the Note Paymg Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and plivate debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Matulity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by 3 the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES -Book-Entry Notes; Securities Depository." PaYments Due on Saturdays, Sundays and Holidavs In any case where a Note Payment Date is not a Business Day, then payment of principal. Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day WIth the same force and effect as if made on such Note Payment Date, and no interest shall accrue-for the period after such Note Payment Date. Book-Entry Notes: Securities Depositorv The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes. the Securities Depository will make book-entry transfers among its PartIcipants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described m the followmg paragraphs. The City may decide, subject to the requirements of the Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the CIty determines (1) that the Securities Depository IS unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualIfied to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such detennination or 4 such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applIcable With respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities DepOSitory resigns, is unable to properly discharge its responsibilities, or IS no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delIvery of the Notes to the successor Securities Depository in appropriate denommations and form as provided in the Note Resolution. THE BONDS Description The Bonds shall consist of fully registered book-entry-only bonds in the denomination of $5,000 or any integral multiples thereof (the "Authorized Denomination") and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated July 15, 2012, shall become due in the amounts, on the Stated Matunties, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth 011 the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the baSIS of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner heremafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2020 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2019, and thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Mandatory Redemption-Series 2012 Bonds. The Series 2012-_ Bonds maturing (the "Term Bond") shall be su~iect to mandatory redemption and payment prior to their stated maturity pursuant to the mandatory redemption requirements hereinafter set forth. at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date. The City shall redeem on October 1 in each year the following principal amounts of such Term Bond: 5 *Final maturity of Term Bond] Principal Amount Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may detennine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized DenominatIOn, the Owner or the Owner's duly authorized agent shaJl forthwith present and surrender such Bond to the Bond RegIstrar: (l) for payment of the Redemption Pnce and interest to the Redemption Date of such minimum Authonzed Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond' Paying Agent for payment and exchange as aforesaid. such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the mmimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give WrItten notice of its intention to call and pay said Bonds to the State Treasurer and the Purchaser. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notlces shall be deposited in the Umted States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price: (c) if less than all Outstanding Bonds are to be redeemed. the identification (and. in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; Cd) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, whlch shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date. the City shall deposl! with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid. the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the RedemptIOn Pnce therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemptlon Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in tum, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant. or failure on the paJi of a nommee of a Beneficial Owner of a Bond (having been mailed notlce from the Bond Registrar. the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner ofthe Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Instructions. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptlons of municipal securities established by the State or the Securities and Exchange CommIssion. Failure to comply wlth such standards shall not affect or I11validate the redemption of allY 6 Bond. Authoritv The Series 2012-A Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq. and K.S.A. 12-6a01 et seq., all as amended, and an ordinance and resolution adopted by the City on , 2012, authorizing the issuance of the Series 2012-A Bonds (jointly referred to herein as the "Series 2012-A Bond 'ordinance"). The Series 2012-B Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas. including without limitation K.S.A. 10-101 et seq. and K.S.A. 10-427 et seq., aJl as amended, and an ordinance and resolution adopted by the City on , 2012, authorizing the issuance of the Series 2012-B Bonds (jointly referred to herein as the "Series 2012-B Bond Ordinance"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certam public improvements, and if not so paid. from ad valorem taxes which may be levied without limitatIOn as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limItation as to rate or amount upon all the taxable tangible property, real or personal, within the territorial limIts of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Designation of Bond Paving Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolutions. The CIty reserves the right to appomt a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of prinCIpal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transfelTed and exchanged only on the Bond RegIster as hereinafter proVided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denominatIon of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and WIth guarantee of signature satisfactory to the Bond Registrar. duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a COITect taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. 7 The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption·has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the paymem ofDefauIted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office ofthe Bond Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond IS regIstered at the close of business on the Special Record Date for the payment of such Defaulted Interest, whIch Special Record Date shall be fixed as heremafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to bemailed.byfirstclassmail.postageprepald.to each Owner of a Bond entitled to such notice not less than 10 days pnor to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entrv Bonds: Securities Depositorv The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during tbe term of the Bonds, tbe SecuritIes Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. 8 The City may decide, subject to the requirements of the Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives wntten notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such detennination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the Interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a detennination under (a)(1) or (a)(2) of this section, the City, with the consent of the Bond Registrar, may select a successor securities depository as hereinafter provided to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropliate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Notes and Bonds (collectively, the "Securities"). The Securities will be issued as fully registered securities registered in the name of Cede & Co. (DTe's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of such series of the Securities, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law; a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, 9 corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its PartiCIpants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") IS III turn to be recorded on the Direct and Indirect Participants' records. BenefiCIal Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receIve written confirmatIons providing details of the transaction, as well as pen odic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Secunties, except in the event that use of the book-entry system for the Securities is dIscontinued. To facilitate subsequent transfers. all SecuritIes depOSIted by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co .. or such other name as may be requested by an authorized representative of DTC. The depOSIt of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownershIp. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credIted. whIch mayor may not be the Beneficial Owners. The Direct and Indirect PartIcipants will remain responsible for keep1l1g account of their holdings on behalf oftheir customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to IndIrect I:'artlcipants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds with1l1 an issue are being redeemed, DTC's practice IS to determ1l1e by lot the amount of the interest of each Direct Participant in such Issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote WIth respect to Securities unless authorized by a Direct PartIcipant 111 accordance with DTC's M1\11 Procedures. Under its usual procedures, DTC' mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. 's consentmg or voting nghts to those Direct PartiCIpants to whose accounts Securities are credlted on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributIOns, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct PartICIpants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer, the Note Paying Agent, or the Bond Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Note Paying Agent, the Bond Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer, the Note Paying Agent or the Bond Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of 10 DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Note Paying Agent and the Bond Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Note Paying Agent and the Bond Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Note Paying Agent's or Bond Paying Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer, the Note Paying Agent or the Bond Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide construction period financing for improvements to a main trafficway in the City and to pay the costs assodated wIth the issuance ofthe Notes. The Series 2012-A Bond Projects Proceeds from the sale of the Series 20 12-A Bonds will be used to provide long term financing for certain utility and street improvements within a new commercial development within the City and to pay the costs associated with the issuance of the Series 2012-A Bonds. A portion of the cost of these improvements was originally financed by the issuance of the City'S Series 2011-1 General Obligation Temporary Notes, which will be retired with proceeds from the sale of the Series 2012-A Bonds and other available funds. The Series 2012-B Refunding Plan Proceeds from the sale of the SerIes 2012-B Bonds and other available funds will be used to refund the callable portions of three outstanding bond issues of the City: the General Obligation Internal Improvement Bonds. Series 2003-A; the General Obligation Internal Improvement Bonds, Series 2004-B; and the General Obligation Internal Improvement Bonds. Series 2005-A (collectively, the "Refunded Bonds"); and to pay the costs associated with the sale of the Series 2012-B Bonds. The repayment of the callable Series 2004-B Bonds is a current refunding. The repayment of the callable Series 2003-A and Series 2005-A Bonds is an advance refunding. According to the terms of the Refunding Plan, proceeds from the sale of the Series 2012-B Bonds and other available funds will be deposited into an irrevocable escrow account (the "Escrow Trust Account") which will proVIde funds to pay the interest due on the Refunded Bonds up to and including payments due on the Refunded Bonds' earliest optional redemption date and to redeem the principal of the Refunded Bonds on such date. All Refunded Bonds will be redeemed at their first optional redemption date. All Refunded Bonds will be called at a prIce equal to 100% of the par value thereof. without premium. The Refunding Plan is being undertaken in order to achieve interest cost savings. 11 The following details the Refunded Bonds: Principal Maturity Dates Refunded Amount Amount to be Redemption Bonds Outstanding to be Refunded Refunded Date 2003-A $1,765,000 $1,125,000 1 0-0 1-14 thru 1 0-01-1 8 10-01-13 2004-B 1,390,000 1.010,000 10-01-13 thru 10-01-19 10-01-12 2005-A 2,200,000 1,535,000 10-01-14 thru 10-01-20 10-01-13 Escrow Trust Agreement An Escrow Trust Account will be established for the Refunded Bonds pursuant to the terms of an Escrow Trust Agreement dated as of July 15, 2012, by and between the City and UMB National Bank of America, Wichita. Kansas (the "Escrow Trustee"). Proceeds from the Series 2012-B Bonds will be deposited in the Escrow Trust Account and used to acquire direct, non-callable obligations of the United States of America (the "Escrowed Securities"). The Escrowed Securities will mature at such times and in such amounts as necessary, when combined with cash balances in the Escrow Trust Account, to pay the principal of and interest on the Refunded Bonds as described in the preceding section. Mathematical Verification The mathematical accuracy of (a) the computations made by George K. Baum & Company on the adequacy of the maturing principal and mterest earned on the Escrowed Securities to be purchased with the proceeds from the proceeds of the Series 2012-B Bonds. together wlth uninvested funds to be held by the Escrow Trustee, in accordance with the Escrow Trust Agreement, to provide for the payment of the mterest on the Refunded Bonds up to and includmg their earliest optional redemption date, and to redeem the Refunded Bonds on such dates; and (b) the yield computations made by George K. Baum & Company supporting the conclusion by Bond Counsel that the Series 20 12-B Bonds are not "arbitrage bonds" within the meaning of SectlOn 148 of the Internal Revenue Code of 1986, will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas. SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan WIll be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Note and Bond Proceeds Other Available Funds Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Deposit to Escrow Fund Costs of Issuance Total Application of Funds Series 2012-1 Notes 12 Series 2012-A Bonds Series 2012-B Bonds RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE NOTES AND BONDS (COLLECTIVELY, THE "SECURITIES'J DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITER. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the oblIgatlOns created by the Securities. There is no assurance that there will not be any change in, interpretation of. or addition to such applicable laws, provisions and regulations which would have a matenal effect, eIther dIrectly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the SecuntIes, are subject to the following: the federal Bankruptcy Code and applIcable bankruptcy, insolvency, reorganization, moratorium. or sllTIilar laws relatmg to or affecting the enforcement of credItors' rights generally, now or hereafter in effect; usual equity principles which may limIt the specific enforcement under state law of ceI1am remedIes; the exercise by the United States of America of the powers delegated to it by the United States ConstitutlOn; and the reasonable and necessary exercise, m certam unusual situations, of the police power inherent in the State of Kansas and its governmental subdiviSIons in the interest of serving a legitImate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government. if initiated, could subject the owners of the Secunties to judicial discretion and interpretation of theIr rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of theIr rights. Taxation of Interest on the Securities An opinion of Bond Counsel WIll be obta111ed to the effect that mterest earned on the Securities is excludable from gross 111come for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulmgs and regulations under the Code; however, an application for a ruling has not been made and an opimon of counsel is not bmding upon the Internal Revenue SerVIce. There can be no assurance that the present proviSIons of the Code. or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendenng the interest earned on the Securities mc1udable m gross income for federal income tax purposes. The City has covenanted in the Bond and Note Resolutions and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply witl, the provisions of the Code. including those which reqUIre the City to take or omit to take certain actions after the issuance of the SecuritIes. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opmion of Bond Counsel described under TAX MATTERS assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel WIth respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. 13 No Additional Interest or Mandatorv Redemption upon Event of Taxability The Bond and Note Resolutions do not provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, the Bond and Note Resolutions do not provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes includable in gross income for Kansas income tax purposes. Suitabilitv of Investment The tax exempt feature of the Securities is more valuable to high tax bracket 111vestors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financIal condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price ofthe Securit1es. SecondalJI Market. There is no assurance that a secondary market will develop for the purchase and sale of the Secunties. Prices of securities traded in the secondary market, though. are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend mdefinitely secondary market trad111g in the Securities as a result of financial condition or market position of brokerdealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are m default as to princ1pal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposal On September 12. 2011, the President released a legislative proposal that would. among other things. subject interest on tax-exempt secunties (mcludmg the Secullt1es) to a federal income tax for taxpayers with 111comes above certain thresholds for tax years beginning after 2012. The proposal has not yet passed either of the two Houses of Congress and 1t is not possible to predict whether this proposal will be enacted into law. If enacted mto law, such a proposal could affect the value or marketability of tax-exempt securities (including the Securities). Prospective purchasers of the SecuritJes should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.c., Kansas City, Missouri, Bond Counsel, whose approving opinion accompanies the Notes and Bonds. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparat10n of the matters appearing 111 the sections of this Official Statement captioned INTRODUCTORY STATEMENT, THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, CONTINU1NG DISCLOSURE, and APPENDIX B. 14 TAX MATTERS General The following is a summary of the material federal and state income tax consequences of holding and disposing of the Notes and the Bonds (collectively referred to herein as the "Securities"). This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market at a premium or a discount. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date ofthe Securities: Federal Tax Exemption: The interest on the Securities [(including any original issue discount properly allocable to an owner thereof)] is excluded from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternatIve mimmum tax imposed on individuals and corporations, but IS taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on celiam corporations. Bank Qualification. The Securities are "qualified tax-exempt obligations" for purposes of Code i;i265(b) ), and in the case of certain financial institutions (within the meaning of Code § 265(b )(5», a deduction is allowed for 80% of that portion of such financial institutions' interest expense allocable to interest on the Securities. Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal mcome tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certall1 of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of Issuance of the Securities. Bond Counsel is expressing no opinion regarding other federaL state or local tax consequences arising with respect to the Securities. Other Tax Consequences [ Original Issue Discount. For Federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a Security over its Issue price. The issue price of a Security is the first price at which a substantial amount of the Securities of that maturity have been sold (ignoring sales to bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers). Under Code § 1288, OID on tax-exempt bonds accrues on a compound basis. The amount of OID that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of that Security, plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on that Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on that Security during that accrual period. The amount of OID accrued in a particular accrual period will be considered to be received ratably on each day of the accrual 15 period, will be excludable from gross income for Federal income tax purposes, and will increase the owner's tax basis in that Security. Prospective investors should consult their own tax advisors concerning the calculation and accrualofOID.] Original Issue Premium. If a Security is issued at a price that exceeds the stated redemption price at maturity of the Security, the excess of the purchase price over the stated redemption price at maturity constItutes "premium" on that Security. Under Code * 171, the purchaser of that Security must amortIze the premium over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This will result in an increase in the gain (or decrease in the loss) to be recognized for Federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no Federal income tax deduction is allowed. Prospective investors should consult their own tax advisors conceming the calculation and accrual of bond premium.] Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gam or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general. infonnatlon reporting requirements will apply to certain payments of principal, interest and premIUm paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entitles). A backup withholding tax will apply to such payments if the owner faIls to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dIvidend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit agamst the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, mcluding, without limitation. finanCIal instItutIOns, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreIgn corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred ceJiain expenses allocable to the Secunties. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS The City has applied to Moody's Investors Service for ratings on the Notes and Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if. in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. The City'S other outstanding general oblJgatJon notes and bonds have been rated "MIG I" and "Aa2", respectively, by Moody's. . FINANCIAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Financial Advisor to the City in connection with the sale of the Securities. The Financial Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Financial Advisor are contingent upon the issuance of the Securities. 16 UNDERWRITING The Notes were purchased at public sale on , 2012, by (the "Notes Successful Bidder") at a price equal to , plus accrued interest to the date of closing. The Series 2012-A Bonds were purchased at public sale on ___ ,2012, by (the "Senes 2012-A Bonds Successful Bidder") at a price equal to , plus accrued interest to the date of closing. The Series 2012-B Bonds were purchased at public sale on ____ , 2012, by (the "Series 2012-B Bonds Successful Bidder") at a price equal to . plus accrued interest to the date of closing. The Notes Successful Bidder, the Senes 2012-A Bonds Successful Bidder, and the Series 2012-B Bonds Successful Bidder are collectively referred to herein as (the "Successful Bidders"). ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that there is no controversy. suit, or proceeding of any kind pending or. to the knowledge of the City, threatened wherein or whereby any question is raJ sed, or may be raised, questionIng, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obllgation represented by the Bonds or the means proVIded for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), reqUlring continuous secondary market dIsclosure. In the Note Resolution and the Bond Resolutions, the City has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same or cause the same to be transmitted to certain repositories and the MunicIpal Securities Rulemaking Board, as applicable. This covenant IS for the benefit of and IS enforceable by the owners of the Notes and Bonds. See APPENDIX B for further details concermng continuing disclosure requirements. On June 28th, 2012 the City filed with the Municipal Securities RuJemaking Board's Electronic Municipal Market Access system ("EMMA") the annual financial lllformation and operating data required pursuant to Its existing continuing disclosure undertakmgs and complied in a tllnely manner with its obligations for the fiscal year ending December 3 L 2011. During the pnor five years the CIty did not always file the annual financial information and operatl11g data within 180 days of the end of its fiscal year as required. Past failures to file the annual financial information was primarily the result of not having audited finanCial statements completed within 180 days of the end of the fiscal year. The required operating data was made available to the public through the City's filing of certain official statements with the MSRB in April 2011 and 2010. July 2009 and 2008 and June 2007. The City has put into place procedures to ensure continued compliance with all undertakings with respect to the City's note and bond issues including acceleration of the deadline for the completion of Its annual audited financial statements and the formal adoption of a post issuance compliance policy. 17 CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS By Is/__________ _ Director of Finance and Administration ATTEST: 15/___________ _ CIty Clerk 18 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2011 Estimated Actual Valuation (1) 2011 Assessed Valuation Outstanding General Obligation Bonds (2) Population-2010 U.S. Census Bureau Estimate General Obligation Debt Per Capita Ratio of General OblIgation Debt to Estimated Actual Valuation 'Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (4) Direct and Overlapping General Obligation Debt (5) Direct and Overlapping Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 2,891,461,447 $ 449,760,638 $ 63,380,000 $ $ $ $ $ $ $ 47,707 1.329 2.19% 14.09% 1,485,000 0.00 16,120,000 66,357,521 131.222,521 2,751 4.54% 29.18% (J) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION -"Estimated Actual Valuation", (2) Includes the Bonds. Does not include bonds to be refunded with proceeds from the Series 2012-B Bonds (3) Includes the Notes. Does not include notes to be retired with proceeds from the Series 2012-A Bonds. (4) For a more detailed explanation of the overlapping debt of the other junsdictions, see DEBT Sill1MARY -"Overlapping Debt". (5) Includes outstanding general obligation bonds and temporary notes of the City and overlappmg jurisdictJOns. A-I GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2010 U.S. Census Bureau estimate of 47,707. The City is the county seat for Saline County which had an estimated 2010 U.S. Census Bureau population of55,606. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, . medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members ejected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administratIOn ofthe municipal government. Salina became a City of the first class on July 9,1920. There are no organized city employee unions. The present elected officIals of the City, along with the expiration of their current terms of office, are as follows: Name Norman Jenmngs Barb Shirley Samantha AngelJ Kaye Crawford Aaron Householter Retirement Systems Title Mayor VIce Mayor CommiSSIOner Commissioner CommISSIOner Term Expires 2013 2015 2013 2013 2015 The City partIcipates in the Kansas Public Employees Retirement System (KPERS) established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to prOVIde retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members, including four members appointed by the Governor subject to confirmation by the State Senate, one appointed by the President of the Senate. one appomted by the Speaker of the House of RepresentatIves, two elected by members and retlrants of the retirement system, which must be members of such system, and the State Treasurer. Members of the board of trustees serve four-year terms and elect a chairperson annually. The board of trustees appoints an Executive Director to serve as the managing officer of KPERS and employs a staff of approximately 95 people. As of June 30, 2010, KPERS serves about 277.000 members and 1,500 participatmg employers, including the State, school districts, counties, cities, public librari es, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas RetIrement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for more than 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: A-2 (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-teclmical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, 85% of which comes from the State General Fund. State legislation enacted in 2003 made certain pre-1962 Board employees (which are part of a small group of pre-1962 Board and University of Kansas Hospital Authority employees known as the "TIAA Group"), special members ofthe State/School Group. (b) Local Group -all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. State legislation enacted in 2003 made certain pre-1962 employees of the University of Kansas Hospital AuthOJity (which are a part of a small group of pre-1962 Board and University of Kansas Hospital Authority employees known as the "TIAA Group"), special members ofthe Local Group. KPERS is a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 200l. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts It from noncontributory pension plans (more common in the private sector), which are funded solely by employer contributions. The City's employees annually contribute: (a) 4% of theIr gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July L 2009), or (b) 6% of their gross salary to the plan if such employees are KPERS Tier 2 members (covered employment on or after July 1,2009). The City's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The City's contribution is 8.54% of the employee's gross salary for calendar year 2012. The City has established membership in the Kansas Police and Fire Retirement System ("KPFRS") for its police and fire personnel. KPFRS is a divIsion of and IS administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage mcreases. Employees contribute 7% of gross compensation and the City contributes 19.81 % of employees' gross compensation for calendar year 2012. In 2012, a number of changes to KPERS were approved, including: (a) Effective January 1,2015, the creation of a new KPERS Tier 3 category (covered employment on or after January 1, 2015) based on a cash balance plan. Each Tier 3 partIcipant shall have a retirement annuity account to which such participant shall contribute 6% of their gross salary to the plan. The employer or State contribution varies based on longevity of participant service: (1) 3% for less than 5 years; (2) 4% for at least 5 years but less than 12 years; (3) 5% for at least 12 years but less than 24 years; and (4) 6% for 24 or more years. Such account shall receive an interest credit of 5.25% per annum, and under certain circumstances, shall receive additional interest credits. Subject to certain exceptIons, a Tier 3 partiCIpant, upon retirement. shall receive a single life annuity benefit. (b) Increasmg the statutory maximum employer contribution annual increase from 0.6% per year (status quo) to 0.9% per year in 2014, l.0% in 2015,1.1% in 2016 and l.2% per yearby 2017. (c) EffectIve January 1, 2014, providing additional contribution flexibility for Tier 1 participants with corresponding benefit adjustments. (d) Effective January 1,2014, eliminate COLA adjustments for Tier 2 participants with corresponding benefit adjustments. (e) Provide additional flexibility for alternative investments for the plan (t) Provide for a single actually-determined employer contribution rate covenng all three KPERS Tiers, calculated for each KPERS group. (g) Provide new State funding sources to assist in reducing UAAL. The 2012 changes dId not address the Kansas Police and Firemen's Retirement System or the Kansas Retirement System for Judges. A-3 Population The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. According to the U. S. Census Bureau, the City's citizens had a median age of 36.4 years in 2010. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Police and Fire Protection Year 2010 2009 2008 2007 2006 U.S. Census Bureau Population 47,707 46,180 45,998 46,025 45,898 The City of Salina provides police and fire protection services to residents of the City and surroundmg areas. Firefighting services are provided from four stations located throughout the City With 92 full-time firefighters. The fire department operates 36 vehicles and provides emergency medical services. The police department employs approximately 8 I full-time police officers and operates 37 police vehicles, including patrol vehicles, motorcycles. and Cushmans. Education The City of Salina has a very complete and diverse educational system from the primary level up to Its higher educational instItutIOns. Unified School District No. 305 provides public education through its eight elementary. two middle, and two senior high schools. The District also operates altemative education. vocationaltechmcal. and speCIal education schools. Current enrollment IS over 7,000. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. A military school is located in the City and operates both a grade school and hIgh school. The City is home to five regIOnal or private upper-level specialty schools. The Kansas Highway Patrol has.a training academy located in Salina. One publIc library WIth over 230.000 volumes, two college libraries, a medIcal library, and a law library are located within the City. Kansas State University at Salina The University offers a variety of two-and four-year aVIation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies. aeronautIcal studies. and avionics. The campus is located entirely withm the boundaries of the Sahna AirpOJi IndustrIal Center. Approximately 7 I 6 students are currently enrolled in the school. Kansas Wesleyan University Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 800 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 27 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. A-4 Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Municipal Airport and scheduled air service is provided by SeaPort Airlines, offering weekday and weekend flights to Kansas City and Denver. . Utilities and Infrastructure Westar Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and pollce and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 330-bed regional facility divided between two Salina campuses. SRHC is an acute care facility for the diagnOSIs and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medIcal office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus ofSRHC. Several other facilities prOVIding mental health servIces. counseling, and alcohol and drug dependency treatment programs are located m the CIty. Financial Institutions Ten banks operatmg a total of 23 different facilities are located in the City. Five banks are headquartered 111 the City and rep0l1ed combined deposits in excess of$2.35 billion as of December 31, 2011. A savings bank has a branch office in the City. Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseballJsoftball fields, an aquatIc park, an art center. a community theater, a museum. tennis courts, and ice and roller skating facilities. Two pnvate clubs provide additional recreatIOnal opportunities for residents of the CIty. The Bicentennial Center, a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. A-5 ECONOMIC INFORMATION CONCERNING THE CITY Economic Characteristics The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa IndustIial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, ElDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips Lighting. Currently. manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and serVlces. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas counties m 2011 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. Saline County is located in the center of one of the most productive agricultural areas in the United States. In 2007-2008, 750 farms were located on 430,000 acres. Farm crops were valued at over $38 million harvested on 210,910 acres. Cattle and milk produced was valued at over $19 million. Salina is a Clty centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The Clt)'. Saline County, the Chamber of Commerce, and the Salma Airport Authority have developed several economic incentlves which can be offered as mducements to opening industnal facilitles. These include property tax abatement for basic industry, the waiving of building pennit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salma. Additionally. a "build-to-sUlt-tenant" agreement is available on sites in the Airp011 Industrial Center Jhat can provide 100% financing for land and building costs. Several major commercial projects are currently under construction in Salina. Menards home improvement store recently opened and consists of a 26,420 square-foot warehouse with 162,340 square-foot of floor space. Fed Ex, currently located in the City. is buildlllg a new dlstribution center. Salina Commumty Theater, Great Plains Manufacturing, Salina Area Technical College, and Brown Mackie are all doing major remodeling and/or expansJOns. The commumty has 1,200 acres of industrial sites available III North Salina, the South Industrial District, and the Alrport Industrial Center. Sites range in size from I-to 240 acres. and are available for aviation. manufacturing, and distribution and warehouse businesses. The Salina Airport Authoritv The Salina Airport Authority is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the Clty by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and developing the Salma Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The Salina Municipal AirpOJ1 is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises NOJ1h Central Kansas. The Airport also services the corporate, business, private A-6 aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University at Salma (KSUS). The campus of KSUS is located adjacent to the Airport. The University offers degrees in professional flight training. airframe and power plant maintenance, and avionics technology. Scheduled air service is provided by SeaPort Airlines. The airline offers weekday and weekend flights to the Kansas City International hub. During 2011, the Airport enplaned 2,705 passengers and also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2011, the Salina Air Traffic Control Tower logged over 69,207 aircraft operations serving the needs of over 7,000 business jets, the professional flIght training department of University at Salina, general aviation and military aircraft. The two fixed base operators on the field at Salina speciahzing in aviation fuel delivered over 2.39 million gallons of fuel to the wide variety of aircraft utilizmg the Airport during 2011. As of December 31, 2010, over 70 businesses and organizations at the Salina Municipal Airport and Airport Industrial Center employed over 3,700 employees with a combined payroll in excess of $130.4 million. One of the primary functions of the Authonty is to facilitate the continued grO\vth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce. and the Kansas Department of Commerce for the retention of existing business and mdustry and the recruitment of new business and industry. Major Emplovers Industrial development during the past ten years has established a broad. industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excludmg seasonal and part-tIme employees Name Schwan's Food Management Salina Regional Health Center Unified School Dlstnct No. 305 Exide TechnologIes Great Plains Manufacturing Philips Lighting Company City of Salina ElDorado National Advance Auto Parts Kasa Industrial Controls Source: Salina Chamber of Commerce Product/Business Frozen PIzza Health Care School System Battery Manufacturer Agricultural & Landscapmg Equipment Fluorescent Lamps City Government Busses/Recreational Vehicles Distribution Center Metal and Electrical Controls Fabncator Estimated Emplovment 1,850 1,082 935 800 650 600 493 255 200 200 The following table shows the per capita personal mcome for residents of Saline County and the State dunng the years mdicated: Year 2009 2008 2007 2006 2005 Source: Kansas Statistical Abstract, 2010 Saline County $38,752 39,173 37.201 36,133 32,672 A-7 State of Kansas $39,173 40,022 37,775 35,772 33,145 Labor Force According to the Kansas Department of Labor, the following table shows the labor force figures for the City of Salina and the State of Kansas. Year 2012 (May) 2011 2010 2009 2008 Year 2012 (May) 2011 2010 2009 2008 Current Indebtedness City of Salina Total Labor Force Em~loved Unem~lo:yed 26,007 24.439 1,568 26,263 24,555 1,708 26,156 24,434 1,722 26,783 25,193 1,590 26,469 25,422 1,047 State of Kansas Total Labor Force Em~)oved Unem~loved 1,491,061 1,404,111 86,950 1,505,043 1,404.339 100,704 1,504.883 1,397,208 107,675 1,507.644 1,399.356 108.288 1,480,875 1,415,467 65,408 DEBT SUMMARY OF THE CITY Unemployment Rate 6.0% 6.5 6.6 5.9 4.0 Unemployment Rate 5.8% 6.7 7.2 7.2 4.4 The fol1owing is an overVlew of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for whlCh payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Pur~ose of Issue Maturitv Outstanding 07-15-02 2002-B Internal Improvements S; 1,980,000 10-01-12 S; 165.000 07-15-03 2003-A Internal Improvements 4.350.000 10-01-13 640.000 * 05-01-04 2004-A Refunding 5.585.000 08-01-15 1.170.000 07-15-04 2004-B Internal Improvements 4,053,000 10-01-12 380.000 * 07-15-05 2005-A Internal Improvements 4.210,000 10-01-13 665,000 * 03-15-06 2006-A Internal Improvements 2.200.000 10-0] -26 ],650,000 07-15-06 2006-B Internal Improvements 885,000 10-01-21 535,000 06-15-07 2007-A Intemalimprovements 6,545.000 10-01-27 5,085,000 07-15-08 2008-A Internal Improvements 3,720,000 10-01-23 3,000,000 12-15-08 2008-B Internal Improvements 3,525.000 07-01-28 3.295,000 07-15-09 2009-A IntemaJ Improvements 23,695.000 10-01-29 20,645,000 05-01-10 201O-A Refunding & Improvement 6,875,000 10-01-25 6,100,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 7.360,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-31 6,565,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 2.365,000 07-15-12 2012-B Refunding 3,760,000 10-01-20 3,760.000 $63,380,000 *Does not include bonds to be refunded with proceeds from the sale ofthe Series 2012-B Bonds. A-8 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certam internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. Temporary Notes: Temporary notes represent general obligation indebtedness payable ultimately from the CIty's ability to levy unllmited taxes upon all taxable tangible property within its territorial limits. The City customarily redeems temporary notes with proceeds from the sale of long-term general obligation bonds or other available funds. Final. Original Date Maturity Note Amount Project Series Issued Date Amount Outstanding Street, Water. and Sewer 2011-1 07-15-11 08-01-12 $3,400,000 $ 0* Street, Water, and Sewer 2012-1 07-15-12 08-01-13 1,485.000 1,485,000 $1,485,000 *Amount outstanding ($3.400,000) to be redeemed wlth proceeds from the sale of the Series 2012-A Bonds and available cash from the CIty. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combmed water and sewage system. Revenue bonds do not represent a general obligatlon indebtedness of the City for which the City's taxing abilIty has been pledged. Date Issued 04-15-11 Overlapping Debt Purpose Improvements Amount of Issue $16,120.000 Final Maturitv 10-01-31 Amount Outstanding $16,120,000 According to the Saline County Clerk's office, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlappmg jurisdiction's debt that is applicable to the CIty i~ calculated by dlvlding the assessed valuatlon of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuatlOn of such jurisdlction. All debt outstanding is as of June 30,2012. Jurisdiction Salina Airport Authority U.S.D. No. 305 Saline County Amount Outstanding $26.170.000 43,200,000 o A-9 Estimated Share of the City Amount $26.170.000 40,187.521 o $66.357.521 Percentage 100.00% 93.03 Annual Debt Pavments The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Outstanding Bonds Series 2012-A Bonds Series 2012-B Bonds Year Princil!al Interest Princil!al Interest Princil!ai Interest Total 2012 $ 6,050,000 $ 1,054,651 $ 0 $ 0 2013 5,825,000 1,891,894 130,000 370,000 2014 4,945,000 1,681,254 145,000 935,000 2015 4,475,000 1,522,566 145,000 625,000 2016 4,470,000 1,373,116 150,000 460,000 2017 4.220,000 1,222,306 150,000 485,000 2018 4,300,000 1,052,269 155,000 470,000 2019 4,415,000 871,936 155,000 235.000 2020 2,645,000 727,721 155,000 180.000 2021 2,580,000 636,776 160,000 0 2022 2,615,000 543.266 165.000 0 2023 2,380,000 445,304 165,000 0 2024 2,070,000 352.060 170,000 0 2025 1,720,000 268,366 175,000 0 2026 1,380,000 196.190 175.000 0 2027 1.080,000 136,841 180,000 0 2028 950,000 89,603 0 0 2029 625.000 47,878 0 0 2030 250,000 21,675 0 0 2031 260.000 11,050 0 0 $57,255,000 $14,146,722 $2,365.000 $3.760.000 Historical Debt Information The following table shows historical balances of outstanding general obhgatlon bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation POl!ulation Capita 201 J $61,045.000 13.57% 2.11%, 47,707 1.279.58 2010 60.280,000 13.44 2.09 47,707 1.263.55 2009 52,900,000 11.81 1.83 46.180 1,145.52 2008 31,645,000 7.01 1.09 45,998 687.96 2007 27.650,000 6.24 0.98 46.025 600.76 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. ThIS plan identifies and prioritizes potential capital improvement projects within the City and includes the respectIve fundmg sources. Based on the CIty's last capital Improvements plan, the total cost of projects the City anticipates undertaking between now and 2014 is approximately $91.1 million, of which approximately $6.9 million is anticipated being financed through general obligation bonds. Borrowing requirements described above do not include future subdivision improvement projects financed with general obligation special assessment temporary bonds. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". A-JO The City has been involved with ongoing discussions concerning contamination in certain areas within the boundaries of the Salina Airport Industrial Center. This contamination was caused by activities occurring prior to 1964, when the site served as the Shilling Air Force Base. The City, the Salina Airport Authority, and other local governmental entities are pursuing federal funds to clean up the affected areas. In the event funding cannot be secured in a timely fashion or in sufficient amounts, it may be necessary for the City to lssue debt to relocate certain water wells. The exact timing and amount, if any, of such borrowing cannot be detennined at this time. If City borrowing is necessary for this project, it is anticipated that utility revenue bonds will be the first type of debt considered. Debt Payment Record The City has always met principal and mterest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are pennitted to lssue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city_ Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a Clty; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authonty of the city are not included 111 total aggregate debt for purposes of computing a city's debt limltatlon. FINANCIAL INFORMATION CONCERNING THE CITY Financial Statement SummarY The follow111g lS a summary of the combined revenues. expenditures. and fund balances for the City's General Fund for the most recent available years as shown in the Clty's Comprehenslve Annual Financial Reports. Thls summary has not been prepared or revlewed by the City's audJtor Audited Audited Audited Audited Revenues: 2008 2009 2010 2011 Property Taxes $ 2.546,938 $ 9,909,912 $ 8,764,040 $ 8,671,423 Sales Tax 11.985,856 11,668,987 11.117,078 11,767,400 Other Taxes 4.685,105 4,789.524 4,965,601 5,083,919 Intergovernmental 911.305 1.227.486 1,008.482 813,185 Charges for Services 5,793.253 5,375,308 7.193,831 7,822,307 Investment Revenue 244.769 0 0 28,972 Miscellaneous 496.742 356.249 352.308 501.260 Total Revenues $26,663.968 $33.327,466 $33.401.340 $34,688,466 Expenditures. General Government $ 3.336.26] $ 3.007,751 $ 3,549.487 $ 3,461.488 Publlc Safety 14,070.189 17,883.362 18,228.881 18,117,827 Public Works 5,239,844 6,345.981 6,245,355 6,132,020 Publlc Health and SamtatJOll IJ09,794 1,176,096 1,176,743 1.176.082 Culture and Recreation 2,297,431 2.294,894 2.599,921 2,734,957 Planning and Development 2,087.685 2,381)97 2,428,900 2,319.300 Capital Outlay 630.178 887.449 560.129 555.048 Total Expenditures $28,771,382 $33,977.330 $34,789,416 $34,496,722 Revenues Over (Under) Expendltures $(2.107,414) $ (649,864) $(1,388,076) $ 191,744 Other Sources (Uses) 806.306 (292.278) (82.124 ) (129.111) Net Change II1 Fund Balance $(1,301.108) $ (942,142) $(1,470,200) $ (62,633) Fund Balance January 1 $ 7,330.631 $ 6,029,523 $ 5,087,381 $ 3,617,181 Restatement of prior year balance 156,424 Fund Balance December 3 I $ 6,029.523 $ 5,087,381 $ 3,617,181 $ 3,836,238 A-II Assessed Valuation According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate ProI!er!J: {I} Utilities Vehicle Valuation 2011 $367,750,803 $19,918,188 $14,685,585 $47,406,062 $449,760,638 2010 364,544,771 21,488,933 14,214,579 48,184,331 448,432,614 2009 358,979,211 24,760,806 13,730,609 50,330,252 447,800,878 2008 356,678,712 28,373,980 14,929,456 51,351,656 451,333,804 2007 342,045,389 34,507,464 16,175,634 50,548,706 443,277,193 2006 321,695,326 39,691,690 16,530,171 50,551,299 428,468,486 2005 296,537,399 38,662.356 17,624,030 49,367,870 402,191,655 (1) Beginning in 2007, certain types of personal property were removed from the tax rolls. See footnote (3) to the table in FINANCIAL INFORMA nON -"Property Assessment Rates". Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes. real estate equalization ratios provided by the Kansas Depal1ment of Revenue (see FINANCIAL INFORMATION -"Property Assessment Rates"). and estImated actual valuation figures proVIded by the Salme County AppraIser's Office, the following table proVIdes November 1 estimated actual valuations for the City, unless otherwise noted, in the years mdicated. Year 2011 2010 2009 2008 2007 2006 2005 SI!ecial Assessments Residential Real Estate Equalization Ratio 12.04% (pre!.) 11.89 11.67 11.66 11.68 11.22 11.16 Estimated Actual Value $2,891,461.447 2,888,659.004 2,893,359,541 2,914,775.730 2,833,709.391 2.719,391.025 2,529.377.135 The City has pursued a policy of utilizing special benefit districts to assign' the cost of certam internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit dIstricts to pay for the cost of a variety of Improvements including street construction, storm water drams. sa11ltary sewer system improvements, street lighting, water system Improvements, recreational facilities, flood control proJects, bridges, and parking facilities. The City has typically utilized special benefit distncts to pay for the costs associated with constructing streets, sidewalh, curbs, gutters, and lighting in new residentIal developments within the City. When a developer requests the use of Special Assessments to finance public Improvements, the City requires that they pay 20% of the estimated cost of the project m cash, or fil e a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit distncts have also been created to pay for the cost of improvements to streets and SIdewalks in the City's downtown area. A-12 The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City mayor may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment dunng a 30-day assessment prepayment period or pay in annual installments with interest over a celtain number of years. Upon completion of the special benefit dlstnct Improvement proJects and a 30-day prepayment period, the City issues general obligation bonds to provide for pennanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Largest Taxpavers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2011 assessed valuatIons, and the percentage each taxpayer comprised of the total assessed valuation ofthe City. Companv Schwan's Sales (Tony's PIzza) Coyote Garrison Sahna LLC Salma Regional Health Center Westar Energy Kansas Gas Service Gateway Adams Inc. (Midstate Plaza) Wal-Mart Stores (Includes Sam's) Southwestern Bell Telephone Great Plams Manufactunng S&B Motels Building Permits Issued Type of Business Frozen PIzza ReglOnal Shopping Center Hospital and Medical Offices Utlllty Utility Shoppmg Center DIscount Retall Utility Agricultural Equipment Hotel % of Assessed Total Valuation Valuation S; 8.189,411 1.82% 6,254,037 1.39% 6.234,437 1.39% 4.294,726 0.95% 3.762,052 0.84(% 3,566.208 0.79%, 3,465.983 0.77% 2.655,148 0.59% 2.074,617 0.46% 2,064.471 0.46% $42,561.090 9.46% Buildmg permIts Issued by the CIty cun'entl) mallltam steady level". ThIS table reflects both private developments as well as the expansIOn to the educatIOnal facilities 111 the community. The five-year history of the total value of permits Issued IS: Year 2012 (thru May) 20i 1 2010 2009 2008 A-13 Value $19,937,316 19,752,335 52.358.547 12,192,481 18,276,022 Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday 111 September. Properties that are sold and not redeemed within two years after the tax sale are' subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The followi ng is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount o/., Amount % 2011 * 26.272 $10,582,043 $9,614.366 90.0% $ 9,629.140 91.00% 2010 26.022 10,425.260 9,823,578 94.2 10,118,285 97.06% 2009 25.855 10.289,701 9.831,289 95.5 10.126,228 98.41% 2008 25.886 10,369,087 9,825,122 94.8 10.119,876 97.60% 2007 23.959 9,432.248 8.941,650 94.8 9.209.900 97.64% 2006 23.789 9,029.080 8.648,305 95.8 8,907,754 98.66% 2005 23.999 8,478.392 8,223.308 97.0 8.470.007 99.90%, *Collections as of May 10, 2012 Tax Levies The CIty may levy taxes 111 accordance WIth the reqUIrements of its adopted budget. The County CIerIdetermines property tax levIes based upon the assessed valuations provided by the Appraiser and spreads the leVIes on the tax rolls. The following table gives the total tax levies for all tax111g junsdlctions per $1,000.00 assessed valuation ofthe City for the last five years. 2007 2008 2009 2010 2011 Levy Levy Levy Levy Levy for for for for for 2008 2009 2010 2011 2012 Jurisdiction Budget Budget Budget Budget Budget CIty of Salina 23.959 25.886 25.855 26.022 26.272 Salina Library 5.242 5.419 5.413 5.372 5.292 State Education & Other l.500 l.500 l.500 1.500 1.500 Unified School DIstrict No. 305 54.990 58.547 58.495 58.913 58.820 Airport Authority 2.877 2.877 4.315 4.055 4.007 Central Kansas Extension DIstrict 1.156 1.175 1.173 1.204 1.179 Saline County 27.435 29.347 31.303 31.432 32.576 Total 117.159 124.751 128.054 128.498 129.646 A-14 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are dIstributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. The total sales tax for goods and services in the City is 8.20%, which consists of 6.3% Imposed by the State, 1 % countywide local option sales tax, and .90% citywide local option sales tax. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1 % countywide local option sales tax. In 1992 voters of the City approved a local option .SO% citywide sales tax for purposes of helping fund general operations expenditures of the City. In November 1998, voters within the City approved an additional .2S% restricted local option sales tax to be collected through June 1, 2004 and distributed to Unified School District No. 30S to fund educational technology. The voters renewed the .2S% local option sales tax and are now using those collections for various city capItal improvements. In November 2008, voters in the City of Salina approved a .40% cItywide retailers dedicated sales tax to pay the costs of various City capital improvements including construct111g, operating and maintaining a $12.S million aquatic park. The .40% sales tax replaced the 2004 .25% sales tax on April L 2009 and terminates ten years after its commencement. The City of Salina deposits sales tax receipts from its 1992 tax into its General Fund. Sales tax receipts are used for funding general operating expendItures of the City and capital llnprovement projects. The following table lists the local-option sales tax receipts of the City of Salina 111 the years indicated. 2004 2008 1992 City's Portion of .25% Citywide .40% Citywide .50% Citywide 1 % Countywide Local Option Local Option Local Option Local Option Year Sales Tax ReceiI!ts Sales Tax ReceiI!ts Sales Tax ReceiI!ts Sales Tax ReceiI!ts 2008 $2,S88.}31 $ 0 $5,177,462 $6,808,395 2009 3,379,938 (1) 4,987,41S 6,703,839 2010 3,861,809 4,818.398 6,339.236 2011 4.080,342 5,076,7S1 6.690.649 2012 (thru May) 1,779.603 2,21S,817 2,932,739 (1) The 2008.40'10 sales tax became effective April 1,2009, at whIch time the 2004 sales tax stopped. ThIS figure is the combll1ed total receIpts of the 2004 sales tax and the 2008 sales tax for 2009. Source: City Clerk Budgeting Procedures Appbcable Kansas statutes reqUIre that budgets be legally adopted for all funds (including debt service and enterpnse funds) unless exempted by a specific statute. All budget~ are prepared utilizing the modified accrual basis further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, 111 addition to disbursements and accounts payable. are recorded as expenditures. The statutes provide that the budget for the succeeding calendar year must be prepared on or before August 1 and published on or before August S of each year. A public hearing is required to be held on or before August 15, with the final budget being adopted on or before August 2S of each year. Original appropriations may be modified by supplemental appropriations and transfers among budget categories. The City Commission must approve all significant changes. A-IS Kansas law prohibits cities and other governmental units from creating mdebtedness unless there is money on hand in the proper fund and unencumbered by previous commitments with which to pay the indebtedness. The execution of a contract, or the issuing of a purchase order, automatically encumbers the money in the fund for the payment of the amount represented by the commitment. It makes no difference thatthe amount may not have to be paid until more moneys are in the fund or until the following year. An exception to this cash basis law is the issuance of debt, in the form of bonds, notes, or warrants, pursuant to statutory authority, referendum or by the State Board of Tax Appeals. In the event debt is issued, funds need not be on hand for future payments. Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxatIOn purposes. Once appraised valuations have been determined. they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes. the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established ill 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property WIthin the State of Kansas. Real Property: Residential Commercial and Industrial-Real Property Agricultural Land (1) Agncultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Home" Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industnal Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational. literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. A-16 (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This biil specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercJaI, industriaL telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation DiviSIOn of the Kansas Department of Revenue conducts a study to compare the assessed valuatIOn of real property to estImated market val ue based on property saie prices. The study derives an equalization ratio which. when divided mto assessed valuation, provides a means to approximate actual market value. According to the 2011 Preliminary Kansas Appraisal/Sales RatIO Study, the equalization ratio for residential real property in Saline County was 12.04%, and commercial and industrial property was 28.75%. REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY A-J 7 APPENDIXB Form of Continuing Disclosure Instructions FORM OF CONTINUING DISCLOSURE INSTRUCTIONS $1,485,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 DATED JULY 15, 2012 THESE CONTINUING DISCLOSURE INSTRUCTIONS (the "Disclosure Instructions") are executed and delivered by the Issuer in connection with the issuance of the above-described notes (the "Notes") which are being issued simultaneously herewith pursuant to the Note Resolution, in which the Issuer covenants to enter into this undertaking to provide notice of certain material events with respect to the Notes in order to assist the Participating Underwriter in complying with the provisions of the SEC Rule. The Issuer is the only "obligated person" with responsibility for continuing disclosure with respect to the Notes. Section 1. Definitions. In addition to the definitions set fonh in the Note Resolmion, which apply to any capitalized tenn used in these Disclosure Instructions, unless otherwise defined herein, the following capitalized tenns shall have the following meanings: "Beneficial Owner" means any registered owner of any Notes and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Notes (including persons holding Notes through nominees, depositories or other intennediaries), or (b) is treated as the owner orany Notes for federal income tax purposes. "Designated Agent" means Gilmore & Bell, P.c. or one or more other entities desi~'11ated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of these Disclosure Instructions. "Dissemination Agent" means any entity designated in wntlllg by the Issuer to serve as dissemination agent pursuant to these Disclosure Instructions and which has filed with the Issuer a written acceptance of such designation substantially in the fonn attached hereto as Exhibit A. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures establIshed and maintained by the MSRB, which can be accessed at www.emma.msm.on.'. "Fiscal Year" means the one year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "Issuer" means the elty of Salina. Kansas. and any successors or asslgns. "Material Events" means any of the events listed in Section 2(a) hereof. "MSRB" means the Municipal Securities Rulemakmg Board. "Note Resolution" means the resolution of the governing body of the Issuer authorizing the issuance of the Notes. "Official Statement" means the Issuer's Official Statement for the Notes. B-1 "Participating Underwriter" means any of the original underwriters of the Notes required to comply with the SEC Rule in connection with offering of the Notes. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission of the United States. "SEC Rule" means Rule lSc2-12(b)(S) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 2. Reporting of Material Events. (a) Pursuant to the provisions of this Section, the Issuer shall give, or cause the Dissemination Agent, if any, to give, to the Repository within 10 Business Days after the occurrence of any of the following events with respect to the Notes, notice of the following events: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (S) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions ; the issuance by the Internal Revenue Service of proposed or final detenninations of taxability. Notices of Proposed Issue (IRS Fonn 5701-TEB) or other material notices or determinations with respect to the tax status of the Note, or other material events affecting the tax-exempt status of the Notes; (7) modifications to rights of Owners, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property secunng repayment of the Notes, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer; (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the tennination of a definitive agreement relating to any such actions, other than pursuant to Its tenns, if material; and (14) appointment of a successor or additional PaY1l1g Agent or the change of name of the Paying Agent, if material. (b) Notwithstanding the foreg01l1g, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Notes pursuant to the Note Resolution. Section 3. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under these Disclosure Instructions, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. (b) Material Event Notices. B-2 (1) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, infonn such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) The Issuer will promptly respond in writing to any such request. Whenever the Issuer obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent pursuant to this subsection (c) or otherwise, the Issuer shall promptly detennine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). If the Issuer has detennined that knowledge of an event is listed in (2), (7), (10) or (13) of the definition of a Material Event, is not material, the Issuer shall notify the Dissemination Agent in \vriting not to report the occurrence pursuant to Section 4(c)(3). (3) If the Disselnination Agent has been given v/ritten instructions by the Issuer to report the occurrence of a Material Event, the Dissemination Agent shall file a notice of such occurrence with the Repository within 10 Business Days after the occurrence, with copies to the Issuer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Notes pursuant to the Note Resolution. (c) Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in these Disclosure Instructions, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, hannless against any loss, expense and liabilities which it may incur arising out of or in the exercise or perfonnance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under thIS Section shall survive resignation or removal of the Dissemination Agent and payment of the Notes. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to these Disclosure Instructions. (d) Other Designated Agents. The Issuer may, from time to time, appoint or designate a DesIgnated Agent to submIt Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 4. Termination of Reporting Obligation. The Issuer's obligations under these Disclosure Instructions shall tenninate upon the legal defeasance, prior redemption or payment in full of all of the Notes, If the Issuer's obligations hereunder are assumed in full by some other entity as pennitted in the Note Resolution, such person shall be responsible for compliance with under these Disclosure Instructions in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such tennination or substitution occurs prior to the final maturity of the Notes, the Issuer shall give notice of such tennination or substitution in the same manner as for a Material Event under Section 2(b). B-3 Section 5. Amendment; Waiver. Notwithstanding any other provision of these Disclosure Instructions, the Issuer and the Dissemination Agent, if any, may amend of these Disclosure Instructions (and the Dissemination Agent shall not unreasonably refuse to execute any amendment so requested by the Issuer) and any provision of these Disclosure Instructions may be waived, provided that: (a) Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer and the Dissemination Agent, if any, with its opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to these Disclosure Instructions; (b) if the amendment or waiver relates to Sections 2(a), it may only be made in connection with a change in circumstances that arises from a change in law or legal requirements, or change in the identity, nature or status of an obligated person with respect to the Notes, or the type of business conducted; and (c) the amendment or waiver is either (1) approved by the Owners of the Notes in the same manner as provided in the Note Resolution with consent of the Owners, or (2) does not in the opinion of Bond Counsel materially impair the interests of the Owners or Beneficial Owners of the Notes. In the event of any amendment or walVer of a provision of these Disclosure Instructions, the Issuer shall be given in the same manner as for a Materia! Event. Section 6. Additional Information. Nothing in these Disclosure Instructions shall be deemed to prevent the Issuer from disseminating any other infonnation, using the means of dissemination set forth in these Disclosure Instructions or any other means of communication, or including any other infonnation in any notice of occurrence of a Material Event, in addition to that which is required by these Disclosure Instructions. If the Issuer chooses to include any mfonnation in any notice of occurrence of a Material Event, in additJOn to that which is specifically required by these Disclosure Instructions, the Issuer shall have no obligation under these Disclosure Instructions to update such information or include It in any future notice of occurrence of a Material Event. Section 7. Noncompliance. In the event of a failure of the Issuer or the DIssemination Agent, if any, to comply with any provision of these DIsclosure Instructions, the Participating Underwriter or any Beneficial Owner of the Notes may take such actions as may be necessary and appropriate, including seeking mandamus or specific perfonnance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under these Disclosure Instructions. Noncompliance With the provisions of these Disclosure Instructions shall not be deemed an Event of Default under the Note Resolution, and the sole remedy under these Disclosure Instructions 10 the event of any failure of the Issuer or the DisseminatJOn Agent, if any, to comply with these Disclosure Instructions shall be an action to compel perfonnance. Section 8. Notices. Any notices or communications to or among any of the parties referenced in these Disclosure Instructions may be given as follows: (a) To the Issuer at: 300 West Ash Salina, Kansas 67402 Fax: (785)309-5738 Attention: Clerk (b) To the Participating UnderwTiter at the address set forth in the Note Resolution or such other address as is furnished in writing to the other parties referenced herein. B-4 (c) To the Dissemination Agent at the address set forth on Exhibit A attached hereto. Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 9. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Section 10. Beneficiaries. These Disclosure Instructions shall inure solely to the benefit ofthe Issuer, the Dissemination Agent, if any, the Participating Underwriter and Beneficial Owners from time to time of the Notes, and shall create no rights in any other person or entity. Section 11. Severability. If any provision in these Disclosure Instructions, the Note Resolution or the Notes relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 12. Governing Law. These Disclosure Instructions shall be governed by and construed in accordance with the laws of the State of Kansas. Dated: July 26, 2012. CITY OF SALINA, KANSAS EXHIBIT A ACCEPTANCE OF DISSEMINATION AGENT Name of Issuer: Name of Note Issue: Dissemination Agent: City of Salina, Kansas $1,485,000 General Obligation Temporary Notes, Selies 2012-1, dated as of July 15,2012 Notice Address of Dissemination Agent: ____________ , having been duly appointed by the City of Salina, Kansas to act 111 the capacJty of Dissemination Agent pursuant to the Continuing Disclosure Instructions to which this acceptance is attached. accepts such duties and responsibilities set forth therein. Dated: B-5 FORM OF CONTINUING DISCLOSURE INSTRUCTIONS CITY OF SALINA~ KANSAS $[2,365,000] GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $[3,760,000] GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULY 15,2012 THESE CONTINUING DISCLOSURE INSTRUCTIONS (the "Disclosure Instructions") are executed and delivered by the Issuer in connection with the issuance of the above-described bonds (the "Bonds") which are being issued simultaneously herewith as of July 26, 2012, pursuant to the Bond Resolution, in which the Issuer covenants to enter into this undertaking to provide certain financial and other infonnation with respect to the Bonds in order to assist the Participating Underwriter in complying with the provisions of the SEC Rule. The Issuer is the only "obligated person" with responsibility for continuing disclosure with respect to the Bonds. Section 1. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized tenn used in these Disclosure Instructions, unless otherwise defined herein, the following capitalized tenus shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described in, Section 2 of these Disclosure Instructions. "Beneficial Owner" means any registered owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intennediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Bond Resolution" means collectively, the ordinances and the resolutions of the governing body of the Issuer authorizing the issuance of the Bonds. "CAFR" means the Issuer's Comprehensive Annual Financial Report. "Designated Agent" means Gilmore & Bell, P.c. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of these Disclosure Instructions, "Dissemination Agent" means any entity designated in wntmg by the Issuer to serve as dissemination agent pursuant to these Disclosure Instructions and which has filed with the Issuer a written acceptance of such designation substantially in the fonn attached hereto as Exhibit B. B-6 "EMMA" means the Electronic Municipal Market Access system for municipal secuntles disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Information" means the financial infonnation of the Issuer described III Section 2(a)(J) hereof. "Fiscal Year" means the one year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units, as in effect at the time of the preparation of the Financial Infonnation. "Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any of the events listed in Section 3(a) hereof. "MSRB" means the lv1unicipal Secmities Ru!emaking Board. "Official Statement" means the Issuer's Official Statement for the Bonds. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the SEC Rule in connection wIth offering of the Bonds. "Repository" means the MSRB via EMMA. "SEC" means the SecuritIes and Exchange Commission of the United States. "SEC Rule" means Rule 1Sc2-12(b)(S) adopted by the SEC under the SecuritIes Exchange Act of 1934, as the same may be amended from time to time. Section 2. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 180 days after the end of the Issuer's Fiscal Year, commencmg with the Fiscal Year ended 111 2012. file WIth the RepOSItory the Issuer's CAFR. which will contain the Fmancw! Infonnation and Operating Data (collectively, the "Annual Report"), as follows: (1) Financial information. The financial statements of the Issuer for such prior FIscal Year, accompanied by an audit report resulting fi'om an audit conducted by an Independent Accountant in confonnity with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all govemmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accounting basis is contained in Appendix A to the Official Statement. If such audit report is not available by the time the Annual Report is required to be· filed pursuant to this Section, the Annual Report shall contam unaudited financial statements and the audit report and accompanying financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Infonnation may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of B-7 such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as of the end of the Fiscal Year of substantially all of the infonnation and data contained in the following sections of Appendix A to the Official Statement: (i) Debt Summary (ii) Tax Levies (iii) Assessed Valuation (iv) Estimated Actual Valuation (v) Tax Collections (vi) Largest Taxpayers. together with any material adverse changes 111 the other portions of the section entitled "FINANCIAL INFORMATION." Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the MSRB via EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other infonnation as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(b). (b) If no Dissemination Agent has been appointed, the Issuer shall file the Annual Report as specified by Section 2(a) hereof; or if the Annual Report is not filed within the time period specified in Section 2(a) hereof, the Issuer shall send a notice to each Repository in substantially the fonn attached as Exhibit A within 10 Business Days after the date the Annual Report is required to be filed as set forth herein. Section 3. Reporting of Material Events. (a) Pursuant to the provisions of this Section, the Issuer shall give, or cause the Dissemination Agent, if any, to give, to the Repository within 10 Business Days after the OCCUlTence of any of the following events with respect to the Bonds, notice of the following events: (1) principal and interest payment delinquencies; (2) non-payment related defaults, ifmaterial; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perfonn; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final detenninations of taxability, Notices of Proposed Issue (IRS Fonn 5701-TEB) or other material notices or detenninations with respect to the tax status of the Bond, or other material events affecting the tax-exempt status of the Bonds; (7) modifications to rights of Owners, if material; (8) bond calls, if material, and tender offers; B-8 (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer; (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional Paying Agent or the change of name of the Paying Agent, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. Section 4. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under these Disclosure Instructions, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. (b) Annual Reports. If a Dissemination Agent is appointed, not later than 15 Business Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent or the Repository. The Dissemination Agent shall file a report with the Issuer certifymg that the Annual Report has been filed pursuant to these Disclosure Instructions, stating the date it was filed, or that the Issuer has certified to the Dissel11matlon Agent that the Issuer has filed the Annual Report with the Repository. If the Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report with the Repository, by the date required in Section 2(a), the Dissemination Agent shall send a notice to the Repository in substantially the form attached as Exhibit A. (c) Material Event Notices. (l) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, infom1 such person of the event, and request that the Issuer promptly notify the Dissemination Agent m writing whether or not to report the event pursuant to Section 4(c)(3). (2) Whenever the Issuer obtains knowledge of the occurrence of an event. because of a notice from the Dissemination Agent pursuant to Section 4(c)(J) or otherwise, the Issuer shall promptly detennine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent of such detennination. If appropriate, such writing shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer. Notwithstanding the foregoing, notice of M.aterial Events described in Sections B-9 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. (d) Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in these Disclosure Instructions, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim ofliability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to these Disclosure Instructions. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under these Disclosure Instructions shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as pennitted in the Bond Resolution, such person shall be responsible for compliance with under these Disclosure Instructions in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such tennination or substitution in the same manner as for a Material Event under Section 3(b). Section 6. Amendment; Waiver. Notwithstanding any other provision of these Disclosure Instructions, the Issuer and the Dissemination Agent, if any, may amend of these Disclosure Instructions (and the Dissemination Agent shall not unreasonably refuse to execute any amendment so requested by the Issuer) and any provision of these Disclosure Instructions may be waived, provided that: (a) Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer and the Dissemination Agent, if any, with its opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to these Disclosure Instructions; (b) if the amendment or waiver relates to Sections 2(a) or 3(a), it may only be made in connection with a change in circumstances that arises from a change in law or legal requirements, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; and (c) the amendment or waiver is either (J) approved by the Owners of the Bonds in the same manner as provided in the Bond Resolution with consent of the Owners, or (2) does not in the opinion of Bond Counsel materially impair the interests of the Owners or Beneficial Owners of the Bonds. If there is an amendment or waiver of a provision of these Disclosure Instructions, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of Financial Infonnation or Operating Data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (a) notice of such change shall be given in the same manner as for a B-IO Material Event under Section 3(b), and (b) the Annual Report for the year in which the change is made should present a comparison (in narrative fonn and also, if feasible, in quantitative fonn) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the fonner accounting principles. Section 7. Additional Information. Nothing in these Disclosure Instructions shall be deemed to prevent the Issuer from disseminating any other infonnation, using the means of dissemination set forth in these Disclosure Instructions or any other means of communication, or including any other infonnation in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by these Disclosure Instructions. If the Issuer chooses to include any infonnation in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by these Disclosure Instructions, the Issuer shall have no obligation under these Disclosure Instructions to update such infonnation or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of these Disclosure Instructions, the Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific perfonnance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under these Disclosure Instructions. Noncompliance with the provisions of these Disclosure Instructions shall not be deemed an Event of Default under the Bond Resolution, and the sole remedy under these Disclosure Instructions in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with these Disclosure Instructions shall be an action to compel perfonnance. Section 9. Notices. Any notices or communications to or among any of the partIes referenced in these Disclosure Instructions may be given as follows: (a) To the Issuer at: 300 West Ash Salina, Kansas 67402 Fax: (785)309-5738 Attention: Clerk (b) To the Participating Underwriter(s) at the address set forth in the Bond Resolutions or such other address as is furnished in writing to the other parties referenced herein. (c) To the Dissemination Agent at the address set forth on Exhibit B attached hereto. Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Section 11. Beneficiaries. These Disclosure Instructions shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, the Participating Underwriter and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. B-1] Section 12. Severability. If any prOVISIOn in these Disclosure Instructions, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13. Governing Law. These Disclosure Instructions shall be governed by and construed in accordance with the laws of the State of Kansas. CITY OF SALINA, KANSAS EXHIBIT A NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: N arne of Bond Issue: Name of Obligated Person: Date of Issuance: City of Salina, Kansas $[2,365,000] General Obligation Internal Improvement Bonds, Series 2012-A and $[3,760,000] General Obligation Refunding Bonds, Series 20l2-B, dated as ofJuly 15,2012 City of Salina, Kansas July 26, 2012 NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Instructions dated as of July 26, 2012. The Issuer anticipates that the Annual Report will be filed by _____ _ Dated: Name of Issuer: N arne of Bond Issue: Dissemination Agent: CITY OF SALINA, KANSAS EXHIBITB ACCEPTANCE OF DISSEMINATION AGENT City of Salina, Kansas $[2,365,000] General Obligation Internal Improvement Bonds, Senes 2012-A and $[3,760,000] General Obligation Refunding Bonds, Series 20l2-B, dated as ofJuly 15, 2012 Notice Address of Dissemination Agent: ___ --::-__ ----.,.. ____ ' having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Continuing Disclosure Instructions to which this acceptance is attached, accepts such duties and responsibilities set forth therein. B-12 APPENDIXC Financial Statements Since 1992. the City's comprehensive annual financial reports have recelYed the Certificate of Achievement for Excellence in Financial Reporting award by the Government Finance Officers ASSocIation. The Certificate of Achievement was developed to encourage governmental U111tS to prepare and publish an easIly readable and understandable financial report covering all funds and financial transactIons of the government dunng the fiscal year The following appendIx contains audited financial statements for the Citv of Salma's primary governmental functions for fiscal year ending December 31. 2011. At the time this report was completed the audited financial statements of two component units/Jomt ventures of the City. the Salina Airport Authority and Salina/Saline County Health Department, were not available and as a result have not been incorporated into the enclosed audit. The audIted financial statements for the Salina Airport Authority have subsequently been completed and can be found on the Municipal Security Rulemaking Board's EMMA website. The audIted financial statement for the Health Department have been delayed due to recent structural damage to the Health Department's admimstrative office~. Upon completion of the Health Departments audIt, the CIty will update Its audJt and release its Comprehensive Annual FinancIal Report. Mayor and City Commissioners City of Salina, Kansas INDEPENDENT AUDITOR'S REPORT ON THE BASIC FINANCIAL STATEMENTS • MIZE,--',HOUSER CXOMPANYrA. We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2011, which collectively comprise the basic financial statements of the City's primary government as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the "Kansas Municipal Audit Guide." Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of matenal misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate In the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's Internal control over financial reporting Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures In the financial statements. An audit also Includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit proVides a reasonable basis for our opinions. The financial statements referred to previously include only the primary government of the City of Salina, Kansas, which consist of all funds, organizations, institutions, agencies, departments, and offices that comprise the City's legal entity. The financial statements do not include financial data for the City's legally separate component units, which accounting principles generally accepted in the United States of America require to be reported with the financial data of the City's primary government. As a result, the primary government financial statements do not purport to, and do not, present fairly the financial position of the reporting entity of the City of Salina, Kansas. as of December 31, 2011. the changes In Its financial position, or, where appilcabie, its cash flows for the year then ended in conformity with accounting pnnclples generally accepted in the United States of America In accordance with accounting principles generally accepted In the United States of America, the City of Salina, Kansas. has issued separate reporting entity financial statements for which we have issued our report dated June 22, 2012. in our OpiniOn, the financial statements referred to above present fairly, in all matenal respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2011, and the respective changes In financial position and, where applicable, cash flows thereof and the respective budgetary' comparison for the General Fund, Flood & Drainage Improvement Fund, TOUrism and Convention Fund, Special Gas Fund, Bicentennial Center Fund and the Sales Tax Capital Fund for the year then ended In conformity with accounting principles generally accepted in the United States of America. WW\fo/milehQlIser com = mhco@mlzehouser.com 534 S Kansas Ave, Suite 700 • Topeka, KS 66603-3465 .785.233.0536 P • 785.233.1078 f 534 S Kansas Ave, Suite 400 • Topeka, KS 66603-3454 .785.234.5573 P • 785.234.1037 f 7101 College Blvd, Suite 900 • Overland Park, KS 66210-1984 .913.451.1882 P • 913.451.2211 f 120 E Ninth. Lawrence, KS 66044-2682 • 785.842.8844 P • 785.842.9049 f 900 Massachusetts, Suite 301. Lawrence, KS 66044-2868 • 785.749.5050 P • 785.749.5061 f Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3 through 13 and the schedules of funding progress on page 52 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Govemmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financiai statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures In accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The Introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the ;;;;:Cjj:nt(7l;? not expffiss an opinion or pro~de any assumnre on them. June 22, 2012 2 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Management Discussion and Analysis This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2011. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well rounded picture of the City's fmancial condition. Financial Highlights • Net Assets increased by $5,912,298. Governmental Net Assets declined by $463,769, while Business Type Net Assets increased by $6,376,067. (After prior year adjustments) • Liabilities also increased substantially due to the issuance of $16,120,000 in Revenue Bonds. • Sales taxes grew modestly (4.1%), a reversal of the previous two years of decline. • In Business Type Activities, the Water and Sewer fund saw asset growth, despite increases in operating expenditures, due to good revenue production. • The multi-year decline in fund balance for the General Fund was halted, with a slight recovery. • Tax delinquency rates have declined to a relatively normal level of 2.7%. + Personal property taxes continued to decline as a result of the exemption of business equipment from the tax rolis. • Investment revenues continue to be very minimal, but levels have stabilized. • The unemployment rate declined from 6.4% to 6.3%. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements, and are essential for the reader's understanding of the financial statements. Other supplementary Information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide finanCial statements present the results of the City's operations uSing the accrual baSIS of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole The Statement of Net Assets reports all of the City's assets and liabilities. Net assets, the difference between assets and liabilities, are an Important measure of the City's overall finanCial health. Net assets represent the total accumulated and unused resources available to the City for the purpose of providing services Over time, the increases and decreases in net assets can be monitored to determine if the City's financial position is improving or deteriorating. The Statement of Activities shows how the net assets have changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and bUSiness type activities. Governmental activities are the operations of the City generally supported by taxes, such as Public Safety (Police, Fire, and EMS), Public Works, Public Health, and Culture & Recreation. Business-type Activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include Water and Sewer, Refuse collection, the Golf Course, and operation of the City Solid Waste Facility. 3 Fund Financial Statements CITY OF SALINA, KANSAS Year Ended December 31, 2011 (Unaudited) The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major Governmental Funds are presented in individual columns, while Non-major Governmental Funds are aggregated into an "Other Governmental Funds" column. A combining statement for the Non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting, and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal Service funds are used to account for the cost of operations shared by various departments of the City. The city operates five internal service funds. Three of these are for self-insurance activity: Risk Management, Workers' Compensation Reserve, and Health Insurance. The remaining two account for our Information Systems activity and for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary Information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of Fiduciary Fund in which liabilities always equal assets, and thus there are no net assets. The City of Salina operates nine Agency funds. Schedules for these funds may be viewed in the supplementary section of thiS report. Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Cemetery and Mausoleum Endowments and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund's budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City's operations and economy. The City as a Whole This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. 4 Tax Base and Economy CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The City of Salina relies on three major groups of revenues to support it's operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for service, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to Governmental Activities, while charges for services apply to both Governmental (36%) and Business-type (64%) activities. Charges for Services account for about 46% ($37,249,107) of the City's revenue stream. Charges for Service depend on both the rate that is set for the activity, as well as the volume of services provided. The following table illustrates service volume and rate adjustments for some of the more significant services for the year ending December 31,2011. Description 2010 Volume 2011 Volume Change Rate Comments Golf Course: Rounds, 18 Hole 30.420 26.782 (3,638) No fee Increase Rounds, Par3 3,707 3,368 (339) No fee increase Annual Golf Members 33 18 (15) No fee increase River Festival Gate Count 64,835 72,664 7,829 $2.00 per button increase Development Services Inspections Performed 6,391 5,473 (918) Permits Issued 3,031 2,678 (353) Finance/Adm inistration EMS Runs Billed 3,473 4,003 530 Five percent increase Licenses Issued 1,296 1,358 62 Water Billings Issued 238,635 239,448 813 Water Metered (in Billion Gallons) 1.97 NA Parks and Recreation Kenwood Cove Attendance 119.000 111,063 (7,937) No fee increase Youth Teams 164 178 14 Adult Teams 300 308 8 Special Pops Programs 109 114 5 Trips/Tours offered 31 54 23 Youth Tournament Teams 424 388 (36) Adult Tournament Teams 140 164 24 Public Works Sanitation Customers 14,520 14,604 84 3% fee increase Landfill Tonnage 94,907 96,178 1,271 No fee increase Street Cut and Excavation Permits 181 201 20 Concrete Permits 155 143 (12) Water and Wastewater $2.00 per month per Water Treated (Billion Gallons) 2.30 2.30 typical user $2.00 per month per Wastewater Treated (Billion Gallons) 1 50 1.45 (0.05) typical user **In general, if not specified in the table, rates were adjusted an average of about 2% for most services. 5 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Sales taxes are the next largest component of the revenue mix, providing 20% ($15,847,742) of the total revenues. This is a slightly smaller portion than 2010 (21 %). The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1 % sales tax. Forty-four percent, (a rate of .4%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the Countywide tax is available for general purposes. Total revenue from the sales tax in 2011 was $ 15,847,742, up from $ 15,224,888 in 2010. This 4.1% increase follows a 4.7% decline (after adjustment for a change in rate) for 2010. A number of factors affect the sales tax. First are the regional and local economic conditions and relationships. These are most directly reflected in the proceeds of the City-wide tax, which grew by 5.8%. The City was unfavorably affected by the formula used to distribute the County-wide sales tax among participating jurisdictions (only Cities and the County participate, School and other special districts do not). The formula is based, in part, on the property tax efforts of each jurisdiction. Because the portion of the overlapping levy attributable to the City of Salina was increased for 2011, the City's allocated portion of the County-wide sales tax was decreased from 63.3% in 2010 61.85% in 2011. Total Countywide taxes received in 2011 were approximately $6,755,629. The change in formula thus resulted in a shift of about $158,000 from the City of Saiina to Saiine County in 2011. On November 4, 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2018. The tax was also modestly re-purposed, for Capital and Economic Development purposes only. Property Taxes are the third major component of the revenue mix, accounting for 16% ($11,711,254) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes, which are established by a countywide average tax rate, and the assessed value of the vehicle. Real estate assessed value increased by 2.4%. The total City mill levy was increased slightly, by .2%, while the overlapping levy increased by .3% Tax delinquency decreased from 5.6% to 2.7%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $19.9 million from It'S peak of $39.7 million in 2007. At the 2011 tax rate, this exemption is equivalent to $514,546 in lost revenue for 2011. Motor Vehicle value decreased by 5.8%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year Real Estate and Personal Property Assessed Valuation City Mill Levy ($ per $1,000) Operating (General Fund) Debt Service Total City Rate Total Overlapping Levy Percent of Total Taxes Collected Ratio of Total Taxes (including delinquent collections) to taxes Motor Vehicle Valuation 2010 2011 Change $ 397,470,626 $ 402,354,576 $ 4,883,950 20.082 19.236 [0.846J 5.773 6.786 1.013 25.855 26.022 0.167 124.707 128.498 3.791 94.4% 97.3% 2.9% 97.1% 99.9% 2.8% $ 50,330,252 $ 47,406,072 $ [2,924,180] The unemployment rate in Saline County declined very slightly from 6.4% in 2010 to 6.3% in 2011, reflecting general economic conditions. This is stil! slightly below the statewide and significantly below the national unemployment rate. The total labor force increased to 26,656, a change of 1.5%. In 2011, the top ten property taxpayers accounted for 11.22% of total assessed value. This is slightly more concentrated than ten years ago (at 11.18%) 6 Statement of Net Assets CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Net assets may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets exceeded liabilities by $187,641,000 at December 31, 2011. This represents an increase in net assets of $6,519,000 over 2010. A comparative condensed Statement of Net Assets at December 31,2010 and 2011: Governmental Business-Type Activities Activities Total Prtma~ Government % of % of 2011 2010 2011 2010 2011 2010 Total 2011 Total Change Cash and Investments $ 13,935 $ 17,475 $17,530 $ 28,047 $ 31,465 12% $ 45,522 16% $ 14,057 Other Current Assets $ 12,309 $ 12,670 $ 2,025 $ 2,344 $ 14,334 5% $ 15,014 5% $ 680 Noncurrent (Capital) Asset $166,122 $164,515 $ 58,273 $67,639 $224,395 83% $232,154 79% $ 7,759 Total Assets $192,366 $194,660 $ 77,828 $98,030 $270,194 ~ $292,690 ~ $ 22,496 Current Liabilities $ 21,918 $ 21,687 $ 3,352 $ 2,944 $ 25,270 29% $ 24,631 23% $ (639) Noncurrent liabilities $ 52,650 $ 55,639 $10,538 $24,772 $ 63,188 71% $ 80,411 77% $ 17,223 Total Liabilities $ 74,568 $ 77,326 $13,890 $27,716 $ 88,458 ~ $105,042 ~ $ 16,584 Net Assets Invested In capital assets, net of related debt $113,001 $109,289 $48,079 $44,227 $161,080 89% $153,516 82% $ (7,564) Restricted for Permanent Funds $ 417 $ 427 $ $ $ 417 0% $ 427 0% $ 10 Restricted for Debt ServiCE $ 572 $ 1,285 $ 1,553 $ 1,553 $ 2,125 1% $ 2,838 2% $ 713 Unrestricted $ 3,808 $ 6,333 $14,306 $24,534 $ 18,114 10% $ 30,867 16% $ 12,753 Total Net Assets $117,798 $117.334 $63,938 $70,314 $181,736 ~ $187,648 100% $ 5,912 Percent of Total Assets 65% 63% 35% 37% 100% 100% Cash and Inves.tments as a percentage of current liabilities 64% 81% 523% 953% 125% 185% The largest segment of the City's net assets (82%) reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that IS still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt can not come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net assets (2%) is restricted for debt service. The remainder (unrestricted) of net assets (16%) may be used to meet the City's obligations to citizens and creditors. This is comparable to previous years. In 2011, the amount invested In capital assets net of related debt decreased by $7,564,000. Unrestricted net assets increased by $12,573,000. These represent diverse changes throughout the financial statement: Increases in cash in both Governmental and Business type activities, a decrease in Capital assets in Governmental Activities and an increase in Capital Assets in Business type activities. Total liabilities remained much the same in Governmental Activities, but increased significantly in Business Type Activities, attributable to the issuance of Revenue Bonds to finance the Advanced Meter Infrastructure project. During the year ended December 31, 2011, there were several significant events that changed the balance of net assets. Governmental Activities. 2011 saw an increase in cash and investments in Governmental funds. This is due to controlled expenditures for both capital and operating requirements as well as improved revenues from the Sales Tax. 7 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Business-type Activities: The Water and Wastewater fund has a dominant influence on the Business Type Activities net assets. The increase in net assets is due to good revenue production and controlled expenses. Statement of Activities A condensed statement of activities is shown below. Condensed Comparitive Statement of Activities, 2010 and 2011 (In $OOO's) Governmental Business-T~ee Total Prima~ Government 2010 2011 2010 2011 2010 % 2011 % 2010 -2011 Program Revenues: Change Charges for Services $ 12,306 $ 13,470 $22,419 $23,779 $ 34,725 48% $ 37,249 47% $ 2,524 Operating Grants and Contributions $ 3,415 $ 2,907 $ 202 $ 3,415 5% $ 3.109 4% $ (306) Capital Grants and Contributions $ 3,804 3) 0% $ 3,804 5% $ 3,804 General Revenues: Property Taxes $ 11,179 $ 11,712 $ 11,179 16% $ 11,712 15% $ 533 Sales Taxes $ 15.225 $ 15,848 $ 15,225 21% $ 15,848 20% $ 623 Other Taxes $ 6,298 $ 6,389 $ 6,298 9% $ 6,389 8% $ 91 Investment Revenue $ 81 $ 77 $ 67 $ 83 $ 148 0% $ 160 0% $ 12 Other Miscellaneous $ 565 $ 872 ~ ~ $ 906 1% $ 1,202 2% $ 296 Total Revenues' $ 49,069 $ 51,275 $22,827 $ 28,198 $ 71.896 100% $ 79.473 100% $ 7,577 Expenses' $ General Government $ 10,845 $ 13,615 5) 10,845 15% $ 13,615 18% $ 2,770 Public Safety $ 18,592 $ 18,579 $ 18,592 25% $ 18,579 25% $ (13) Public Works $ 9,782 $ 9,858 $ 9,782 13% $ 9,858 13% $ 76 Public Health and Sanitation $ 1,365 $ 1,368 $ 1,365 2% $ 1,368 2% $ '3 Culture and Recreation $ 6,572 $ 6,693 $ 6,572 9% $ 6.693 9% $ 121 Planning and Development $ 3,715 5) 3,450 $ 3,715 5% $ 3.450 5% $ (265) Solid Waste Disposal $ 2,925 $ 2,945 $ 2.925 4% $ 2,945 4% $ 20 Water and Sewer $14,050 $13,597 $ 14,050 19% $ 13,597 18% $ (453) Sanitation $ 2,261 $ 2,261 $ 2,261 3% $ 2.261 3% $ Golf Course $ 817 $ 825 $ 817 1% $ 825 1% $ 8 Interest on Long Term Debt $ 2,257 5) 1,650 $ 2,257 3% 5) 1,650 2% $ (607) Total Expenses $ 53,128 $ 55,213 $20,053 ~ $ 73,181 100% $ 74,841 100% $ 1.660 Increase In net assets before transfers $ (4,059) $ (3,938) $ 2,774 $ 8,570 $ (1.285) $ 4,632 $ 5,917 Transfers and other extraordinary Items $ 92 $ 2,362 ~) $(2,163) $ $ 199 $ 199 Increase in Net Assets $ (3,967) $ (1,576) $ 2,682 $ 6,407 $ (1,285) 5) 4,831 $ 6,116 Net Assets, January 1 $119,854 $117,798 5) 61.270 $63,938 $181,124 $181,736 $ 612 Prior Penod Adjustment 3) 1,911 $ 1,112 ~L..Ql) $ 1,897 $ 1,081 $ (816) Net Assets, January 1, restated $121,765 $ 118,910 5) 61 ,256 $63,907 $183,021 $182,817 $ (204) Net Assets December 31 $117,798 $117,334 $63,938 $70,314 $181,736 $187,648 $ 5,912 Governmental Activities. Total expenses for Governmental Activities for the year ending December 31, 2011 were $55,213,000 compared to $53,128,000 in 2010. Governmental activities represent 74% of the City's total expenses. The largest element of Governmental Activity expense was Public Safety, accounting for 34% of the total. Charges for service attributable to Governmental Activities totaled $13,470,000 and operating grants for those purposes were $2,907,000. The balance was funded by general revenues. Sales taxes accounted for $15,848,000 of the general revenues, with property taxes providing $11,712,000. Net assets decreased by $1,576,000 as a result of Governmental Activities. Business Tvpe Activities, Total expenses for Business-type Activities for the year were $19,628,000, or 26% of the City's total expense, The majority of this expense ($13,597,000) is attributable to Water and Sewer operations, with the other activities (Solid Waste Disposal, Sanitation, and Golf Course) costing a combined total of $6,031,000, These activities are primarily supported by user charges, with only $413,000 coming from general revenues, representing largely the interest earned on fund balances held by the City. Net assets Increased by $6,407,000 as a result of Business-type Activity operations, 8 Fund Financial Analysis Governmental Funds Fund Balances: CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The table below shows the Governmental Fund balances for major funds for the years ended December 31,2010 and December 31,2011. Governmental Fund Balances, 2010 and 2011 Fund 2010 2011 Change General $ 3.617,181 $ 3,836,238 $ 219.057 Flood and Drainage $ 188,526 $ 907 $ (187,619) Tourism and Convention $ 367,197 $ 340,473 $ (26,724) Special Gas $ 1,484,641 $ 1,417,743 $ (66,898) Bicentennial Center $ 46,048 $ 142,881 $ 96,833 Sales Tax Capital $ 2,154,367 $ 1,397,571 $ (756,796) Debt Service $ 571,873 $ 1,285,130 $ 713,257 Capital Projects $ (2,610,001 ) $ 390,852 $ 3,000,853 Other Governmental Funds $ 2,981,652 $ 2,792,546 $ (189,106) Total $ 8,801,484 $ 11,604,341 $ 2,802,857 Total Governmental Fund balances increased by $2,802,857. The reasons for these changes are varied. The most significant change is in the Capital Projects Fund, and is largely the result of Project financing activities. General Fund balances stabilized and grew slightly in 2011. The Flood and Drainage Fund was scheduled for depletion in 2011. The Special Sales Tax Capital Outlay Fund shows a significant reduction in fund balance due to an aggressive capital improvements program, most notably the reconstruction of Marymount Road. Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31,2010 and 2011. Consolidated Statement of Revenues and Expenditures for Major Funds. 2010 and 2011 Modified Accrual BasIs Fund 2010 2011 Change Revenues (Including Other Fmanclng Sources) General $ 34,303,574 $ 35.557,304 $ 1,253,730 Flood and Drainage Improvement $ 1,312 $ 18.473 $ 17,161 Tourism and Convention $ 1,332,671 $ 1,306,102 $ (26,569) Special Gas $ 1,569.648 $ 1,546,045 $ (23.603) Bicentennial Center $ 1,702.066 $ 1,656,762 $ (45,304) Sales Tax Capital $ 3.815.966 $ 3.777.286 $ (38.680) Debt Service $ 7,943865 $ 6.844,521 $ (1.099,344) Capital Projects $ 5,552.906 $ 9,896,198 $ 4,343,292 Other Governmental Funds' $ 2.954.257 $ 2,800,508 $ (153.749) Total Revenues $ 59,176,265 $ 63,403,199 $ 4,226,934 Less Other Sources $ 12,157.284 $ 14,581,655 $ 2,424,371 Revenues. net of other sources $ 47.018,981 $ 48.821.544 $ 1.802.563 Expenditures (Including Other Financing Uses) General $ 35,773,774 $ 35,494,671 $ (279,103) Flood and Drainage Improvement $ 3.223 $ 206,092 $ 202,869 Tourism and Convention $ 1.228,789 $ 1,332.826 $ 104.037 SpeCial Gas $ 2,138,057 $ 1,612.943 $ (525,114) Bicentennial Center $ 1.768,246 $ 1,559,929 $ (208,317) Sales Tax Capital $ 3,289.009 $ 4,534.082 $ 1.245.073 Debt Service $ 8.107.283 $ 6,131,264 $ (1,976,019) Capital Projects $ 15,936,269 $ 6,895,345 $ (9,040,924) Other Governmental Funds' $ 2,829.609 $ 2.989,614 $ 160.005 Total Expenditures $ 71,074,259 $ 60,756,766 $ (10,317,493) Less Other Uses $ 4,983.834 $ 5,692.077 $ 708,243 Expenditures. net ot other uses $ 66,090,425 $ 55,064,689 $ (11.025.736) 9 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Total revenues and other sources increased by $4,226,934 from 2010 to 2011. The largestcomponent of this change was in the Capital Projects accounts, and is related to Construction activities. Other changes include an increased General supplement for the Bi-Centennial Center and changes in temporary note activity. Expenditures generally declined, with the notable exception of the Sales Tax Capital Fund, which was committed to the Marymount Road reconstruction, along with some smaller projects. Proprietary Funds The City of Salina operates four Enterprise Funds as well as five Internal Service Funds. A summarized comparative Statement of Net Assets follows for each Enterprise Fund: Comparative Summary Statement of Net Assets; 2010 -2011 (in $OOO's) Solid Waste Disposal Water and Sewer 2010 2011 Change 2010 2011 Change Current Assets $ 3,887 $ 3,611 $ (276) $ 14,755 $ 25,988 $ 11,233 Capital Assets $ 4,211 $ 3,495 $ (716) $ 53,075 $ 63,184 $ 10,109 Total Assets $ 8,098 $ 7,106 $ (992) $ 67,830 $ 89,172 $ 21,342 Current Liabilities $ 1,010 $ 528 $ (482) $ 2,091 $ 2,363 $ 272 Noncurrent Liabilities $ 3,192 $ 2,868 $ (324) $ 7,161 $ 21,640 $ 14,479 Total Liabilities $ 4,202 $ 3,396 $ (806) $ 9,252 $ 24,003 $ 14,751 Assets Invested in Capital, net of related debt $ 2,294 $ 2,276 $ (18) $ 45,567 $ 40,991 $ (4,576) Restricted Net Assets $ $ $ $ 1,553 $ 1,553 $ Unrestricted Net Assets $ 1,602 $ 1,434 $ (168) $ 11,458 $ 22,625 $ 11,167 Total Net Assets $ 3,896 $ 3,710 $ (186) $ 58,578 $ 65,169 $ 6.591 Current Assets as a percentage of current liabilities 385% 684% 706% 1100% Sanitation Golf Course 2010 2011 Change 2010 2011 Change Current Assets $ 846 $ 761 $ (85) $ 66 $ 32 $ (34) Capital Assets $ 639 $ 646 $ 7 $ 348 $ 314 $ (34) Total Assets $ 1,485 $ 1,407 $ (78) $ 414 $ 346 $ (68) Current Liabilities $ 203 $ 29 $ (174) $ 48 $ 24 $ (24) Noncurrent Liabilities $ 123 $ 156 $ 33 $ 61 $ 109 $ 48 Total Liabilities $ 326 $ 185 $ (141 ) $ 109 $ 133 $ 24 Assets Invested in Capital, net of related debt $ 639 $ 646 $ -, I $ 348 $ 314 $ (34) Restricted Net Assets $ $ $ $ $ $ Unrestricted Net Assets $ 520 $ 576 <t c::e:: $ (43) $ (101 ) $ (58) '" -.IV Total Net Assets $ 1,159 $ 1,222 $ 63 $ 305 $ 213 $ (92) Current Assets as a percentage of current liabilities 417% 2624% 138% 133% 10 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The Golf Course Fund shows declines in total net assets, due primarily to a reduction in current assets, however, capital assets also decline. Unrestricted net assets in this fund reflect a $101,000 deficit balance, up from $43,000 a year ago. The Solid Waste fund shows decreases in assets as well as liabilities, the result of constructing an additional cell. The Water and Sewer fund shows a significant increase in long term liabilities as a result of a Revenue Bond Issue. Both Current and Capital assets increase significantly within this fund. Revenues, Expenses, and Changes in Net Assets The Water and Wastewater Funds, showed healthy results from operations, with net assets increasing significantly due to a good revenue flow (attributable to both adequate rates and favorable weather conditions) and controlled expenses. The Golf Course showed a very significant loss on the year, requiring increased transfers from the General Fund to maintain cash liquidity. The Sanitation Fund is stable. Net assets declined slightly in the Solid Waste fund. Comparative Summary of Revenues, Expenses and Changes in Net Assets, 2010 and 2011 (In $OOO's) Solid Waste Disposal Water and Sewer 2010 Operating Revenues $ 2,878 $ Operating Expenses $ 2,852 $ Operating Income $ 26 $ Non-operating revenues (expenses) $ {55) $ Income (Loss) before Transfers $ Transfers in (out) $ (29) $ (139) $ Capital Contributions .;:..$ __ $ Change in Net Assets $ (168) $ 2011 Change 2,929 $ 51 2,829 $ {23) 100 $ 74 {107) ",-$_~ (7) $ (180) $ $ {187) ,;,.$=~ 2010 $ 16,789 $ 13,571 $ 3,218 Net Assets, January 1 Restatement $ 4,121 $ 3,896 $ (225) $ 55,668 $ {57) -,-$ _1 ",-$ _5 8 $ 48 Net Assets, January 1, restated Net Assets, December 31 Operating Revenues Operating Expenses Operating Income Non-operating revenues (expenses) $ 4,064 $ 3,897 $ P67) $ 55,716 $ 3,896 $ 3.710 $ {186) $ 58,578 Sanitation 2010 2011 Change 2010 $ 2,311 $ 2,335 $ 24 $ 783 $ 2,276 $ 2,292 $ 16 $ 817 $ 35 $ 43 $ 8 $ (34) $ 18 $ 32 $ 14 $ 2011 Change $ 18,361 $ 1,572 $ 12,964 $ {607) $ 5,397 $ 2,179 $ 58,578 $ 2,910 $ {19) $ {67) $ 58,559 $ 2,843 $ 65,169 $ 6,591 Golf Course 2011 Change $ 687 $ (96) $ 825 $ 8 $ (138) $ (104) $ $ Income (Loss) before Transfers $ 53 $ 75 $ 22 $ (34) $ (138) $ (104) Transfers in (out) $ (50) $ $ 50 $ 20 $ 47 $ 27 Capital Contributions $ $ $ $ $ $ Change in Net Assets $ 3 $ 75 $ 72 $ {14) $ (91) $ (77) Net Assets, January 1 $ 1,166 $ 1,159 $ (7) $ 314 $ 305 $ (9) Restatement $ {10) $ (12) $ {2) $ 5 $ {1 ) $ (6) Net Assets, January 1, restated $ 1,156 $ 1,147 $ {9) $ 319 $ 304 $ (15) Net Assets, December 31 $ 1,159 $ 1,222 $ 63 $ 305 $ 213 $ (92) 11 Budgetary Highlights CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The objective of budgetary controls is to ensure compliance with legal provIsions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2011. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Reallocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. . There were a number of funds in which the budgets were amended, including the Flood and Drainage Improvement Fund, Sales Tax Capital Fund, Risk Management Fund, Central Garage Fund and the Water and Sewer Fund. The City experienced a number of significant variances from budgeted items in the General Fund, however, the total fund was within budgeted expenses. Motor vehicle taxes fell short of budget due to a delayed distribution from the County. Public Safety charges for service were significantly short of budget. This includes Court Revenues and EMS fees due from Saline County. Sales taxes exceeded budgetary levels slightly. Several expenditure items were also significantly over or under budget. Several Departments exceeded budgeted expenditures. In general, retirement system contributions exceeded budget Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2011 was $232,153,260 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2010 and 2011 : Capital Asset Balances Net of Depreciation, 12/31/2010 and 12/31/2011 (In OOO's) Governmental Activity Business-type Activity Total 2010 2011 2010 2011 2010 2011 Equipment, Furniture and Fixtures $ 1,314 $ 1,288 $ 1,982 $ 1,729 $ 3,296 $ 3,017 Vehicles $ 2,445 $ 2,996 $ 903 $ 812 $ 3,348 $ 3,808 Buildings and Improvements $ 23,625 $ 22,591 $ 12,345 $ 11,904 $ 35,970 $ 34,495 Land $ 22,477 $ 22,477 $ 1,541 $ 1,541 $ 24,018 $ 24,018 Infrastructure $ 83,712 $ 82,609 $ 39,985 $ 40,591 $ 123,697 $ 123,200 Construction in Progress $ 32,549 $ 32,554 $ 1,517 $ 11,062 $ 34,066 $ 43,616 Total $ 166,122 $ 164,515 $ 58,273 $ 67,639 $ 224,395 $ 232,154 * Net of Accumulated Depreciation 12 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Changes to capital assets may be summarized as follows: Changes to Capital Assets, 2011 (in OOO's) Governmental Business-Type Activity Activity Additions $ 547 $ 10,633 $ Retirements $ (3,110) $ (1,236) $ Adjustments $ 956 $ (31) $ Net Additions $ (1,607) $ 9,366 $ Total 11,180 (4,346) 925 7,759 Depreciation Expense Applied $ 4,730 $ 2,653 ,;:;.$==.";7"",,,3;,,;8;,;;,,3 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. Debt Management The City's general policy for General Obligation Bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding General Obligation Bonds for Governmental activities at December 31, 2011 totaled $55,225,670. In addition, there were temporary notes outstanding in the amount of $3,400,000. Business-type activities had $16,193,925 in Revenue Bonds outstanding, as well as $7,217,907 in General Obligation Bonds. Revenues generated by user fees are pledged to retire all of the Bonds Issued by BUSiness-type activities. The City engaged in several debt transactions during 2011. On August 1 st, the City issued $6,565,000 In internal improvement bonds. The bulk of the proceeds ($3,765,836) were used to finance an industrial fire protection system located at the Salina Airport Industrial Center. The balance of the proceeds were used to finance several residential subdivisions. Also on August 1 S\ the City issued $3,400,000 In temporary notes to finance public facilities to serve a commercial subdivision development. These note will be refinanced into a long term bond issue in August, 2012. Additional information on the City's debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City's finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206,300 West Ash Street, Salina, Kansas, 67401. 13 BASIC FINANCIAL STATEMENTS ASSETS Current assets: Cash and investments CITY OF SALINA, KANSAS STATEMENT OF NET ASSETS December 31, 2011 Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Deferred charges Total current assets Noncurrent assets: Capital assets, nondepreciable Construction in progiess Land Capital assets, depreciable Less: Accumulated depreciation Total noncurrent assets Total assets Liabilities: Current liabilities: Accounts payable Retalnage payable Accrued liabilities Matured bond principal and Interest Accrued interest payable Deposits payable Unearned revenue Current portion of compensated absences , Current portion of temporary notes payable Current portion of revenue bonds payable Current portion of general obligation bonds payable Total current liabilities Noncurrent liabilities: Accrued liabilities Compensated absences Net OPEB obligation Revenue bonds payable General obligation bonds payable Landfill post-closure care liabilities Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restncted for: Permanent funds: Expendable Debt service Unrestricted Total net assets Total Total Governmental Business-type Activities Activities $ 17,475,299 $ 28,047,281 1,122,221 1,396.659 10,848,090 35,877 16 205,410 571,702 458,315 375,179 30,145,212 30,390,837 32,554,357 11,062,055 22,477,191 1,541,002 196,166,753 101,308,419 86,683,788 46,272,729 164,514,513 67,638,747 $ 194,659,725 $ 98,029,584 $ 788,731 $ 294,449 468,309 608,219 563,720 5,145 512,680 211,291 163,904 10,315,524 581,694 122,301 3,400,000 343,696 5.051,038 1,200,048 21.686,841 2,943,908 149,245 2,507,440 527,190 2,807,425 334,458 15,850,229 50,174.632 6,017,859 2,042,254 55,638,742 24,771,990 $ 77,325,583 $ 27,715.898 $ 109,288,843 $ 44,226,915 426,741 1,285,130 1,553,016 6,333,428 24,533,755 $117,334,142 $ 70,313.686 The notes to the basic financial statements are an integral part of this statement. 14 Total Primary Government $ 45,522,580 2,518.880 10,848,090 35,893 777,112 833,494 60,536,049 43,616.412 24,018,193 297,475,172 132,956,517 232,153,260 $ 292,689,309 $ 1,083,180 1.076,528 563,720 5,145 723.971 163,904 10,315,524 703,995 3,400,000 343,696 6,251.086 24.630,749 149.245 3,034,630 3,141,883 15.850,229 56.192,491 2,042,254 80,410,732 $ 105.041.481 $ 153,515,758 426,741 2,838,146 30,867,183 $ 187,647,828 , Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitation Golf Course Total bus mess-type activities Total primary government CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES -For the Year Ended December 31,2011 Program Revenues EXl2enses $ 13,614,508 18,579,041 9,858,199 1,367,825 6,693,341 3,450,078 1,650,426 55,213,418 2,944,765 13.596.918 2,261,462 825,057 19,628.202 Charges for $ Services 6,106,067 3,766,156 261.707 42,729 3,140,025 153,675 13,470,359 2,904,371 17,904,056 2,334,119 636,202 23,778,748 Operaling Capital Grants and Grants and Contributions Contributions $ 359,148 $ 631,417 1,368,577 153,566 177,048 217,643 2.907,399 201,700 3,803,565 201,700 3,803,565 $74,841,620 $37.249107 $3,109,099 $ 3,803,565 General Revenues: Property taxes levied for General purposes Debt service Motor vehicle tax General purposes Sales tax General purposes Selective purposes Other taxes General purposes Investment revenues Miscellaneous Transfers, net Subtotal general revenues Change In net assets Net assets -begmnlng Prior period adjustment Net assets -begmnlng, restated Net assets -endln9 Net [ExpensesJ Revenue and Changes in Net Assets Total Total lotal Governmental Business-type Primary Activities Activities Government $ [7,149,293J $ $ [7,149,293J [14,181,468J [14,181,468] [8,227,915] [8,227,915] [1,171,530J [1 ,171 ,530J [3,376,268J [3,376,268J [3,078,760] [3,078,760] [1,650,426J [1,650,426J [38,835.660J [38,835,660J [40,394] [40,394J 8,312,403 8,312,403 72,657 72,657 [188,855] [188,855J 8,155,811 8155,811 [38.835,660) 8.155,811 [30,679.849) 7,782,768 7,782,768 2,778,845 2,778,845 1,149,641 1,149,641 11,767,400 11,767,400 4,080,342 4,080,342 6,389,878 6,389,878 77,095 83,399 160,494 871,904 330351 1,202,255 2,361,593 [2,162,772) 198,821 37.259.466 [1,749,022] 35,510,444 [1,576,194J 6406,789 4.830,595 117,797,911 63.93761 9 181,735,530 1,112,425 [30,722] 1,081,703 118,910,336 63,906,897 182,817,233 $117,334,142 $ 70,313,686 $ 187,647,828 The notes to the baSIC financial statements are an Integral part of thiS statement. 15 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31,2011 Flood & Tourism Drainage and Special General Improvement Convention Gas ASSETS Cash and investments $ 3,153,960 $ 907 $ 2,202 $ 1,195,840 Receivables (net) Accounts 677,815 338,271 Taxes 8,094,093 312,648 Interest 35,877 Inventory 89,716 Due from other funds 9,375 Cash with fiscal agent Total assets $ 12,060,836 $ 907 $ 340,473 $ 1,508,488 LIABILITIES AND FUND BALANCE liabilities: Accounts payable $ 301,319 $ -$ -$ 46,356 Retainage payable 44,389 Deferred revenue 7,923.279 Due to other funds Matured principal and Interest Temporary notes payable Total liabilities 8,224,598 90.745 Fund balance: Nonspendable 89,716 Restricted 340,473 1,094,720 Committed Assigned 292,816 907 323,023 Unassigned 3,453,706 Total fund balances 3.836,238 907 340,473 1,417,743 Total liabilities and fund balance $ 12,060,836 $ 907 $ 340,473 $ 1,508,488 Bicentennial Center $ 117,993 54,966 $ 172,959 $ 30,078 30,078 142,881 142,881 $ 172,959 Other Total Sales Tax Debt Capital Governmental Governmental Capital Service Projects Funds Funds $ 1,397,571 $ 1,236,026 $ 4,503,053 $ 2,773,395 $ 14,380,947 51,169 1,122,221 2,441,349 10,848,090 35,877 89,716 9,375 5,145 5,145 $ 1,397,571 $ 3,682,520 $ 4,503,053 $ 2,824,564 $ 26,491,371 $ -$ -$ 288,281 $ 22,643 $ 688,677 423.920 468,309 2,392,245 10,315,524 9,375 9,375 5,145 5,145 3.400,000 3,400,000 2,397,390 4,112,201 32,018 14,887,030 89,716 1,285,130 891,254 3,611,577 610,134 [2,477,564] 1,851,292 126,743 787,437 2,868,416 50,000 4.322,599 3,453.706 1,397.571 1,285,130 390,852 2,792,546 11,604,341 $ 1,397,571 $ 3,682,520 $ 4,503,053 $ 2,824.564 $ 26,491.371 The notes to the basic financial statements are an integral part of this statement. 16 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET ASSETS OF GOVERNMENTAL ACTIVITIES December 31, 2011 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net assets are different because Bond Issuance costs are shown as current year expenditures in the funds, Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is An internal service fund is used by the City's management to charge the costs of the worker's compensation program, The assets and liabilities of the internal service fund are included with governmental activities, The follOWing liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities In the funds, These liabilities at year end consist of' Compensated absences Net OPEB obligation Bonds payable Accrued interest on the bonds Net Assets of Governmental Activities 250,331,663 85,844,940 2,996,810 2,807,425 55,225,670 512,680 The notes to the basic financial statements are an integral part of this statement. 17 $ 11,604,341 458,315 164,486,723 2,327,348 [61,542,585) $ 117,334,142 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31,2011 Flood & Tourism Drainage and Special General ImQrovement Convention Gas REVENUES: Taxes Real estate taxes $ 7,564,508 $ -$ -$ Delinquent taxes 212,244 6,016 Motor vehicle taxes 894,671 General sales taxes 11,767,400 Selective sales taxes Other taxes 5,083,919 1,305,959 Intergovernmental 813,185 1,362,327 Special assessments Licenses and permits Charges for services 7,822,307 Investment revenue 28,972 143 3,718 Reimbursements Miscellaneous 501,260 11,550 Total revenues 34,688,466 17,566 1,306,102 1,366,045 EXPENDITURES' Current General government 3,461,488 Public safety 18,117,827 Public works 6,132,020 9,784 427,429 Public health and sanitation 1,176,082 Culture and recreation 2,734,957 Planning and development 2,319,300 736,386 Miscellaneous Capital outlay 555,048 196,308 1,183,678 Debt service PrinCipal retirement Interest and other charges Total expenditures 34,496,722 206,092 736,386 1,611,107 Excess [deficiency) of revenue and other sources over [under) expenditures and other [uses) 191,744 [188,526J 569,716 [245,062) OTHER FINANCING SOURCES [USES) Issuance of bonds Bond premium Transfers In 868,838 907 180,000 Transfers [out) [997,949J [596,440J [1,836) Total other financing sources [uses) [129,111 J 907 [596,440) 178,164 Net change in fund balance 62,633 [187,619J [26,724J [66,898J Fund balance -Beginning of year 3,617,181 188,526 367,197 1,484,641 Restatement of prior year fund balance 156,424 FUND BALANCE -Beginning of year, as restated 3,773,605 188,526 367,197 1,484,641 Fund balance -End of year $ 3,836,238 $ 907 $ 340,473 $ 1,417,743 Other Total Bicentennial Sales Tax Debt Capital Governmental Governmental Center Capital Service Prolects Funds Funds $ -$ -$ 2,723,262 $ -$ -$ 10,287,770 55,583 273,843 254,970 1,149,641 11,767,400 3,763,045 317,297 4,080,342 6,389,878 725,637 2,901,149 1,535,487 1,535,487 6,250 6,250 783,028 1,125,022 9,730,357 193 5,683 13,686 9,634 6,620 68,649 32,000 32,000 692 12,983 72,293 598,778 783,913 3,768,728 4,595,971 41,634 2,253,119 48,821,544 3,461,488 18,117,827 6,569,233 153,730 1,329,812 1,548,901 1,616,170 5,900,028 288,275 3,343,961 35 35 11,028 1,032,526 6,338,741 529,401 9,846,730 4,276,195 135,000 4,411,195 1,771,581 151,055 161,744 2,084,380 1,559.929 1.032,526 6,047,776 6.489.796 2,884,355 55.064,689 [776,016J 2,736,202 [1,451,805) [6,448,162) [631,236) [6,243,145) 6,565,000 6,565,000 22,985 22,985 872.849 8,558 2,225,565 3,289,564 547,389 7,993,670 [3,501,556J [83,488J [405,549J [105,259) [5,692,077J 872,849 [3,492.998) 2,165,062 9.449,015 442,130 8,889,578 96,833 [756,796J 713,257 3,000,853 [189,106) 2,646,433 46,048 2,154,367 571,873 [2,610,001) 2,981,652 8,801,484 156,424 46,048 2,154,367 571,873 [2,610,001J 2,981,652 8,957,908 $ 142,881 $ 1,397,571 $ 1,285,130 $ 390,852 $ 2,792,546 $ 11,604.341 The notes to the basic financial statements are an Integral part of thiS statement 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31,2011 Total Net Change In Fund Balances -GtlVernmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net assets and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the penod. Gain on sale of assets Proceeds from sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due This is the amount by which interest decreased. An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Bond and temporary note proceeds are other fmancing sources in the governmental funds, but they increase long-term liabilities in the statement of net assets and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net assets and does not affect the statement of activities. Changes In Net Assets of Governmental Activities [77,143] [10,070J 2,254,765 [4,725,361] The notes to the basic financial statements are an integral part of this statement. 19 $ 2,646,433 [2,557,809] 314,150 584,822 [523,988] [6,570.801) . 4,530,999 $ [1,576, 194J CITY OF SALINA, KANSAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31 , 2011 BUSiness-Type Activities. Emerprlse Funds Solid Waste Water and ASSETS DlsEosal Sewer Sanitation Golf Course Current assets Cash and investments $ 3,379,526 $ 24,042,117 $ 621,683 $ 3,955 Receivables (net of allowance for uncollectlbles) Accounts 231,123 1,026,364 139,172 Interest 16 Inventory and prepaid supplies 544,052 27,650 Deferred charges 375,179 Total current assets 3,610,665 25,987,712 760855 31,605 Capital assets Nondepreciable capital assets Construction In progress i i .062,055 Land 682,000 844,002 15,000 Depreciable' capital assets Capital assets 8,278,501 90,480,372 1,557,447 992099 Less' accumulated depreCiation 5,465,856 39,202,619 911,117 693,137 Total capital assets 3,494,645 63,183,810 646,330 313,962 Total assets $ 7,105,310 $ 89,171,522 $1,407,185 $ 345,567 Liabilities' Current liabilities Accounts payable $ 22192 $ 262,444 $ 6,859 $ 2,954 Retalnage payable 608,219 Interest payable 8,514 202,777 Meter depOSits payable 163,904 Current portion of compensated absences payable 11215 68,382 22,203 2050, Current portion of accrued claims payable Current portion of general obligation bonds payable 486,302 713.746 Current portion of revenue bonds payable 343696 Total current liabilities 528,223 2,363168 29,062 23,455 Noncurrent liabilities Compensated absences payable 48,340 294,765 95709 88376 Accrued claims payable Net OPEB Obligation 43,944 209.872 59830 20.812 Payable from restricted assets General obligation bonds payable 732.806 5.285053 Revenue bonds payable 15,850,229 Landfill post-closure care liabilities 2,042.254 Total noncurrent liabilities 2,867344 2, ,639,919 155,539 109,18S Total liabilities :£ 3395567 $ 24,003.087 $ 184,60, $ 132,643 Net Assets Invested in capital assets, net of related debt $ 2,275,537 $ 40,991,086 $ 646.330 $ 313,962 Restricted Restncted for bond retirement 1,553,016 Unrestricted 1,434,206 22,624,333 576.254 1,01 ,038) Total net assets $ 3,709,743 $ 65,168,435 $1.222,584 $ 212924 The notes to the baSIC financial statements are an Integral part of thiS statement 20 Total Internal Enterprise Service Funds Funds $ 28,047,281 $ 3,089,207 1,396,659 16 571,702 115,694 375,179 30.390,837 3,204.901 11,062,055 1,541.002 101,308419 866,638 46,272,729 838,848 67,638,747 27,790 $ 98,029,584 $ 3.232,691 $ 294449 $ 100,054 608219 211,291 163,904 122301 17.384 563.720 1,200,048 343,696 2,943,908 681,158 527,190 74,940 149.245 334,458 6017.859 15850,229 2,042,254 24,77',99C 22418t": $ 21.715.898 $ 905.343 $ 44.226,915 $ 27,790 1.553,016 24,533,755 2,299,558 $ 70,313,686 $ 2,327348 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31, 2011 Business-Type Activities: Entererise Funds Total Solid Waste Water and Enterprise Diseosal Sewer Sanitation Golf Course Funds Operating revenues Charges for services $ 2,904,371 $17,904,056 $ 2,334,119 $ 636,202 $ 23,778,748 Federal grants 201,700 201,700 Miscellaneous 24,491 255,256 424 50180 330,351 Total operating revenues 2,928,862 18,361,012 2,334.543 686,382 24.310.799 Operating expenses General government Public works 2,088,843 11,205,114 2,170,663 15,464,620 Recreation 791,488 791,488 Depreciation 740,047 1,758,777 120,799 33,569 2,653,192 Total operating expenses 2,828,890 12,963,891 2,291,462 825,057 18.909,300 Operating Income [loss] 99,972 5,397.121 43,081 [138,675) 5.401,499 Nonoperating revenues [expenses] Investment revenue 9,072 72,452 1,839 36 83,399 Debt service [115,875] [632,390] [748,265] Gam/[Ioss] on disposal of fixed assets 2,550 30,000 32.550 Accretion of bond premium 7,864 7,864 Amortization of bond Issuance costs [11,051) [11.051) Total nonoperating revenues [expenses] [106,803) [560,575) 31,839 36 [635,503) Income [loss] before transfers [6,831) 4,836,546 74.920 [138,639] 4,765.996 Transfers from [to] other funds T ra nsfers In 47,228 47.228 Transfers [out] [180,000) [2,030,000) [2.210,000) Total transfers [180,000) [2.030,000] 47.228 [2,162.772] Capital contributions 3,803.565 3.803.565 Change in net assets [186,831) 6.610,111 74,920 [91,411) 6,406.789 Net assets. January 1 3,895,812 58.578.036 1.159,149 304,622 63.937.619 Restatement 762 [19,712) [11,485] [287] [30,722) Net assets, January 1, restated 3.896.574 58.558,324 1,147,664 304,335 63,906,897 Net assets, December 31 $ 3,709,743 $ 65,168,435 $ 1,222.584 $ 212,924 $ 70,313,686 The notes to the basic financial statements are an integral part of this statement. 21 Internal Service Funds $ 9,881,156 251,196 10,132,352 9,611,278 4,698 9,615,976 516,376 8,446 1.129 9,575 525.951 60,000 60,000 585.951 1,737,815 3,582 1,741,397 $ 2,327,348 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Enaed December 31, 2011 Business-Type Activities. Enter~nse Funds Solid Waste Water and Dls~osal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $ 2,948,382 $17,850,055 $2,332,281 $ 636,201 Cash paid to suppliers of goods or services [1,722,492] [7,552,182] [1,616,344] [391,100] Cash paid to employees [454,426] [2,945,574] [696,074] [386,401] Other operating receipts 24,491 456,956 424 50.180 Net cash provided by [used in] operating activities 795,955 7,809,255 20,287 [91,120) Cash flows from capital and related financing activities Purchase and construction of capital assets [23,446] [11.886,827] [139,452] Capital contributions 3,803,565 Debt Issuance costs Incurred [315,426] Proceeds from sale of capital assets 2.550 30,000 Principal payments -general obligation bonds [697,396] [691,410] Principal payments -revenue bonds [1,580,000] Proceeds from Issuance of revenue bonds 16,193.925 Interest paid [136,908) [496,760) Net cash provided by [used In] capital and related financing activIties [857.750] 5.029,617 [1'09452] Cash flows from Investing activities Interest received 9.072 72,453 1,839 37 Cash flows from non capital financing actiVities Transfers In 47,228 Transfers [out] r180000) [2.030,000) Net cash provided by [used In] noncapltal financing activities [180,000) [2.030,000) 47.228 Net Increase [decrease] In cash and cash equivalents [232723] 10,881,325 [87,326] [43,855] Cash and cash eqUivalents, January 1 3,612,249 13,160,792 709.009 47,810 Cash and cash eqUivalents, December 31 $ 3.379,526 $ 24,042,117 $ 621,683 $ 3,955 The notes to the basIc financial statements are an Integral part of thiS statement 22 Total Internal Enterpnse Service Funds Funds $ 23,766,919 $ 9,786,038 [11,282,118] [8,955,819] [4,482,475] [631,488] 532,051 251,196 8,534.377 449,927 [12,049,725] 3,803.565 [315,426] 32,550 1,129 [1,388,806] [1,580,000] 16,193,925 [633,668) 4,062,415 1,129 83,401 8,445 47.228 60,000 [2,210,000] [2,162772) 60,000 10.517,421 519,501 17.529.860 2.569.706 $ 28,047.281 $ 3,089,207 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) Forthe Year Ended December 31,2011 Business-Type Activities: Enterprise Funds Total Internal Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Service Funds Operating Income [loss] $ 99,972 $ 5,397,121 $ 43,081 $ [138,675] $ 5,401,499 $ 516,376 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in accounts receivable [Increase] decrease in inventory Increase [decrease]m accounts payable Increase [decrease] in retalnage payable Increase [decrease]m accrued compensated absences Increase [decrease] In claims payable Increase [decrease] in landfill postclosure liabilities Increase [decrease] in net OBEB obligation Increase [decrease] In meter deposits payable Net cash provided by [used In] operating activities $ 740,047 44,011 [218,286] [12,979J [342J 133,066 10,466 795,955 $ 1,758,777 120,799 33,569 [79,017] [1,838] 31,950 [9,113] 35,620 [120,339] [1,394J 591,610 [1,806J [35,666] 19,536 49,984 14,250 4,957 25,016 7,809,255 $ 20,287 $ [91,120J The notes to the baSIC financial statements are an integral part of this statement 23 2,653,192 4,698 [36,844] 22,837 6,646 [304,399] 14,032 578,631 [18,278] 3,294 [95,119J 133,066 79,657 25,016 $ 8,534,377 $ 449,927 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2011 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 24 $ 313,300 $ 313,300 $ 313,300 $ 313,300 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLlC!ES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation govemed by a mayor and a five-member commission. These financial statements present only the primary government of the City. Its component units, entities forwhich the government is considered to be financially accountable, are not presented within these financial statements. Component Units That Are Not Presented City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) IS to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must Issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30,2011. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures That Are Not Presented Housing Authority of the City of Salina 469 S. 5th Salina, KS The City of Salina also participates with Saline County in two joint ventures, for which financial information is not presented. The Salina-Saline County Board of Health was organized by the City and County to promote public health. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint ventures. Separate financial statements are available from the governing boards of each jOint venture. Complete financial statements for each of the joint ventures may be obtained at the entity's administrative offices. Salina-Saline County Board of Health 125 West Elm Street Salina, KS 25 Salina County-City Building Authority 300 West Ash Street Salina, KS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-wide and fund financial statements The statement of net assets and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented In a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose. the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. 26 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The City applies all applicable Governmental Accounting Standards Board (GASB) pronouncements as well as the following pronouncements issued on or before November 30, 1989. unless those pronouncements conflict with or contradict GASB pronouncements: FASB Statements and Interpretations, APB Opinions, and ARBs. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker's compensation, health insurance, central garage and information services that are prOVided to other departments or agencies of the govemment, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General fund -To account for resources traditionally associated with govemment, which are not required legally, or by sound financial management to be accounted for in another fund. Flood and drainage improvement fund -To account for property tax revenues to be used for capital improvements to the flood control and stormwater drainage systems. Tourism and convention fund -To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or Improvement of streets within the City. Bicentennial Center fund -To account for the activities of the City's convention center. Sales tax capital fund -To account for 87.5% of the 1/4 cent sales tax designated for capital, debt, and human services purposes. Debt service fund -To account for the accumUlation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. 27 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. The City reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the municipal golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Assets 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from ali funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the curren't portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). Ali other outstanding balances between funds are reported as "due to/from other funds" Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2012. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 28 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions In the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. InventOries and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property. plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assefS are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at COST or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and Improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 29 Years 50 5 -15 6 -10 30 -50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Assets (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Information Systems Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the Issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprretary fund types In the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs. are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 30 CITY OF SALINA; KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Assets (Continued) 8. Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund -balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Major Governmental Funds Flood & Tourism Other Total Drainage and Special Bicentennial Sales Tax Debt Capital Governmental Governmental General Improvement Convention Gas Center Capital ServIce ~ Funds Funds Fund Balances' Nonspendable for Inventory $ 89.716 $ $ $ $ $ 89716 Restricted for Public works 1,094,720 1.094,720 Public health and samtatlon 4 4 Culture and recreation 45.236 45.236 Planning and development 340473 298,015 638,488 Debt payments 1,285.130 547.999 1,833,129 Committed for Public safety [7,866) [7866) Culture and recreation 142,881 524.907 667788 Planning and development 6102 6.102 Cemetery 421.037 421.037 Capital Improvements 610134 [2477,564) 907,112 [960.318J AsSigned for ,General government 18450 18,450 Pubhcworks 36.755 907 323,023 360,685 Planntng and development 11.376 11.376 Capita! Improvements 226.235 787,437 2.868.416 50.000 3,932.088 Unassigned 3453.706 ------------3453.706 Total Fund Balances $ 3,836,238 $ 907 ~ $ 1,417,743 $ 142,881 $ 1,397.571 $ 1.285,130 ~ 2.792.546 $ 11,604.341 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Assets (Continued) 9. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 10. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1 . Preparation of the budget for the succeeding year on or before August 1 . 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published In the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2011 budget was amended for the Flood & Drainage Improvement Fund, Sales Tax Capital Fund, Water and Sewer Fund, Risk Management Fund and Central Garage Fund. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, non-major debt service funds, trust funds, and the following special revenue funds: Bicentennial Center Event, HUD Community Development, Community Development Revolving, Heritage Commission, CDBG-ED, HOME V, Special Law Enforcement, Police Grants, DARE Donations, War Memorial Maintenance and Federal Care Grant. A legal operating budget is not required for the following Enterprise funds: Solid Waste Construction, Water and Sewer Principal and Interest, Water and Sewer Bond Reserve, Water and Sewer Construction and Reserve funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of Internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2011 in the Flood & Drainage Improvement Fund and Sales Tax Economic Development Fund, which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31,2011, the statutory limit for the City was $133,379.948, providing a debt margin of 75,990,305. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 ~"ote 3. RESTATEMENT OF EQUITY The implementation of GASB 54 required the reclassification of the governmental fund balances. The following is the reclassification of fund balance as of December 31, 2010. Fund Balance Classification As of December 31,2010 Unreserved Reserved Total Governmental Fund: General Fund $ 3,517,895 $ 99,286 $ 3,617,181 Flood & Drainage Improvement Fund 187,350 1,176 188,526 Tourism and Convention Fund 367,197 367,197 Special Gas Fund 986,224 498,417 1,484,641 Bicentennial Center Fund 46,048 46,048 Sales Tax Capital Fund 1,572,216 582,151 2.154,367 Debt Service Fund 571,873 571,873 Capital Projects Fund [6,654,370] 4,044,369 [2,610,001] Other Governmental Funds 2,365.603 616,049 2.981.652 Total Governmental Funds $ 2,388,163 $ 6,413,321 $ 8,801,484 Fund Balance Classification As of December 31,2010 Reclassified NonsQendable Restncted Committed Assigned Unassigned Total Governmental Fund General Fund $ 87.238 $ $ $ 99,286 $ 3,430,657 $ 3.617,181 Flood & Drainage Improvement Fund 187,350 1,176 188,526 Tourism and Convention Fund 367,197 367,197 Special Gas Fund 986,224 498,417 1,484,641 Bicentennial Center Fund 46,048 46,048 Sales Tax Capital Fund 1,572,216 582.151 2,154,367 Debt Service Fund 571.873 571,873 Capital Projects Fund [6,654,370] 4,044.369 [2,610,001] Other Governmental Funds 944,240 2,031,076 6,336 2,981.652 Total Governmental Funds $ 87,238 $ 2,869,534 $ [2,817,680) $ 5,231,735 $ 3,430,657 $ 8,801,484 Following the close of the previous fiscal year, it was discovered that several capital assets were misclassified or recorded incorrectly. Additionally, it was discovered that accounts receivable had not been properly recorded. Accordingly, the beginning net assets balances were restated, the effects of which are as follows: Net Assets/Fund Balance, December 31,2010 Capital Asset Adjustment Accounts Receivable Adjustment Net Assets/Fund Balance, December 31,2010, Restated Solid Waste Water and Golf Centra! Governmental General D'lsposal Sewer Sanitation Course Garage Activities Fund Fund Fund Fund Fund Fund $ 117,797,911 $ 3,617,181 $ 3,895,812 $ 58,578,036 $ 1,159,149 $ 304,622 $ 205,887 956,001 762 [19,712] [11,485] [287J 3,582 156,424 156,424 $ 118,910,336 $ 3,773,605 $ 3,896,574 $ 58.558,324 $ 1,147,664 $ 304,335 $ 209,469 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other Investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's investors service or Standard and Poor's corporation, and various other investments as specified in KSA 10-131. At December 31,2011, the City has the following investments: Investment Type Kansas Municipal Investment Pool U.S. Government Securities Total fair value Fair Value $ 305,158 S&P AAAf/S1+ 22,063,739 N/A $ 22,368,897 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature State pooled mOnies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment baSis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal antiCipated cash flow needs. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. B. Receivables Receivables as of year end, including the applicable allowances for doubtful accounts, are as follows: Primary Government Receivables. Accounts Taxes Interest Gross receivables Less' allowance for uncollectibles Total Primary Government Receivables Accounts Taxes Interest Gross receivables Less' allowance for uncollectlbles Total General $ 2,889,545 8,094,093 35,877 11,019.515 [2.211,730J $ 8,807.785 Tourism and Special Convention Gas $ 338,271 $ 312.648 338,271 ·312,648 $ 338.271 $ 312,648 Other Governmental Sanitation $ 52.151 $ 201,973 52151 201.97:'5 [982J [62,801J $ 51,169 $ 139,172 36 Bicentennial Debt Center Service Subtotal $ 54,966 $ $ 3,282.782 2,441,349 10,848,090 35,877 54,966 2,441.349 14,166,749 [2.211,730J $ 54,966 $ 2,441,349 $ 11,955.019 Solid Water Waste and Disposal Sewer Total $ 231,123 $ 1.489,511 $ 5,257,540 10,848,090 16 35.893 231.139 1,489,511 16,141,523 [463,147J r2.738.660J $ 231,139 $ 1,026,364 $ B 402.863 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) C. Interfund Receivables and Payables The composition of interfund balances as of December 31, 2011, is as follows: Fund Types Due From Due To General Fund $ 9,375 $ Other Government Funds 9,375 $ 9,375 $ 9,375 The City uses interfund receivables and payables as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31,2011, was as follows: Balance Adj. Bal Balance 12/31/2010 Adlustments 12/31/2010 Additions Retirements 12/31/2011 City governmental activities Governmenta I activities Capital assets, not being depreciated Construction In progress $ 32,549,155 $ 81,670 $ 32,630,825 $ 2.945,099 $ 3.021,567 $ 32,554.357 Land 22,477,191 22,477,191 22477,191 Capital assets, being depreciated Infrastructure 144,316,296 144.316,296 1.829,401 146.145.697 Buildings and improvements 36,233,800 36,233,800 36,233,800 Vehicles 7,480,033 810.889 8,290,922 255,156 216,023 8.330,055 Equipment, furniture and fixtures 5,353.682 92,755 5,446,437 246.676 235.912 5,457.201 Total capital assets 248410,157 985,314 249,395,471 5,276,332 3,473,502 251.198.301 Less accumulated depreciation for. Infrastructure 60,603,797 [30,296J 60,573,501 2,964,133 63.537.634 Buildmgs and Improvements 12,609,132 10,741 12,619.873 1.023.364 13.643.237 Vehicles 5,035,374 [40,529J 4,994845 513,718 174.927 5.333,636 Equipment, furniture and fixtures 4.039,705 89.397 4.129.102 228.844 188.665 4.169.281 Total accumulated depreciation 82,288.008 29.313 82,317321 4,730.059 363.592 86,683.788 Governmental activities capital assets. net 166.122,149 $ 956,001 $ 167,078.150 $ 546.273 $ 3,109.910 $ 164,514.513 Business-type activities. Capital assets, not being depreciated Construction In progress $ 1.516,604 $ $ 1,516,604 $ 10,781,482 $ 1,236,031 $ 11,062,055 Land 1,541,002 1,541.002 1,541,002 Capital assets, bemg depreciated I nfra structure 68.957.665 11.932 68,969,597 2.333,997 71,303,594 Buildings and Improvements 22,587,106 22,587.106 22,587,106 Vehicles 2,987,740 [41,385J 2,946.355 139.452 102,647 2,983.160 EqUipment, furniture and fixtures 4.376.725 27.010 4,403.735 30,824 4.434.559 Total capital assets 101,966.842 [2443J 101,964,399 13,285,755 1.338,678 113.911.476 Less accumulated depreCiation for Infrastructure 28.973,288 [34,750J 28,938.538 1,774,866 30,713404 Bui/dlngs and Improvements 10,241,870 17,027 10,258.897 424,276 10,683,173 Vehicles 2,084,391 9,460 2,093,851 179,756 102,647 2,170.960 EqUlprnent, furniture and fixtures 2,394,356 36,542 2,430,898 274.294 2,705,192 Total accumulated depreciation 43.693,905 28,279 43.722184 2653192 102,647 46,272.729 BUSiness-type activities capital assets. net $ 58,272.937 $ [30,722) $ 58.242.215 $ 10632.563 $ 1.236,031 $ 67.638,747 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City's depreciation expense was charged to governmental functions as follows: E. Long-Term Debt Governmental Activities: General government Public safety Public works Public health Culture and recreation Planning and development Total depreciation Business-type Activities: Solid Waste Disposal Water and Sewer Sanitation Golf Course Division Total depreciation $ 8,990 507,826 3,265,341 38,013 803,772 106,117 $ 4,730,059 $ 740,047 1,758,777 120,799 33,569 $ 2,653,192 Following is a summary of changes In long-term debt for fiscal year 2011 : Balance January 1, 2011 Additions Deletions Governmental activities' General obligation bonds $ 53,120,953 $ 6,587,986 $ 4,483,269 Accrued compensation 3,230,488 440,340 581,694 Temporary notes 2,500,000 3,400,000 2,500,000 Total $ 58,851,441 $ 10,428,326 $ 7,564,963 BUSiness-type actiVities, General obligation bonds $ 8,614,577 $ -$ 1,396,670 Revenue bonds 1,580,000 16,193,925 1,580,000 Accrued compensation 667,768 104,025 122,302 Total $ 10,862,345 $ 16,297,950 $ 3,098,972 39 Balance December 31, 2011 $ 55,225,670 3,089,134 3,400,000 $ 61,714,804 $ 7,217,907 16,193,925 649,491 $ 24,061,323 Amounts Due Within One Year $ 5,051,038 581,694 3,400,000 $ 9,032,732 $ 1,200,048 343,696 122,301 $ 1,666,045 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government Original Interest Bonds General Obligation Bonds Issue Rates Outstanding Internal Improvements 2002B, due 10/1/2017 $ 1,980,000 2.70% to 4.50% $ 165,000 Internal Improvements 2003A, due 10/1/2018 4,350,000 2.13% to 3.85% 1,765,000 Refunding 2004A, due 8/1/2015 5,585,000 2.10% to 4.00% 1,170,000 Internal Improvements 2004B, due 10/1/2019 4,053,000 3.00% to 4.00% 1,390,000 Internal Improvements 2005A, due 10/1/2020 4,210,000 2.95% to 4.25% 2,200,000 Internal Improvements 2006A, due 10/1/2026 2,200,000 3.55% to 5.50% 1,650,000 Internal Improvements 2006B, due 10/1/2021 885,000 4.00% to 4.50% 535,000 Internal Improvements 2007 A, due 10/1/2027 6,545,000 4.25% to 4.625% 5,085,000 Internal Improvements 2008A, due 10/1/2023 3,720,000 3.25% to 4.00% 3,000,000 Internal Improvements 2008B, due 7/1/2028 3,525,000 3.65% to 5.00% 3,415,000 Internal Improvements 2009A, due 10/1/2029 23,695,000 2.00% to 5.00% 21,877,424 Internal Improvements 201 OA, due 10/1/2025 6,916,592 2.00% to 3.875% 6,138,819 Internal Improvements 201 OB, due 10/1/2023 7,973,044 0.50% to 3.00% 7,464,348 Internal Improvements 2011A, due 10/1/2031 6,587,985 2.00% to 5.00% 6,587,986 Total general obligation bonds $ 62,443,577 Revenue Bonds Revenue 2011, due 10/1/31 $ 16,193,925 2.00% to 4.60% $ 16,193,925 Total revenue bonds $ 16,193,925 Temporary Notes Series 2011-1, due 8/1/2012 $ 3,400,000 0.40% $ 3,400,000 Total revenue bonds $ 3,400,000 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2012 $ 6,251,086 $ 2,299,881 $ 8,550,967 2013 6,286,086 2,026,639 8,312,725 2014 5,961,086 1,802,699 7,763,785 2015 5,161,086 1,611,107 6,772,193 2016 5,001,086 1,440,080 6,441,166 2017-2021 19,865,428 4,617,544 24,482,972 2022-2026 10,541,564 1,805,185 12,346,749 2027-2031 3,376,155 307,047 3,683,202 Total $ 62,443,577 $ 15,910,181 $ 78,353,758 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prima!:i Government Bonds Interest Year Outstanding Due Total 2012 $ 343,696 $ 596,991 $ 940,687 2013 623,696 590,191 1,213,887 2014 633,696 577,791 1,211,487 2015 643,696 565,191 1,208,887 2016 663,696 549,191 1,212,887 2017-2021 3,638.480 2,433,862 6,072,342 2022-2026 4,323,480 1,738,821 6,062,301 2027-2031 5,323.485 743,320 6,066,805 Total $ 16,193,925 $ 7,795,358 $ 23,989,283 Annual debt service requirements to maturity for temporary notes -to be paid through the Issuance of genera! obligation bonds: Tempora!:i Notes -Prima!:i Government Bonds Interest Outstanding 2012 $ 3,400,000 $ 14,204 ,,;;.$ =...=;.3,~4.;.,14;.;,;,2=0==4 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Conduit debt. The City has entered into several conduit debt arrangements wherein the City issues industrial revenue bonds to finance a portion of the construction of facilities by private enterprises. In return, the private enterprises have executed mortgage notes or leases with the City. The City is not responsible for payment of the original bonds, but rather the debt is secured only by the cash payments agreed to be paid by the private enterprises under the terms of the mortgage or lease agreements. Generally, the conduit debt is arranged so that payments required by the private enterprises are equal to the mortgage payments schedule related to the original debt. At December 31,2011, total outstanding conduit debt was $86,472,423. Defeased debt. In prior years, the City has defeased certain other outstanding debt obligations by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust accounts and the defeased bonds are not included in the City's financial statements. At December 31,2011, the City had $325,000 of outstanding defeased debt. F. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $ 868,838 $ 997,949 Flood and drainage improvement fund 907 Tourism and convention fund 596,440 SpeCial gas fund 180,000 1,836 Bicentennial center fund 872,849 Sales tax capital fund 8,558 3,501,556 Debt service 2,225,565 83,488 Capital projects fund 3,289,564 405,549 Other governmental funds 547,389 105,259 Agency funds 198,821 Solid waste disposal fund 180,000 Water and sewer fund 2,030,000 Golf course fund 47,228 Central garage fund 60,000 Total Transfers $ 8,100,898 $ 8,100,898 The City uses interfund transfers to share administrative costs between funds. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Plan description. The City participates in the Kansas Public Employees Retirement System (KPERS) and the Kansas Police and Firemen's Retirement System (KP&F). Both are cost-sharing multiple-employer defined benefit pension plans as provided by Kansas statutes (KSA 74-4901 et seq). KPERS and KP&F provide retirement benefits, life insurance, disability income benefits and death benefits. Kansas law established and amends benefit provisions. KPERS and KP&F issue a publicly available financial report that includes financial statements and required supplementary information. Those reports may be obtained by writing to 611 South Kansas, Suite 100; Topeka, Kansas 66603 or by calling 1-888-275-5737. Funding Policy. K.S.A. 74-4919 establishes the KPERS member-employee contribution rate at up to 6% of covered salary. K.SA 74-4975 establishes the KP&F member-employee contribution rate at 7% of covered salary. The employer collects and remits member-employee contributions according to the provisions of section 414 (h) of the Internal Revenue Code. State law provides that the employer contribution rates be determined annually based on the results of an annual actuarial valuation. KPERS and KP&F are funded on an actuarial reserve basis. State law sets a limitation on annual increases in the employer contribution rates. The KPERS employer rate was 6.96% from January 1 to December 31, 2011. The City employer contributions to KPERS for the years ending December 31, 2011, 2010, and 2009 were $987,826, $1,039,728 and $831,493, respectively, equal to the required contributions for each year. The KP&F employer rate established for fiscal years beginning in 2011 is 17.68%. Employers participating in KP&F also make contributions to amortize the liability for past service costs, if any, which are determined separately for each participating employer. The City's contributions to KP&F for the years ended December 31, 2011, 2010, and 2009 were $1,787,801, $1,664,356 and $1,769,379, respectively, equal to the reqUired contributIOns for each year. B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (l.R.e. Section 125) The City Commission has adopted by resolution a salary reduction fleXible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various Insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $172,545 is considered to be due within one year. Changes in the balances of claims liabi!ities during the past two years are as follows: 2011 2010 Unpaid claims, January 1 $ 425,582 $ 372,610 Incurred claims (including IBNRs) 126,625 409,801 Claim payments [230,417] [356,829] Unpaid claims, December 31 $ 321,790 $ 425,582 The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: Unpaid claims, January 1 Incurred claims (Including IBNRs) Claim payments Unpaid claims, December 31 44 2011 2010 $ 382,502 $ 421,530 4.229,571 4,198,012 [4220,898J [4,237,040J $ 391,175 $ 382,502 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATION (Continued) E. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31,2011. Project N Ohio Grade Separation Bicentennial Improvements Markley, Magnolia, Valleyview Sanitary Sewer Improvements and Manhole and Wastewater Pump Station Rehabilitation Grand Prairie Addition Magnolia Commons South 9th Corridor, Phase IV Scoular Addition Waterline Imp. Stone Creek Addition Riffel # 2 Infrastructure East Magnolia Road Replacement Aviation Service Center Fire Station # 1 Authorization $ 6,617,581 2,500,000 5,150,000 i ,618,096 3,415,564 6,500,000 75,453 440,193 977,917 4,500.000 5,500,000 1,787,000 Expenditures $ 6,523,786 2,505,636 1,070,277 1,479,406 3,003,051 6,201,014 48,673 324,404 893,024 432,128 3,737,322 226,131 Project overages in the Bicentennial Improvements project will be reimbursed by special sales tax proceeds. F. Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31,2011. The City IS a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City G. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $2.042,254 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 29.5% of the estimated capacity of the landfill. 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) G. Municipal Solid Waste Landfill (Continued) The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,891,330 as the remaining estimated capacity is filled over the remaining life expectancy of 68.8 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2011. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and postclosure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department 'of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the Issuance of general obligation bonds, if necessary'. H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remedlate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the City on or about September 9, 1966. The property is now known to contam areas of extensive soil and groundwater contamination, which IS a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the City IS potentially liable under CERCLA, although the City believes that It has meritorious defenses to such liability. The City is under no administrative orders from the EPA or KDHE. The City is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Salina Airport Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University at Salina) (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14,2009 the City was notified that the Corp referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May, 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count III Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a cohflict of interest. The Salina Public Entities' claims under Counts III and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b )(3). 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Since the lawsuit remains pending without a final settlement, the City intends to vigorously pursue its claims and contest the claims brought against it. Based on presently known information, the City has determined that while a possible liability exists, at this time no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Postemployment Health Care Plan Plan Description. The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local govemmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. Plan participants contributed approximately $229,000 to the Plan (approximately 100% of total premiums) through their required contribution of $425 per month for retiree-only coverage and $1,141 for family coverage. Annual OPES Cost and Net OPES Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the Plan for the year, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the Plan: Annual required contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB cost (expense) Benefit payments Change In net OPEB obligation Net OPES obligation -beginning of year Net OPES obligation -end of year 48 $ 961,335 95,743 [79,786] 977,292 229,000 748.292 2,393,591 $ 3,141,883 CITY OF SALINA, KANSAS NOTES TO THE SASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) The City's annual OPES cost, the percentage of annual OPES cost contributed to the Plan, and the net OPES obligation for the year ended December 31,2011 was as follows: Annual Fiscal Annual OPES Net Year OPES Cost OPES Ended Cost Contributed Obligation December 31,2008 $ 910,418 $ 96,672 $ 813,746 December 31,2009 957,353 100,000 1,671,099 December 31,2010 921,492 199,000 2,393,591 December 31,2011 977,292 229,000 3,141,883 Funding Status and Funding Progress. As of the year ended December 31, 20~ 1, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $9,019,806 and the actuarial value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $9,019,806. The covered payroll (annual payroll of active employees covered by the plan) was $21,942,428, and the ratio of the UAAL to the covered payroll was 41.11 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the year ended December 31, 2011, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.00% investment rate of return, which is the rate of the . employer's own investments as there are no plan assets and an initial annual medical and dental healthcare cost trend of 9.30%, reduced by decrements to an ultimate rate 4.70% after eighty-two years. The UAAL IS being amortized as a level dollar over an open thirty-year period. 49 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION December 31,2011 Schedule of Employer Contributions: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31,2008 $ 910,418 $ 96,672 $ 813,746 December 31,2009 957,353 100,000 1,671,099 December 31,2010 921,492 199,000 2,393,591 December 31, 2011 977,292 229,000 3,141,883 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued AAL Ratio Payroll Date Assets (a} Liabilit~ (b} (b} -(a} (alb} f£l 12/31/2008 $ $ 8,917,346 $ 8,917,346 0.0% $ 21,874,112 12/31/2009 8,917,346 8,917,346 0.0% 22,397,996 12/31/2010 9,019,806 9,019,806 0.0% 22,613,236 12/31/2011 9.019,806 9,019,806 0.0% 21,942,428 50 UAAL as Percent of Payroll (b-a}/(c} 40.77% 39.81 % 39.89% 41.11% CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 7,564,507 $ 7,359,721 $ 7,359,721 Delinquent taxes 212,244 292,488 292,488 Motor vehicle taxes 723,857 937,258 937,258 General sales tax 11,767,400 11,716,000 11,716,000 Other taxes 4,221,302 4,585,000 4,585,000 Total taxes 24,489,310 24,890,467 24,890,467 Charges for services General charges 144,556 General government 340 8,912 8,912 PubliC safety 3.465,106 4,505,812 4,505.812 Public works 261,707 156,904 156,904 Health and sanitation 51,838 62,300 62.300 Culture and recreation 1,324,551 1,295,614 1.295,614 Community and economic development 10.368 9,982 9,982 Total charges for services 5,258.466 6.039,524 6,039.524 Operating grants. restricted General grants 153.566 185,000 185.000 PubliC safety 631.417 837,000 837,000 Community and economic development 28.202 Total operating grants, restncted 813,185 1.022.000 1.022.000 Operating grants, unrestricted General grants 2,500 503 503 Public works 250 3,000 3,000 Culture and recreation 8,241 18,000 18.000 Total operating grants, unrestricted 10,991 21,503 21.503 Interest Income General interest 15,749 65,000 65,000 Total Interest Income 15.749 65,000 65,000 Interfund services proVided General services 1,392,161 918,017 918,017 General government 2,532,316 1,755.876 1.755,876 Community and economic development 63.340 50.501 50.501 Total interfund services provided 3,987,81 7 2,724.394 2,724,394 Mlscelianeous revenues General miscellaneous revenues 118,112 134,321 134.321 General government 90 Public safety 185,054 199,000 199,000 PubliC works 4,134 10,000 10,000 Culture and recreation 16,439 25,000 25,000 Total miscellaneous revenues 323,829 368.321 368.321 Proceeds of capital assets General sales 30,000 30,000 Public safety 200 Total proceeds of capital assets 200 30,000 30,000 Total revenues 34.899,547 35,161,209 35,161,209 See Independent auditor's report on the financial statements. 51 Vanance with Final Budget Positive [Negative] $ 204,786 [80,244] [213,401] 51,400 [363,698) [401,157) 144,556 [8,572] [1,040.706] 104,803 [10,462] 28,937 386 [781.058) [31,43Ll] [205,583) 28.202 [208,815) 1,997 [2.750] [9,759) [10.512) [49.251) [49,251) 474 144 776,440 12,839 1,263.423 [16.209) 90 [13,946) [5,866] [8,561) [44,4921 [30,000] 200 [29,800) [261,662] CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND (Continued) For the Year Ended December 31, 2011 Budgeted Amounts Actual -Original Final Expenditures General Government City commission $ 102,880 $ 112.383 $ 112.383 City manager 505,962 555,736 555,736 Legal 381,704 305,300 305,300 Finance 617,575 553,074 553,074 Human resources 374,387 350,007 350,007 Other general government 1,198,470 987,080 987.080 Contingencies 20,884 50,000 50,000 Total general government 3,201,862 2,913,580 2,913,580 Public Safety Police 8,409,519 8,307,450 8,307,450 Municipal court 1,430,676 1,625,516 1,625,516 Fire 8,166,268 7,763,377 7,763,377 Total public safety 18,006,463 17,696,343 17,696,343 Public Works Buildings and general Improvements 1,005,385 1,253,194 1,253,194 Engineering 997,558 980,799 980,799 Streets 1,759,697 1,826,158 1,826,158 Flood works 203,126 221,058 221,058 Traffic control 743,165 819,062 819,062 Parks 1,409,829 1,444,930 1,444,930 ADA compliance 6,440 15,000 15,000 Total public works 6,125,200 6,560,201 6,560,201 Public Health and Sanitation Cemetery 157,981; 146,827 146,827 Health department 1,018,101 ' 967,138 967,138 Total public health and sanitation 1.176,082 1.113,965 1.113,965 Culture and Recreation SWimming pools 430,322 419,838 419,838 Neighborhood centers 41,773 46,233 46,233 Recreation 1.810.910 1.640,473 1,640,473 Arts and humanities 1,079 Smoky Hill museum 448,463 435.263 435,263 Total culture and recreation 2,732,547 2,541,807 2,541,807 Community Development Human relations 330,092 337,809 337,809 Development services 1,215,034 1,332,930 1,332,930 Agency contracts 771.970 783,921 783.921 Total community development 2.317,096 2,454,660 2,454,660 Capital Outlay Capital outlay 867,777 876.345 876,345 Cash Reserve 4,354,391 4,354,391 Total expenditures 34,427.027 38,511,292 38,511,292 Excess [deficiency] of revenues over [under] expenditures 472,520 [3,350,083] [3,350,083) See independent auditor's report on the financial statements. 52 Variance with Final Budget Positive [Negative] $ 9,503 49,774 [76,404] [64,501] [24,380] [211,390] 29,116 [288,282J [102,069] 194,840 [402,891J [310,120J 247,809 [16,759] 66,461 17,932 75,897 35,101 8.560 435,001 [11,154] [50,963) [62.117) [10,484] 4,460 [170,437] [1,079] [13,200) [190,740J 7,717 117,896 11,951 137,564 8.568 4,354,391 4,084,265 3,822,603 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND (Continued) For the Year Ended December 31,2011 Budgeted Amounts Other financing sources [uses] Transfer In Transfer [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 Prior year cancelled encumbrances $ Actual Onglnal 168,838 $ 500,000 [997,949) [994,358] [829.111) [494,358) [356.591] [3,844,441] 2,918,651 3,978,485 7,140 Unreserved fund balance. December 31 2,569,200 $ 134,044 Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance. December 31 35,877 677.815 8,094,093 89,716 [7,923,279) 292.816 $ 3.836,238 See independent auditor's report on the finanCial statements. 53 Final $ 500,000 [994,358] [494.358J [3,844,441] 3,978.485 $ 134.044 Variance with Final Budget Positive [Negative] $ [331,162] [3,591) [334,753) 3,487,850 [1,059,834] 7.140 $ 2.435,156 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) FLOOD AND DRAINAGE IMPROVEMENT FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Final Revenues Taxes Delinquent taxes $ 6,016 $ 2,268 $ 6,020 Total taxes 6,016 2,268 6,020 Interest income General interest 138 138 Total interest income 138 138 Miscellaneous revenues General miscellaneous revenues 11,550 8,064 Total miscellaneous revenues 11,550 8,064 Total revenues 17,566 2,406 14,222 Expenditures Capital Outlay 205,823 11,130 200,000 Total expenditures 205,823 11,130 200,000 Excess [deficiency] of revenues over [under) expenditures [188,257] [8,724) [185,778) Other financing sources [uses] Transfer in 907 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [187,350] [8,724] [185,778] Unreserved fund balance, January 1 187,350 8,724 187,350 Unreserved fund balance, December 31 -$ -$ 1,572 Reconciliation to GAAP Current year encumbrances 907 GAAP Fund Balance, December 31 $ 907 See independent auditor's report on the financial statements. 54 Variance with Final Budget Positive [Negative] $ [4) [4) [138) [138J 3,486 3,486 3,344 [5,823) [5,823) [2,479) 907 [1,572] $ [1,572) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31,2011 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Revenues Taxes Other taxes $ 1,332,827 $ 1,350,000 $ 1,350,000 $ [17,173J Interest income General interest Total revenues Expenditures Community Development Tourism Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfer [out] Excess [deficiencyJ of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 143 143 1,332,970 1,350,000 1,350,000 [17,030] 736,386 751.664 751,664 15,278 736,386 751.664 751,664 15,278 596,584 598,336 598,336 [1,752] [596,440] [600,000J [600,000J 3,560 144 [1,664] [1,664J 1,808 __ -=2:cc..;,0c..;:,5-=-8 1,664 1,664 394 Unreserved fund balance, December 31 2,202 $ -$ -$ 2.202 .;;,.,.",~==~ Reconciliation to GAAP Accounts receivable 338.271 GAAP Fund Balance, December 31 $ 340.473 See independent auditor's report on the financial statements. 55 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Operating grants, restricted Public works $ 1,366,522 $ 1,460,382 $ 1,460,382 Interest income General interest 3,718 6,000 6,000 Total revenues 1,370,240 1,466,382 1,466,382 Expenditures Public Works Streets 426,084 425,395 425,395 Capital Outlay 1,401,756 1,886,116 1,886,116 Cash Reserve 500,000 500,000 Total expenditures 1,827,840 2.811,511 2,811,511 Excess [deficiency] of revenues over [under] expenditures [457,600) [1.345,129) [1,345,129) Other financing sources [uses] Transfer in 180,000 180,000 180,000 Transfer [out] [1,836) Total other financing sources [uses] 178,164 180,000 180,000 Excess [deficiency) of revenues and other sources over [under] [279,436) [1,165,129) [1,165,129) expenditures and other [uses] Unreserved fund balance. January 1 735,009 1,165,129 1,165,129 Prior year cancelled encumbrances 370,888 Unreserved fund balance, December 31 826,461 $ -$ -Reconciliation to GAAP T axes receivable 312,648 Retainage payable [44,389] Current year encumbrances 323,023 GAAP Fund Balance, December 31 $ 1,417,743 See independent auditor's report on the financial statements. 56 Variance with Final Budget Positive [Negative] $ [93,860] [2,282) [96,142) [689] 484,360 500,000 983,671 887,529 [1,836) [1,836) 885,693 [430,120J 370,888 $ 826,461 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Charges for services Culture and recreation $ 772,480 $ 1,379,500 $ 1,379,500 Interest income General interest 193 3,500 3,500 Miscellaneous revenues General miscellaneous revenues 692 Total revenues 773,365 1,383,000 1,383,000 Expenditures Culture and Recreation Bicentennial Center 1,548,901 1,902,262 1,902,262 Capital Outlay 11,028 532,850 532,850 Cash Reserve 329,400 329,400 Total expenditures 1,559,929 2,764,512 2,764,512 Excess [deficiency] of revenues over [under] expenditures [786,564) [1,381,512) [1,381,512) Other financing sources [uses] Transfer in 872,849 875,000 875,000 Total other financing sources [uses] 872,849 875,000 875.000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 86.285 [506,512] [506.512] Unreserved fund balance, January 1 1.630 506.512 506,512 Unreserved fund balance, December 31 87,915 $ -$ -Reconciliation to GAAP Accounts receivable 54,966 GAAP Fund Balance, December 31 $ 142,881 See independent auditor's report on the financial statements. 57 Variance with Final Budget Positive [Negative] $ [607,020] [3,307] 692 [609,635) 353,361 521,822 329,400 1,204,583 594,948 [2,151) [2,151] 592.797 [504,882) $ 87,915 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales tax $ 3,763,045 $ 3,686,500 $ 3,686,500 Interest income General interest 5,683 20,000 20,000 Total revenues 3,768,728 3,706,500 3,706,500 Expenditures General Government Other general government 155,000 Capital Outlay 2,371,778 1,805,000 3,130,211 Cash Reserve 185,580 Total expenditures 2,371,778 1,990,580 3.285,211 Excess [deficiency] of revenues over [under] expenditures 1,396,950 1,715,920 421,289 Other financing sources [uses] Transfer in 8,558 Transfer [out] [2,367,590J [2,000,000J [2,000,000J Total other financing sources [uses] [2,359,032J [2,000,000J [2,000,000J Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [962,082] [284,080] [1,578,711] Unreserved fund balance, January 1 1,572,216 284,080 1,578,711 Unreserved fund balance, December 31 610,134 $ -$ -Reconciliation to GAAP Current year encumbrances 787,437 GAAP Fund Balance, December 31 $ 1,397,571 See independent auditor's report on the financial statements, 58 Variance with Final Budget Positive [Negative] $ 76,545 [14,317J 62,228 155,000 758,433 913,433 975,661 8,558 [367,590J [359,032) 616,629 [6,495J $ 610,134 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Bicentennial center event fund -To account for the revenues and expenses associated with special events (concerts, shows, etc.) at the City's convention center. HUD "community development fund -To account for grants received from the state to be used for housing or economic development purposes. Community development revolVing fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolVing basis. Heritage commission fund -To account for revenues and expenses associated with heritage preservation activities Sales tax economic development fund -To account for 12.5% of the 1/4 cent sales tax designated for economic Development purposes. Fair housing fund -To account for grants received from the federal government to be used to monitor and mediate fair hOUSing complaints. CDBG ED fund-To account for grants received from the federal government to be used for economic development loans to qualifying businesses. HOME V fund -To account for grants received from the state government to be used for housing rehabilitation. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund -To account for revenues from grants, which are to be used for special police activities, including the DAR.E. program DAR.E. donations fund -To account for donations to the DARE program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE Grant -To account for revenue and expenses associated with the CARE Grant. 59 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year 2076. 60 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NON MAJOR GOVERNMENTAL FUNDS December 31,2011 Total Total Nonmajor Nonmajor Special Revenue Permanent Funds Funds $ 1,790,051 $ 426,741 51,169 $ 1,841,220 $ 426,741 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 14,039 $ -Due to other funds 9,375 Total liabilities 23,414 Fund balances: Restricted 343,255 Committed 1,424,551 426,741 Assigned 50,000 Total fund balances 1,817,806 426,741 Total liabilities and fund balances $ 1,841,220 $ 426,741 Nonmajor Debt Service Fund $ 556,603 $ 556,603 $ 8,604 8,604 547,999 547,999 $ 556,603 See independent auditor's report on the financial statements. 61 Total Nonmajor Governmental Funds $ 2,773,395 51,169 $ 2,824,564 $ 22,643 9,375 32,018 891,254 1,851,292 50,000 2,792,546 $ 2,824,564 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31. 2011 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 317,297 $ -$ -Intergovernmental 520,055 205,582 Charges for services 1,115,913 9,109 Licenses and permits 6,250 Investment revenue 5,394 1,177 49 Miscellaneous 72,293 Total revenues 2,037,202 10,286 205,631 EXPENDITURES Current Culture and recreation 1,616,170 Public health and sanitation 153,730 Planning and development 288,275 Miscellaneous 35 Debt service Principal retirement 25,000 110,000 Interest and other charges 4,399 157,345 Capital outlay 529,401 Total expenditures 2,616,975 35 267.345 Excess [deficiency] of revenues over [under] expenditures [579,773] 10,251 [61.714] Other financing sources [uses] Transfers in 547,389 Transfers [out] [105,259) Total other financing sources [uses] 442.130 Net change in fund balance [137.643] 10,251 [61,714] Fund balance -Beginning of year 1,955,449 416,490 609,713 Fund balance -End of year $ 1,817,806 $ 426,741 $ 547,999 See independent auditor's report on the financial statements. 62 Total Nonmajor Governmental Funds $ 317,297 725,637 1,125,022 6,250 6,620 72,293 2,253,119 1,616,170 153,730 288,275 35 135,000 161,744 529,401 2,884,355 [631,236] 547,389 [105,259) 442,130 [189,106] 2,981,652 $ 2,792,546 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NON MAJOR SPECIAL REVENUE FUNDS December 31,2011 Business Special Improvement Neighborhood Parks & Special District Park Recreation Alcohol ASSETS Cash and investments $ 1,611 $ 229,134 $ 45,236 $ 4 Receivables Accounts 51,169 Total assets $ 52,780 $ 229,134 $ 45,236 $ 4 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,611 $ -$ -$ Due to other funds Total liabilities 1,611 Fund balance: Restricted 51,169 45,236 4 Committed 229,134 Assigned Total fund balance [deficit] 51,169 229,134 45,236 4 Total liabilities and fund balances $ 52,780 $ 229,134 $ 45,236 $ 4 Bicentennial HUD Comm. Sales Tax Center Community Development. Heritage Economic Event $ 98,847 $ $ 98,847 $ $ -$ 98,847 98,847 $ 98,847 $ Dev. 71,880 $ 71,880 $ -$ 71,880 71,880 71,880 $ Revolving Commission Development 173,160 $ 173,160 $ -$ 173,160 173,160 4 $ 4 $ -$ 4 4 957,112 957,112 907,112 50,000 957,112 173,160 ..;..$ ___4 .;..$ _9 ;;....;5;...7.;..,1_1_2 See independent auditor's report on the financial statements. 63 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NON MAJOR SPECIAL REVENUE FUNDS (Continued) December 31,2011 Special Fair CDBG HOME Law Housing ED Y.. Enforcement ASSETS Cash and investments $ 5,181 $ 2,472 $ -$ 2,855 Receivables Accounts Total assets $ 5,181 $ 2,472 $ -$ 2,855 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 825 $ -$ -$ Due to other funds Total liabilities 825 Fund balance: Restricted 2,472 Committed 4,356 2,855 Assigned Total fund balance [deficit] 4,356 2,472 2,855 Total liabilities and fund balances $ 5,181 $ 2,472 $ -$ 2,855 $ $ $ $ Police Grants -$ -$ 2,012 $ 8,709 10,721 [10,721] [10,721] -$ War DARE Memorial Donations Maintenance 1,742 $ 35,262 $ 1,742 $ 35,262 $ -$ -$ 1.742 35,262 1,742 35,262 1,742 $ 35,262 $ Arts & Humanities 165,551 $ 165,551 $ 9,591 $ 9,591 155.960 155,960 165,551 $ Federal CARE Grant -$ -$ -$ 666 666 [666] [666J -$ Totals 1,790,051 51,169 1,841,220 14,039 9,375 23,414 343,255 1,424,551 50,000 1,817,806 1.841,220 See independent auditor's report on the financial statements. 64 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON MAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31,2011 Business Special Improvement Neighborhood Parks & Special District Park Recreation Alcohol Revenues Taxes $ -$ -$ -$ I ntergovern mental 153,566 153,566 Charges for services 83,467 Licenses and permits 6,250 Investment revenue 20 629 220 24 Miscellaneous 1.373 Total Revenues 83,487 6,879 155,159 153,590 Expenditures Current Culture and recreation Public health and sanitation 153,730 Planning and development 84,531 Debt service Principal retirement 25,000 Interest and other charges 4.399 CapItal outlay 99,817 Total Expenditures 84,531 129,216 153,730 Excess [deficiency] of revenues over [under] expenditures [1,044] 6,879 25,943 [140] Other financing sources [uses] Transfers in Transfers [out] [47,228) Total other financing sources [uses] [47,228] Net change In fund balance [1,044] 6,879 [21,285] [140J Fund balance, beginning of year 52,213 222,255 66,521 144 Fund balance, end of year $ 51.169 $ 229.134 $ 45,236 $ 4 Bicentennial Center Event $ -663,839 663,839 670,411 670,411 [6,572J [6,572J 105,419 $ 98,847 HUD Community Community Development Development Revolving $ -$ -200 526 200 526 200 526 [58,031J [58,031J 200 [57,505J 71,680 230.665 $ 71.880 $ 173.160 Heritage Commission $ -4 $ 4 Sales Tax Economic Development $ $ 317,297 2,485 319,782 406,075 406,075 [86,293J [86,293J 1,043,405 957.112 See independent auditor's report on the financial statements. 65 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31. 2011 Special Fair CDBG HOME Law Housing ED Y.. Enforcement Revenues Taxes $ -$ -$ -$ Intergovernmental 31,203 158,238 Charges for services Licenses and permits Investment revenue 59 36 Miscellaneous Total Revenues 31,262 158,238 36 Expenditures Current Culture and recreation Public health and sanitation Planning and development 69,571 133,437 Debt service Principal retirement Interest and other charges Capital outlay 18,132 Total Expenditures 69,571 133,437 18,132 Excess [deficiency) of revenues over [under] expenditures [38,309) 24,801 [18,096) Other financing sources [uses) Transfers in 58,031 Transfers [out) Total other financing sources [uses] 58,031 Net change in fund balance [38,309] 24,801 58,031 [18.096) Fund balance, beginning of yeal' 42,665 [22,329] [58,031J 20,951 Fund balance, end of year $ 4,356 $ 2,472 $ -$ 2,855 Police Grants $ -$ 5,377 5,377 [5,377J [5,377J [5,344J $ [10,721J $ War Federal DARE Memorial Arts & Care Donations Maintenance Humanities Grant Totals -$ -$ -$ -$ 317,297 23,482 520,055 368,607 1,115,913 6,250 5 101 1,089 5,394 70 70,850 72,293 75 101 464,028 2,037,202 797 944,962 1,616,170 153,730 70 666 288,275 25,000 4,399 529,401 70 797 944,962 666 2,616,975 5 [696J [480,934J [666] [579.773J 489,358 547,389 [105,259) 489,358 442,130 5 [696J 8,424 [666J [137,643J 1,737 35,958 147,536 1,955,449 1.742 $ 35,262 $ 155,960 $ [666J $ 1.817,806 See independent auditor's report on the financial statements. 66 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NON MAJOR PERMANENT FUNDS December 31,2011 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Cash and investments $ 419,040 $ 1,997 $ 5,704 Total assets $ 419,040 $ 1,997 $ 5,704 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ -$ -$ Total liabilities Fund balances Committed 419,040 1,997 5,704 Total liabilities and fund balances $ 419,040 $ 1,997 $ 5,704 See independent auditor's report on the financial statements. 67 Total $ 426,741 $ 426,741 $ 426,741 $ 426.741 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON MAJOR PERMANENT FUNDS For the Year Ended December 31. 2011 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 9,109 $ -$ Investment revenue 1,155 6 Total revenues 10,264 6 Expenditures Miscellaneous 35 Total expenditures 35 Net change In fund balance 10,229 6 Fund balances -beginning of year 408,811 1,991 Fund balances -end of year $ 419,040 $ 1,997 $ See independent auditor's report on the financial statements. 68 -16 16 16 5,688 5,704 Total $ 9,109 1,177 10,286 35 35 10.251 416,490 $ 426,741 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT CITY FUND For the Year Ended December 31,2011 Revenues Charges for services Community and economic development Interest income General interest Total revenues Expenditures Community Development Business Improvement District Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Actual' $ 84,511 20 84,531 84,531 84,531 Budgeted Amounts Onginal Final $ 90,000 $ 90,000 500 500 90,500 90,500 90,578 90,578 90,578 90,578 [78] [78] 78 78 Variance with Final Budget Positive [Negative] $ [5,489] [480J [5,969) 6,047 6,047 78 [78) Unreserved fund balance, December 31 -~$=======-~$======~-~$======= Reconciliation to GAAP Accounts receivable 51,169 GAAP Fund Balance, December 31 $ 51,169 See independent auditor's report on the financial statements. 69 Revenues Charges for services Public works Interest income General interest Total revenues Expenditures Cash reserve Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) NEIGHBORHOOD PARK FUND For the Year Ended December 31,2011 Budgeted .A.mounts Actual Original Final $ 6,250 $ 20,000 $ 20,000 629 4,000 4,000 6,879 24,000 24,000 258,146 258,146 258,146 258,146 Excess [deficiencyJ of revenues over [under] expenditures 6,879 [234,146] Unreserved fund balance, January 1 222,255 234,146 Unreserved fund balance/GAAP fund balance December 31 $ 229,134 $ -$ See independent auditor's report on the financial statements. 70 [234,146J 234,146 -Variance with Final Budget Positive [Negative] $ [13,750] [3,371} [17,121J 258,146 258,146 241,025 [11,891J $ 229,134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31,2011 Budaeted Amounts Actual Original Revenues Operating grants, restricted Culture and recreation $ 154,939 $ 160,000 $ Interest income General interest 220 4,000 Total revenues 155,159 164,000 Expenditures Debt Service Principal 25,000 10,000 Interest and other charges 4,399 Capital Outlay 93,481 100,000 Cash Reserve 131,197 Total expenditures 122,880 241,197 Excess [deficiency] of revenues over [under] expenditures 32,279 [77,197) Other financing sources [uses) Transfer [out) [47,228] [30,000) Total other financing sources [uses) [47,228) [30,000) Excess [deficiency] of revenues and other sources over [underJ expenditures and other [usesJ [14,949) [107.197J Unreserved fund balance, January 1 60,185 107,197 Unreserved fund balance/GAAP fund balance December 31 $ 45,236 $ -$ See independent auditor's report on the financial statements. 71 Final 160,000 4,000 164,000 10,000 100,000 131,197 241,197 [77,197] [30,000J [30,000) [107,197] 107,197 -Variance with Final Budget Positive [Negative] $ [5,061] [3,780) [8,841) [15,000] [4,399] 6.519 131,197 118,317 109,476 [17,228J [17228J 92,248 [47,012) $ 45,236 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPEC~LALCOHOLFUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Revenues Operating grants, restricted Health and sanitation $ 153,566 $ 160,000 $ Interest income General interest 24 Total revenues 153,590 160,000 Expenditures Public Health and Sanitation Special alcohol 153,730 170,192 Total expenditures 153,730 170.192 Excess [deficiency] of revenues over [under] expenditures [140] [10,192] Unreserved fund balance, January 1 144 10.192 Unreserved fund balance/GAAP fund balance December 31 $ 4 $ -$ See independent auditor's report on the financial statements. 72 Final 160,000 160,000 170,192 170.192 [10,192] 10,192 -Variance with Final Budget Positive [Negative] $ [6,434] 24 [6,410] 16,462 16,462 10,052 [10,048] $ 4 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Revenues Taxes Selective sales tax $ 317,297 $ 315,120 $ Interest income General interest 2,485 10,000 Total revenues 319,782 325,120 Expenditures Community Development Economic development 456,075 315,444 Cash Reserve 9,676 Total expenditures 456,075 325,120 Excess [deficiency] of revenues over [under] expenditures [136,293J Unreserved fund balance, January 1 1,043.405 Unreserved fund balance, December 31 907,112 $ -$ Reconciliation to GAAP Current year encumbrances 50,000 GAAP Fund Balance, December 31 $ 957,112 See independent auditor's report on the financial statements. 73 Final :>15,120 10,000 325,120 315,444 9,676 325,120 -Variance with Final Budget positive [Negative] $ 2,177 [7,515J [5,338J [140,631J 9,676 [130,955J [136,293] 1,043,405 $ 907,112 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) FAIR HOUSING FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Revenues Operating grants, restricted Community and economic development $ 31,203 $ 65,000 $ Interest income General interest 59 1,000 Total revenues 31,262 66,000 Expenditures Community Development Human relations 69,571 86,290 Total expenditures 69,571 86,290 Excess [deficiency] of revenues over [under) expenditures [38,309] [20,290] Unreserved fund balance, January 1 42,665 20,290 Unreserved fund balance/GAAP fund balance December 31 $ 4,356 $ -$ See independent auditor's report on the financial statements. 74 Final 65,000 1,000 66,000 86,290 86.290 [20,290) 20,290 -Variance with Final Budget Positive [Negative] $ [33,797) [941] [34,738] 16.719 16,719 [18,019] 22,375 $ 4.356 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Charges for services Culture and recreation $ 439,106 $ 371,904 $ 371,904 Operating grants, unrestricted Culture and recreation 23,482 18,000 18,000 Interest income General interest 1,089 2,000 2,000 Miscellaneous revenues Culture and recreation 350 20,095 20,095 Total revenues 464,027 411,999 411,999 Expenditures Culture and Recreation Arts and humanities 574,704 579,804 579,804 Smoky Hill River Festival 364,071 365,200 365,200 Capital Outlay 6,186 7,000 7,000 Cash Reserve 98.787 98,787 Total expenditures 944.961 1.050,791 1,050,791 Excess [deficiency) of revenues over [under] expenditures [480,934) [638,792) [638,792] Other finanCing sources [uses] Transfer In 489,358 489,358 489,358 Total other financing sources [uses) 489,358 489,358 489,358 Excess [deficiency] of revenues and other sources over [underJ expenditures and other [uses] 8,424 [149,434J [149,434) Unreserved fund balance, January 1 147,536 149.434 149,434 Unreserved fund balance/GAAP fund balance December 31 $ 155,960 $ -$ -See independent auditor's report on the financial statements. 75 Variance with Final Budget Positive [Negative] $ 67,202 5,482 [911] [19,745) 52,028 5,100 1,129 814 98,787 105,830 157,858 157,858 [1,898] $ 155,960 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 2,723,262 $ 2,595,524 $ 2,595,524 Delinquent taxes 55,583 40,000 40,000 Motor vehicle taxes 205,866 268,955 268,955 Total taxes 2,984,711 2,904,479 2,904,479 Charges for services Special assessments 1.535,487 1.349.311 1.349.311 Interest income General interest 5,131 10,000 10,000 Miscellaneous revenues General miscellaneous revenues 12,983 140,000 140,000 Other financing sources General sources 230,131 Total revenues 4,768,443 4,403,790 4,403,790 Expenditures Debt Service Pnncipal 4,276,195 4,631,079 4,631,079 Interest and other charges 1,771,580 1,833,997 1,833,997 Cash Reserve 403,283 403,283 Total expenditures 6,047,775 6,868,359 6,868,359 Excess [deficiency) of revenues over [under] expenditures [1,279,332J [2,464,569J [2,464,569J Other financIng sources [uses] Transfer in 2,026,973 1,800,000 1,800,000 Transfer [out] [83,488J Total other financing sources [uses] 1,943,485 1,800,000 1,800,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses) 664,153 [664,569] [664,569) Unreserved fund balance, January 1 571,873 664,569 664,569 Unreserved fund balance/GAAP fund balance December 31 1,236,026 $ -$ -Reconciliation to GAAP Taxes receIvable 2,441,349 Deferred revenue [2,392,245) GAAP Fund Balance, December 31 $ 1,285,130 See independent auditor's report on the financial statements 76 Variance with Final Budget Positive [Negative] $ 127,738 15,583 [63,089) 80,232 186.176 [4,869) [127,017) 230,131 364,653 354,884 62,417 403,283 820,584 1,185,237 226,973 [83,488J 143,485 1,328,722 [92,696) $ 1,236,026 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Revenues Charges for services Health and sanitation $ 2,494,710 $ 2,107,000 Interest income General interest 7,000 7,000 Interfund services provided Health and sanitation 453,672 505,300 Miscellaneous revenues Health and sanitation 24,491 42,310 Total revenues 2,979,873 2,661,610 Expenditures Public Health and Sanitation Solid waste 1,746,122 2,033,262 Hazardous waste disposal 80,517 94,032 Total public health and sanitation 1,826,639 2,127,294 Debt Service PrinCipal 388,198 324,396 Interest 32,000 106,975 Total debt service 420,198 431,371 Capital Outlay 359,515 467,200 Cash Reserve 1,825,201 Total expenditures 2,606,352 4851,066 Excess [defiCiency) of revenues over [under) expenditures 373,521 [2,189,456) Other financing sources [uses) Transfers [out] [48,089) Total other financing sources [uses) [48,089) Excess [defiCiency] of revenues and other sources over [under) expenditures and other [uses) 325,432 [2,189,456) Unreserved fund balances, January 1 2,490,536 2,189,456 Prior year cancelled encumbrances 8,609 Unreserved fund balances, December 31 $ 2,824,577 $ -See independent auditor's report on the financial statements, 77 Final $ 2,107,000 7,000 505,300 42,310 2,661,610 2,033,262 94,032 2,127,294 324,396 106,975 431,371 467,200 1,825,201 4,851,066 [2,189,456) [2,189,456) 2,189,456 $ -Variance with Final Budget Positive [Negative] $ 387,710 [51,628) [17,819) 318,263 287,140 13,515 300,655 [63,802) 74,975 11,173 107,685 1,825,201 2,244,714 2,562,977 [48,089) [48,089) 2,514,888 301,080 8,609 $ 2,824,577 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Revenues Charges for services Water and wastewater $ 17,266,856 $ 16,321,884 Interest income General interest 26,993 25,000 Operating grants, restricted Water and wastewater 201.700 Interfund services provided General services 28,061 30,900 Water and wastewater 95,097 Total interfund services 123,158 30,900 Miscellaneous revenues General miscellaneous revenues 88 Water and wastewater 489,629 260,000 Total miscellaneous revenues 489,717 260,000 Total revenues 18,108,424 16,637,784 Expenditures Water and Wastewater Water 10,153,314 9,029,002 Sewer 2,705,205 2,784,556 Total water and wastewater 12,858,519 11,813,558 Capital Outlay 3,976,377 1,877,350 Cash Reserve 6.497,105 Total expenditures 16,834,896 20,188,013 Excess [deficiency] of revenues over [under) expenditures 1,273,528 [3,550.229) Other financing sources [uses] Transfers [out] [1,005,352) [3.804,546) Total other financing sources [uses] [1,005,352) [3,804,546) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 268,176 [7,354,775] Unreserved fund balances, january 1 9,699,890 7,354,775 Prior year cancelled encumbrances 20,388 Unreserved fund balances, December 31 $ 9,988,454 $ -See Independent auditor's report on the finanCial statements. 78 Final $ 16,321,884 25,000 30,900 30,900 260,000 260,000 16,637,784 9.029,002 2,784,556 11,813,558 1,877,350 6,497,105 20,188,013 [3,550,229) [3,804,546) [3,804,546) [7,354,775] 9,699,890 $ 2,345,115 Variance with Final Budget Positive [Negative] $ 944,972 1,993 201,700 [2,839] 95,097 92,258 88 229,629 229,717 1,470,640 [1,124,312] 79,351 [1,044,961) [2,099,027] 6,497,105 3,353,117 4,823,757 2,799,194 2,799,194 7,622,951 20,388 $ 7,643,339 Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31.2011 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Health and sanitation $ 2,342,291 $ 2,316,885 $ 2,316,885 $ 25,406 Interest income General interest Charges for services Miscellaneous revenues Total revenues Expenditures Public Health and Sanitation Sanitation Capital Outlay Cash Reserve Total expenditures Excess [deficiency] of revenues over [under) expenditures Unreserved fund balance, January 1 Unreserved fund balances, December 31 1,839 424 2,344,554 2,179,431 132,110 2,311,541 33,013 581,811 $ 614,824 3,500 3,500 2,320,385 2,320,385 2,163,312 2,163,312 158,000 158,000 525,425 525,425 2,846,737 2,846,737 [526,352] [526,352] 526,352 526,352 $ -$ -See independent auditor's report on the financial statements. 79 [1,661) 424 24,169 [16,119] 25,890 525,425 535,196 559,365 55,459 $ 614,824 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Revenues Charges for services Culture and recreation $ 636,202 $ 777,500 $ Interest Income General interest 36 200 Miscellaneous revenues General miscellaneous revenues 1,562 1,000 Culture and recreation 48,618 40,000 Total miscellaneous revenues 50,180 41,000 Total revenues 686,418 818,700 Expenditures Culture and Recreation Golf course 760,384 752,160 Debt Service 15,724 16,000 Cash Reserve 173,493 Total expenditures 776,108 941,653 Excess [deficiencyJ of revenues over [underJ expenditures [89,690) [122.953) Other financing sources [uses] Transfers in 47,228 Total other financing sources [uses] 47,228 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [42,462] [122,953) Unreserved fund balances, January 1 43,462 122,953 Unreserved fund balances, December 31 $ 1.000 $ -$ See independent auditor's report on the financial statements. 80 Final 777,500 200 1,000 40,000 41,000 818,700 752,160 16,000 173,493 941,653 [122,953J [122,953] 122,953 -Variance with Final Budget Positive [Negative] $ [141,298J [1641 562 8,618 9,180 [132,282J [8,224J 276 173.493 165,545 33,263 47,228 47,228 80,491 [79,491J $ 1,000 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) RISK MANAGEMENT FUND Revenues Interest income General interest Interfund services provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Risk management Capital Outlay Cash Reserve Total expenditures Excess [deficiency) of revenues over [under] expenditures Unreserved fund balance, January 1 For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final $ -$ 1,400 $ -374,708 374,708 374,708 176,298 40,200 177,500 551,006 416,308 552,208 532,771 424,651 549,000 138 1,000 1,000 74,037 532,909 499,688 550,000 18,097 [83,380] 2,208 49,848 83,380 49,847 Variance with Final Budget Positive [Negative] $ [1,202) [1,202J 16,229 862 17,091 15,889 Unreserved fund balance, December 31 $ 67,945 .$.. . ___-$ 52,055 ,;:;,.$ _-.;..15;;.:.,,8;;,.; ;9..;.,0 See independent auditor's report on the financial statements. 81 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND Revenues Interest income General interest Interfund services provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Worker's compensation Cash Reserve Total expenditures Excess [deficiency) of revenues over [underJ expenditures Unreserved fund balance, January 1 For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final $ 1,937 $ 2,500 $ 2,500 229,452 229,435 229,435 1,444 232,833 231,935 231,935 334,210 297,762 297,762 638,936 638,936 334,210 936,698 936,698 [101,377) [704,763) [704,763J 621,629 704,763 704,763 Variance with Final Budget Positive [Negative] $ [563J 17 1,444 898 [36,448J 638,936 602,488 603,386 [83,134J Unreserved fund balance, December 31 $ 520,252 ~$ ====-~$ ====-~$ ===52=0=.2=5=2 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEALTH INSURANCE FUND Revenues Interest income General interest Interfund Services Provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Health insurance Cash Reserve For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final $ 4,904 $ 5,000 $ 5,000 6,304,144 6,620,000 6,620,000 52,285 6,361,333 6,625,000 6,625,000 5,947,148 6,913,677 6,913,677 1,503,185 1,503,185 Variance with Final Budget Positive [Negative] $ [96] [315,856] 52,285 [263,667) 966,529 1,503,185 Total expenditures 5,947.148 8,416,862 8,416,862 2,469,714 Excess [deficiency] of revenues over [under) expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 414,185 [1,791.862) [1,791,862) 2,206,047 1,501,522 1,791.862 1,791,862 [290,340J $ 1,915,707 $ -$ -$ 1,915,707 See independent auditor's report on the financial statements. 83 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Interest income General interest $ 423 $ 4,000 $ 4,000 Interfund services provided General services 1,629,328 1,490,000 1,485,942 Miscellaneous revenues General miscellaneous revenues 22,298 4,000 138,058 Total revenues 1,652.049 1,498,000 1,628,000 Expenditures Other Central garage 1,697,373 1,454.727 1,716,068 Capital Outlay 4,495 250 Cash Reserve 161.091 Total expenditures 1,701,868 1,616,068 1,716,068 Excess [deficiency] of revenues over [under) expenditures [49,819] [118,068] [88.068] Other financing sources [uses] Transfers In 60,000 30.000 Excess [deficiency] of revenues and other financing sources over [under] expenditures and other financing [uses] 10,181 [88,068] [88,068] Unreserved fund balance, january 1 89,819 88,068 89,889 Unreserved fund balance, December 31 $ 100,000 $ -$ 1,821 See independent auditor's report on the financial statements. 84 Variance with Final Budget Positive [Negative] $ [3,577] 143,386 [115,760] 24,049 18,695 [4,495] 14,200 38.249 60,000 98,249 [70] $ 98.179 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) INFORMATION SYSTEMS FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Charges for services General charges $ 106,305 $ 106,000 $ 106,000 Interest income General interest 1,182 500 500 Interfund services provided General services 1,237,220 1,258,760 1,258,760 Miscellaneous revenues General miscellaneous revenues 2,889 2,889 Total revenues 1,344,707 1,368,149 1,368,149 Expenditures Other Information services 1,162,756 977,978 977,978 Capital Outlay 113,789 351,000 351,000 Cash Reserve 105,703 105,703 Total expenditures 1,276,545 1,434,681 1,434,681 Excess [deficiency] of revenues over [underJ expenditures 68,162 [66,532] [66,532) Unreserved fund balance, January 1 91,838 66,532 66,532 Unreserved fund balance, December 31 $ 160,000 $ -$ -See independent auditor's report on the financial statements. 85 Variance with Final Budget Positive [Negative] $ 305 682 [21,540] [2,889] [23,442J [184,778J 237,211 105,703 158,136 134,694 25,306 $ 160,000 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Risk management fund -To account for the accumulation and allocation of costs associated with risk management activities and the purchase of various forms of insurance. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. Information services fund -To account for the accumulation and allocation of costs associated with electronic data processing. 86 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2011 Workers' Risk Compensation Health ASSETS Management Reserve Insurance Current assets: Cash and Investments $ 171,559 $ 649,238 $ 1,916,207 Inventory and prepaid supplies Total current assets 171,559 649,238 1,916,207 Capital assets' Capital assets Less. accumulated depreciation Total capital assets Total assets $ 171.559 $ 649,238 $1.916.207 Liabilities Current liabilities (payable from current assets) Accounts payable $ 7,351 $ -$ 500 Current portion of compensated absences payable Current portion of accrued claims payable 172 545 391,175 Total current liabilities (payable from current assets) 7.351 172.545 391.675 Noncurrent liabilities Compensated absences payable Accrued claims payable 149,245 Total noncurrent liabilities 149.245 Total liabilities $ 7.351 $ 321.790 $ 391,675 Net Assets Invested in capital assets, net of related debt $ $ -s, Unrestricted 164.208 327.448 1.524.532 Total net assets $ 164.208 $ 327,448 $1.524.532 See independent auditor's report on the financial statements 87 Total Internal Central Information Service Garage Szstems Funds $ 150,383 $ 201,820 $ 3,089,207 115,694 115,694 266,077 201,820 3.204,901 189.424 677,214 866,638 161,634 677,214 838,848 27,790 27,790 $ 293,867 $ 201,820 $ 3,232,691 $ 50,383 $ 41.820 $ 100,054 7.075 10,309 17,384 563.720 57.458 52129 681,158 30,500 44,440 74,940 149.245 30,500 44.440 224.185 $ 87.958 $ 96.569 $ 905.343 $ 27,790 $ -$ 27,790 178,119 105,251 2.299.558 $ 205.909 $ 105.251 $ 2,327,348 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUND For the Year Ended December 31, 2011 Workers' Risk Compensation Health Central Management Reserve Insurance Garage Operating revenues Charges for services $ 374,708 $ 229,451 $ 6,304,144 $ 1,629,328 Miscellaneous 176.298 1.444 52,285 21,169 Total operating revenues 551,006 230,895 6,356,429 1,650,497 Operating expenses General government 436,645 230,417 5,955,821 1,710,911 Depreciation 4.698 Total operating expenses 436,645 230.417 5,955,821 1,715,609 Operating Income [loss] 114,361 478 400.608 [65,112] Other operating revenues [expenses] Investment Income 1937 4.904 423 Total other operating revenues [expenses] 1.937 4.904 423 Nonoperating revenues [expenses] Galn/[Ioss] on disposal of fixed assets 1,129 Total nonoperating revenues [expenses] 1,129 Income [loss] before transfers 114.361 2.415 405512 [63.560J Transfers from [toJ other funds Transfers In 60,000 Total transfers 60.000 Change In net assets 114.361 2.415 405.512 [3.560J Net assets January 1 49,847 325,033 1,119,020 205,887 Restatement 3,582 Net assets, January 1. restated 49,847 325,033 1,119,020 209,469 Net assets. December 31 $ 164.208 $ 327448 $ 1.524.532 $ 205.909 See Independent auditor's report on the financial statements. 88 Total Internal Information Service S~stems Funds $ 1,343,525 $ 9,881,156 251.196 1.343,525 10,132,352 1,277,484 9,611,278 4,698 1.277,484 9,615,976 66,041 516,376 1,182 8,446 1.182 8.446 1,129 1.129 67.223 525.951 60,000 60.000 67,223 585,951 38028 1.737,815 3.582 38,028 1,741,397 $ 105.251 $ 2.327.348 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2011 Workers' Risk Compensation Health Management Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 374,708 $ 125,659 $ 6,312,817 Cash paid to suppliers of goods or services [440,965J [230,417J [5,955,771J Cash paid to employees Other operating receipts 176,298 1,444 52,285 Net cash provided by [used InJ operating activIties 110,041 [103,314) 409,331 Cash flows from capital and related financing activities Proceeds from sale of capital assets Cash flows from investing activities Interest received 1,937 4,904 Cash flows from noncapltal financing activities Transfers In Net Increase [decreaseJ In cash and cash equivalents 110,041 [101,377J 414,235 Cash and cash equivalents, January 1 61,518 750,615 1,501,972 Cash and cash equivalents, December 31 $ 171.559 $ 649,238 $1.916,207 See Independent auditor's report on the financial statements 89 Total Internal Central Information Service Garage Services Funds $ 1,629,329 $1,343,525 $ 9,786,038 [1,462,573J [866,093J [8,955,819J [230,042J [401,446J [631,488J 21,169 251,196 [42,117) 75,986 449,927 1,129 1,129 422 1,182 8,445 60,000 60,000 19,434 77,168 519,501 130,949 124,652 2,569,706 $ 150,383 $ 201.820 $ 3,089,207 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31,2011 Reconciliation of operating [loss] Income to net cash provided by [used In] operating activities Workers' Risk Compensation Health Manaqement Reserve Insurance Total Internal Central Information Service Garaqe Services Funds Operating Income [loss] $ 114,361 $ 478 $ 400,608 $ [65,112] $ 66,041 $ 516,376 Adjustments to reconcile operating Income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease In Inventory Increase [decrease] In accounts payable Increase [decreaseJ In accrued compensated absences Increase [decreaseJ In claims payable Net cash provided by [used InJ operating activities $ [4,320] 50 [103.792J 8,673 110,041 $ [103,314) $ 409,331 See Independent auditor's report on the financial statements 90 $ 4,698 4,698 6,646 6,646 9,296 9,006 14,032 2,355 939 3,294 [95,119J [42,117) $ 75,986 $ 449,927 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. PEGS access agency fund -To account for revenues collected on behalf of the community access television system for public, educational and governmental programming. Payroll cleanng agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use in investigations. Fire cam agency fund -To account for donations received and used for fire equipment. Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. 91 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2011 Balance Decem ber 31 , 2010 Additions Deductions Cash and investments Special Assessment Escrow $ 328,828 $ 5,336 $ Fire Insurance Proceeds 5,062 41,952 PEGS Access 5,071 285,273 Payroll Clearing [246,521] Court Bond and Restitution 74,831 Police Investigation Account 2,307 Fire Cam Fund 780 3 Citizenship Trust 3,692 10 Section 125 Plan Fund 339,549 349,775 Total Assets $ 513,599 $ 682,349 $ Accounts Payable Special Assessment Escrow $ 328.828 $ 5,336 $ Fire Insurance Proceeds 5,062 41,952 PEGS Access 5,071 285,273 Payroll Clearing [246,521] Court Bond and Restitution 74,831 Police Investigation Account 2,307 Fire Cam Fund 780 3 Citizenship Trust 3,692 10 Section 125 Plan Fund 339.549 349,775 Total liabilities $ 513,599 $ 682,349 $ See independent auditor's report on the financial statements. 93 198,820 36,698 285,241 4,536 3,910 182 353,261 882,648 198,820 36,698 285,241 4,536 3,910 182 353,261 882,648 Balance Decem ber 31 , 2011 $ 135,344 10,316 5,103 [251,057] 70,921 2,125 783 3,702 336,063 $ 313,300 $ 135,344 10.316 5,103 [251.057] 70,921 2,125 783 3,702 336,063 $ 313,300 Special Assessment ~ ASSETS' Cash and investments $ 135,344 Total assets $ 135,344 LIABILITIES Accounts payable $ 135,344 Totalliabihtles $ 135.344 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December 31,2011 Fire Court Pohce Insurance PEGS Payroll Bond and Investigation Fire Proceeds Access Clearmg Restitution Account Cam $10,316 $5,103 $ [251,057) $ 70.921 $ 2,125 $783 $10,316 $5,103 $ [251,057) $ 70,921 $ 2,125 $783 $10,316 $5,103 $ [251,057) $ 70,921 $ 2,125 $783 ~ ~ $ [251,057) $ 70,921 $ 2,125 $783 See mdependent auditor's report on the financial statements. 92 Section 125 Cltlzenshl l2 Plan Totals $ 3,702 $ 336,063 $ 313,300 $ 3,702 $ 336,063 $ 313.300 $ 3.702 $ 336,063 $313.300 $ 3,702 $ 336,063 $ 313,300 CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT To: liMB Bank, N.A. Kansas City, Missouri liMB Bank, N.A. Kansas City, Missouri Country Club Bank Prairie Village, Kansas June 11,2012 Re: Approximately $2,365,000 General Obligation mternal Improvement Bonds, Series 2012-A, $3,760,000 General Obligation Refunding Bonds, Series 2012-B and $1,485,000 General Obligation Temporary Notes, Series 2012-1 The undersigneds are the duly acting Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), and are authorized to deliver this Certificate to the addressees (the "Purchasers") on behalf of the Issuer. The Issuer has heretofore caused to be delivered to the Purchasers copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced bonds and notes (the "Obligations"). For the purpose of enabling the Purchasers to comply with the requirements of Rule 15c2-12(b)(1) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: __ ~ _ ~~~~~ ___ __ Title: By: ~ Title: Clerk Publisher.s Affidavit ""L'---"-C. .h.. .n... · .. s.u .,tY1'--"F.lo.inu.klOo-___--'. being duly sworn declare that I am a I egal Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Bond Sale Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of June 21, 2012 I '.f Subscribed and sworn to before me, this . 21 5--=~--day of :SUfi.<.-AD.20 I"L Printer's Fee $282.00 N01ARY PUSL.IC • State 01 Kansas ~ U••lE NDVCi;H..2RZO."B2ACK1 z_ My "\lPt. £)(p. ~ -(Published in the ! r AsS88Se'd-viifU8tIOil' . Salina Journal ! and. Indebtedness. The I J • June 21,2012). ' E.quallzed Assessed Tan-l I SUMMARY NOTICE OF 11 glofe Valuation tor Compu-I -BOND SALE il tation of Bonded Debt J . $2,365).000' I Limitations tor the year CITY OF ::>ALlNA, : 2011 is $449,760,638. I KANSAS " The total genera) obliga'l I GENERAL OBLIGATION tion Indebtedness at the i INTERNAL IMPROVE. . Is~ue~ as 01 the Dated. , MENT BONDS, SERIES Dat.e, Including the Bonds . : 2012-A being sold, ;s: , (GENERAL OBLIGATION $65,235,000. ' r BONOS PAYABLE FROM Approval Of BondS I . UNLIMITED AD VALO· The Bonds will be SOld! . . REM TAXES) , ~ubJect to the legal 0pln. , Bids. SUBJECT to the • Ion of Gilmore & Bell, \ , Notice of Sale daled June P.C., Kansas City Mis-! '11,2012. written and elec· souri, Bond Counsel I ' tronic bids will be receiVed whose approving legal ! on behalf of the Clerk 01 opinion as to the validity of , the City of Salina Kansas the Bonds Will be fur'j (the "Issue(') In ihe case' nlshed and paid for by the I' of written bids, at the ad-Issuer, printed on the . dress set forth below, and Bands and delivered to lin the case of electronic the successful bidder as bids, through PARITY(JI) and when the Bonds are I ,u~tll 1 :00 p.m, Central delivered.., , I Time, on JULY 9,2012 for • Preliminary; subject to I the purchase 01 the Change as proVided in the above-referenced bonds Notice. of Sale. I (the "Bonds"). No bid of Addlilonal Information less than 100% of the Additional Information re: . principal amount of the' gardlng the Bonds may be I Bonds and accrued inter-obtained froin the under-I' est thereon to the date of signed, or from Ihe F,nandelivery will be can sid .. cia! AdVisor at the ad./ered. . dresses set forth tlelow: Bond Details. The DATED: June 11 2012 I Bonds will consist of fully' Written and FaCsimile j I registered bonds In the: Bid and Good Faith De.! ~ denomination of $5,000 or; posit Delivery Address: I any Integral multiple·. Rod Franz, Finance I I thereof. The .Bonds will Director , be dated July 15, 2012, 300 West Ash I and Will become due On Salina, Kansas 67402 October 1 In lhe years as Phone: (785)309-5735 10=. Principal F~x No: (785)309·5738 Am2Jm1: Email: I 2013 $130.000 • rod.franz@sallnaorg 2014 140,000 ~ F!nancllIl Advisor: I 2015 145,000 .George K. Baum & 2016 150,000' COmpany I 2017 150.000 I ,4801 Main Street, ) . 22001198 155,000 Suite 500 155,000 . J "Kansas City, Missouri 2020 155,000 1~112 2021 160,000 I At!· 0 'd Art b . 2022. 160 000' n. aVI e erry I 2023 _ 165'000 . Phone: (816)474-1100 , 2024 170:000:\ Fax No: (816)283-5326 I 2025 t75000'1 Email: 1 2026· 175;000 I arteberry@gkbaum.com 2027 180,000 I (11) The Bonds Will bear in I ' terest Irom the' date I thereof at rales to be de-J termined when the Bonds I are .sold as hereinafter! ! prOVided, which interest j will be payable semlannu-I ally on April 1 and Octo· ~ b~r 1 In each year. begin-j nmg on Aprllt, 2013 I te~°'t~en~~~~~lhaTIYb~'I, registered under a I book-entry-only system I j administered through I DTC. . '1 Paying Agent and Bond' ! Registrar. Treasurer of { I the State of Kansas Topeka, Kansas_ ' . I Gcod FaIth Deposit. I . Each bid shall be accom., I panied by a good faith de-I poSIt in the form 01 a cashier's or certified .check drawn on a bank located In the United States of I Amenca, a qualilled flnan; claf suret¥ bond or a wire transfer In Federal Re .,' . asvearvileab lfeu nfodrs uIsme mbye dthiaet eIslY. I suer in Ihe amount of I $47,300.00. ' i DeUvery. The Issuer will pay for preparation 01 the I Bonds and will deliver the ~ same prOperly prepared: executed and regiSIered1 without cost to tha sue , cessful bidder on or about I July 26, 2012, to DTC for the aocount 01 the sue· : cessful bldder __ ~ ,. STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, KRIS W. KOBACH, Kansas Secretary of State, certify that the records of this office reveal the following: Affidavit of Publication I am the publisher of the Kansas Register, a newspaper published pursuant to K.S.A. 75-430, and the attached is a true copy of the notice that appeared therein on the date given below: June 21, 2012 In Testimony Whereof: I hereto set my hand and cause to be affixed my official seal. Done at the City of Topeka this 21st day of June, A.D. 2012. KRIS W. KOBACH KANSAS SECRETARY OF STATE . 904 Kansas Register Bond Sale/Hearing (Pttbhshed ill tile Kansas Register June 21, 2012.) Summary Notice of Bond Sale City of Salina, Kansas $2,365,000* General Obligation Internal Improvement Bonds Series 2012-A (General obligation bonds payable from unlimited ad valorem taxes) Bids Subject to the Notice of Bond Sale dated June 11,2012, written and electronic bids will be received all. behalf of the clerk of the city of Salina, Kansas (the issuer), in the case of written bids, at the address set forth below, and in the case of electronic bids, through P ARlTY, until 1 p.m. July 9, 2012, for the purchase of the above-referenced bonds. No bid of less than 100 percent of the principal amount of the bonds and accrued interest thereon to the date of delivery will be considered. Bond Details The bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The bonds will be dated July 15, 2012, and will become due on October 1 in the years as follows: Principal Year Arnount* 2013 $130,000 2014 140,000 2015 145,000 2016 150,000 2017 150,000 2018 155,000 2019 155,000 2020 155,000 2021 160,000 2022 160,000 2023 165,000 2024 170,000 2025 175,000 2026 175,000 2027 180,000 The bonds will bear interest from the date thereof at rates to be detennined when the bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning April 1, 2013. Book-Entry-Only System The bonds shall be registered lmder a book-entry-only system administered through DTC Paying Agent and Bond Registrar Kansas State Treasurer, Topeka, Kansas. Good Faith Deposit . Each bid shall be accompanied by a good faith deposit m the form of a cashier's or certified check drawn on a bank located ill. the United States, a qualified financial surety bond or a wire transfer in Federal Reserve funds immediately available for use by the issuer in the amount of $47,300. Delivery The issuer will pay for preparation of the bonds and will deliver the same properly prepared, executed and registered without cost to the successful bidder all. or about July 26, 2012, to DTC for the account of the successful bidder. Assessed Valuation and Indebtedness The equalized assessed tangible valuation for computation of bonded debt limitations for the year 2011 is $449,760,638. The total general obligation indebtedness of the issuer as of the dated date, in.c1uding the bonds being sold, is $65,235,000. Approval of Bonds The bonds will be sold subject to the legal opinion of Gilmore & Bell, P.C, Kansas City, Missouri, bond counsel, whose approving legal opinion as to the validity of the bonds will be furnished and paid for by the issuer, printed on the bonds all.d delivered to the successful bidder when the bonds are delivered. Additional Information A?ditional information regarding the bonds may be obtamed from the undersigned or from the fUl.ancial advisor at the addresses set forth below. Written and Facsimile Bid and Good Faith Deposit Delivery Address: Rod Franz, FUl.ance Director 300 W. Ash Salina, KS 67402 (785) 309-5735 Fax: (785) 309-5738 Email: rodJranz@salul.a.org Financial Advisor: George K. Baum & Company 4801 Main St., Suite 500 Kansas City, MO 64112 Attn: David Arteberry (816) 474-1100 Fax: (816) 283-5326 Email: arteberry@gkbaum.com Dated June 11, 2012. *Prelirninary; subject to change as provided in the Notice of Sale. Doc. No. 040639 State of Kansas City of Salul.a, Kansas Wildl fe, rks, and Tourism ommission N oti of Hearing roposed Adm! istrativ egulations A public hearing e conducted by the Wildlife, Parks, and Tourism mission at 7 p.m. Thursday, August 23, at the K sas We ds Education Center, 592 N.E. K-157 Hi way, Great nd, to consider the approval and a ption of propose egulations of the Kansas Depar ent of Wildlife, Parks, a Tourism. A regaratoryhearmg on business of Wildlife, Parks, and Tourism Commission will begin at 7 p .. : August 23 at the location listed above. There will be public comment © Kansas Secretary of State 2012 Vol. 31, No. 25, June 21,2012 In the opinion of Gzlmore & Bell, P. C, Kansas City, Missouri, Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on the Notes and Bonds (including any original issue discount properzv allocable to an owner thereof) is (a) excluded ji-om gross income for federal income tax pUlposes and (b) not an item of tax preference for pUlposes of the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current earnings for the pUlpose of computing the alternative minimum tax imposed on certain cOlporations. The interest on the Notes and Bonds is exempt from income taxation by the State of Kansas. The Notes and Bonds are "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3). See TAX MATTERS -"Opinion of Bond Counsel" herem. New Issues Book-Entry Ouly Bank Qualified Moody's Ratings: Notes-"MIGl" Bonds-"Aa2" CITY OF SALINA, KANSAS $1,485,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 $2,365,000 GENERAL OBLIGATION INTE&'~AL IMPROVEMENT BONDS SERIES 2012-A Dated: July 15, 2012 $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Due: As Shown Herein The Series 2012-1 Notes (the "Notes") will be issued as fully registered notes in the denomination of $5,000 or any integral multIple thereof. The Notes shall be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC'), New York. New York. to which payment of principal and interest will be made. Individual purchases of Notes will be made in book-entry form. Purchasers will not receive certificates representing their interest in the Notes purchased. Interest on the Bonds will be payable at matunty. Principal and interest on the Notes will be payable by check, draft, or wire transfer from the Treasurer of the State of Kansas (the "Note Paying Agent"). The Notes are not subject to redemption prior to maturity. The Series 2012-A Bonds (the "Series 2012-A Bonds") and the Series 2012-B Bonds (the "Series 2012-B Bonds" and, collectively with the Series 2012-A Bonds, the "Bonds") will be issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds shall be initially registered in the name of Cede & Co., as nominee of DTC to which payment of principal and interest will be made. Individual purchases of Bonds will be made in book-entry only form. Purchasers will not receive certificates representing their interest 111 the Bonds purchased. Principal on the Bonds will be payable on each October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April I and October 1 of each year until maturity. commencing on April 1, 2013. The principal of and interest on the Bonds will be payable by check, draft, or wire transfer from the Treasurer of the State of Kansas (the "Bond Paying Agent"). The Bonds are subject to redemption at the option of the City as further described herein. MATURITY SCHEDULES (see inside ji'ont cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of Bond Counsel. It is expected that the Notes and Bonds will be available for delivery through the facilities ofDTC on or about July 26,2012. The date of this Official Statement is July 9, 2012 THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY IT IS NOT A SUMMARY OF THE ISSUE INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION MATURITY SCHEDULES $1,485,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 Maturity 08-01-13 Amount $1,485,000 Rate 1.000% The Notes are not subject to redemption prior to maturity. $2,365,000 Yield 0.375% Base CUSIP(l) 794743 2L7 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A Base CUSIP(l) Maturity Amount Rate Yield 794743 10-01-13 $130,000 1.00% OAO% 2M5 10-01-14 140,000 1.00 OA5 2N3 10-01-15 145,000 1.25 0.55 2P8 10-01-16 150,000 1.50 0.70 2Q6 10-01-17 150,000 1.50 0.85 2R4 10-01-18 155,000 1.50 1.05 2S2 10-01-19 155,000 1.50 1.20 2TO 10-01-20* 155,000 lAO lAO 2U7 10-01-21 * 160,000 1.65 1.65 2V5 10-01-22* 160,000 1.85 1.85 2W3 10-01-23* 165,000 2.00 2.00 2X1 10-01-24* 170,000 2.10 2.15 2Y9 10-01-25* 175,000 2.20 2.25 2Z6 10-01-26* 175,000 2.35 2AO 3AO 10-01-27* 180,000 2A5 2.50 3B8 $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Base CUSIP(I) Maturi!): Amount Rate Yield 794743 10-01-13 $385,000 1.00% OAO% 3C6 10-01-14 940,000 1.00 OA5 3D4 10-01-15 625,000 1.00 0.55 3E2 10-01-16 460,000 1.00 0.70 3F9 10-01-17 485,000 1.00 0.85 3G7 10-01-18 475,000 1.05 1.05 3H5 10-01-19 235,000 1.20 1.20 3J1 10-01-20* 180,000 lAO lAO 3K8 *The Bonds maturing on or after October 1, 2020, will be subject to redemption prior to maturity at the option of the City on October 1, 2019, and thereafter, in whole or in part on any date, in principal amounts of $5,000 or any integral multiple thereof, at a price equal to 100% of the principal amount of Bonds to be redeemed plus accrued interest to the date fixed for redemption. See THE BONDS -"Redemption Provisions" herein. (llCUSIP numbers have been assigned to this Issue by Standard & Poor's CUSIP Service Bureau. a divIsIOn oj the McGraw-Hili Companies. Inc .. and are included sole~y Jar the convenience oJthe Owners oJthe Notes and Bonds. Neither the City nor the Underwriters shall be responsible Jar the selection or correctness oJthe CUSIP numbers setJol'th above CITY OF SALINA, KANSAS 300 West Ash City/County Building -Room 206 P. O. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Nonnan Jennings, Mayor Barb Shirley, Vice Mayor Samantha Angell, Commissioner Kaye Crawford, Commissioner Aaron Householter, Commissioner CITY STAFF Jason Gage, City Manager Mike Schrage, Deputy City Manager Rodney Franz, Director of Finance and Administration Lieu Ann Elsey, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri FINANCIAL ADVISOR George K. Baum & Company Kansas City, Missouri No person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Bonds to be issued, other than those contained in this Official Statement, and if given or made, such other information or representations not so authorized must not be relied upon as having been given or authorized by the City or the Underwriters. This Official Statement is not to be used in connection with an offer to -sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlav;rful to make such offer or solicitation. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. Information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that the information contained herein has remained unchanged since the respective dates as of which such information is given. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT..................................................................................................... 1 THE NOTES.............................................. ......................................................................................... 2 THE BONDS........................................ ....... ........................................................................................ 5 THE DEPOSITORY TRUST COMP ANY ...................................................................... ................... 9 THE FINANCING PLAN................................................................................................................... 11 SOURCES AND USES OF FUNDS ................................................................. ................................. 12 RISK FACTORS AND INVESTMENT CONSIDERATIONS ..................................................... .... 12 LEGAL MATTERS ............................................................................................................................ 14 TAX MATTERS...................................... ....... .................................................................................... 14 RATINGS ............................................................................................... ........................................... 16 FINANCIAL ADVISOR................... ................................................................. ................................. 16 UNDERWRITING............................................................................................................................. 16 ABSENCE OF MATERIAL LITIGATION ........................ ............................................................... 17 CONTINUING DISCLOSURE ........................................................ .................................................. 17 CERTIFICATION OF OFFICIAL STATEMENT ............................................................................. 17 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITy................................................................................... A-I GENERAL INFORMATION CONCERNING THE CITY .......................................................... A-2 ECONOMIC INFORMATION CONCERNING THE CITY ....................................................... A-6 DEBT SUMMARY OF THE CITY ..................................................................... ......................... A-8 FINANCIAL INFORMATION CONCERNING THE CITY ....................................................... A-II APPENDIX B: CONTINUING DISCLOSURE INSTRUCTIONS APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2011 General CITY OF SALINA, KANSAS $1,485,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "City"), and the issuance of its $1,485,000 General Obligation Temporary Notes, Series 2012-1 (the "Notes"), its $2,365,000 General Obligation Internal Improvement Bonds, Series 2012-A (the "Series 2012-A Bonds"), and its $3,785,000 General Obligation Refunding Bonds, Series 2012-B (the "Series 2012-B Bonds" and collectively with the Series 2012-A Bonds, the "Bonds"), all dated July 15, 2012. The Notes and the Bonds are being issued to provide funds to finance certain water, sewer, and street Improvements within the City and to refund portions of three outstandmg bond issues ofthe CIty. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City'S financial advisor, George K. Baum & Company, Kansas City, Missouri (the "Financial Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.e., Kansas City, Missouri, Bond Counsel, has not assisted in the preparation of this Officml Statement, except for the sections titled INTRODUCTORY STATEMENT, THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, CONTINUING DISCLOSURE, and APPENDIX B and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the resolutions and ordinances ofthe governing body of the City authorizing the Bonds (the "Bond Ordinances"), as applicable. Copies of the Note Resolution and the Bond Ordinances are available upon request to the City, the Financial Advisor, or Bond Counsel. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. THE NOTES Description The Notes shall consist of fully registered book-entry-only Notes in the denomination of $5,000 or any integral multiples thereof (the "Authorized Denomination") and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated July 15,2012, shall become due in the amounts on the Stated Maturities, with option of prior redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Notes shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions The Notes are not subject to redemption and payment prior to maturity. Authoritv The Notes are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq. (including particularly K.S.A. 10-123) and K.S.A. 12-685 et seq., all as amended, and a resolution adopted by the City on July 9, 2012, authorizing the issuance of the Notes (the "Note Resolution"). Securitv The Notes shall be general obligations of the City, payable as to both principal and interest from the proceeds of general obligation bonds of the City, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Designation of Note Paving Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar'· and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration. Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. 2 In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge agamst such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required (a) to register the transfer or exchange of any Note that has been called for redemption after notice of such redemption has been mailed by the Note Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost. Stolen or Destroved Notes If (a) any mutilated Note IS surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City'S request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is 3 furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than i 0 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES -Book-Entry Notes; Securities Depository." PaYments Due on Saturdays, Sundays and Holidavs In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeedmg Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entrv Notes: Securities Depositorv The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the contmuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar 4 shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Description The Bonds shall consist of fully registered book-entry-only bonds in the denomination of $5,000 or any integral multiples thereof (the "Authorized Denomination") and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated July 15, 2012, shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2020 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1,2019, and thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine) at any tinle, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more. but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized 5 Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed. if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the State Treasurer and the Purchaser. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the princlpal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Pnce of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in tum, notify its Participants and that the Participants, in tum, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice. the City shall provide such notices of redemption as are required by the Disclosure Instructions. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Authority The Series 2012-A Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq. and K.S.A. 12-6aOl et seq., all as amended, and an ordinance and resolution adopted by the City on July 9,2012, authorizing the issuance of the Series 20l2-A Bonds (jointly referred to herein as the "Series 2012-A Bond Ordinance"). The Series 2012-B Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq. and K.S.A. 10-427 et seq., all as amended, and an ordinance and resolution adopted by the City on July 9,2012, authorizing the issuance of the Series 2012-B Bonds (jointly referred to herein as the "Series 2012-B Bond Ordinance"). 6 Security The Bonds shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real or personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolutions. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration. Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denommation of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authonzed agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registratlOn, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. 7 The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of$500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account nunlber to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be frxed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to fhe aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to bemailed.byfirstclassmail.postageprepaid.to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. Pavments Due on Saturdays, Sundays and Holidavs In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entrv Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Benefrcial Owners as described in the following paragraphs The City may decide, subject to the requirements of the Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualifred to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the 8 Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such detelTIlination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this section, the City, with the consent of the Bond Registrar, may select a successor securities depository as hereinafter provided to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be perfolTIled by the Secunties Depository shall be deemed to be imposed upon and perfolTIled by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Reglstrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing. registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilIties. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its· receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Notes and Bonds (collectively, the "Securities') The Securities will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of such series of the Securities, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law; a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("'Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 9 Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Onmibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Onmibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer, the Note Paying Agent, or the Bond Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not ofDTC, the Note Paying Agent, the Bond Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer, the Note Paying Agent or the Bond Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibilIty of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Note Paying Agent and the Bond Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Note Paying Agent and the Bond Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Note Paying Agent's or Bond Paying Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer, the Note Paying Agent or the Bond Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 10 The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide construction period fmancing for improvements to a main trafficway in the City and to pay the costs associated with the issuance of the Notes. The Series 2012-A Bond Projects Proceeds from the sale of the Series 2012-A Bonds will be used to provide long term financing for certain utility and street improvements within a new commercial development within the City and to pay the costs associated with the issuance of the Series 2012-A Bonds. A portion of the cost of these improvements was originally financed by the issuance of the City's Series 2011-1 General Obligation Temporary Notes, which will be retired with proceeds from the sale of the Series 2012-A Bonds and other available funds. The Series 2012-B Refunding Plan Proceeds from the sale of the Series 2012-B Bonds and other available funds will be used to refund the callable portions of three outstanding bond issues of the City: the General Obligation Internal Improvement Bonds, Series 2003-A; the General Obligation Internal Improvement Bonds, Series 2004-B; and the General Obligation Internal Improvement Bonds, Series 2005-A (collectively, the "Refunded Bonds"); and to pay the costs associated with the sale ofthe Series 2012-B Bonds. The repayment of the callable Series 2004-B Bonds is a current refunding. The repayment of the callable Series 2003-A and Series 2005-A Bonds is an advance refunding. According to the terms of the Refunding Plan, proceeds from the sale of the Series 2012-B Bonds and other available funds will be deposited into an irrevocable escrow account (the "Escrow Trust Account") which will provide funds to pay the interest due on the Refunded Bonds up to and including payments due on the Refunded Bonds' earliest optional redemption date and to redeem the principal of the Refunded Bonds on such date. All Refunded Bonds will be redeemed at their first optional redemption date. All Refunded Bonds will be called at a price equal to 100% of the par value thereof, without premium. The Refunding Plan is being undertaken in order to achieve interest cost savings. The following details the Refunded Bonds: Principal Maturity Dates Refunded Amount Amount to be Redemption Bonds Outstanding to be Refunded Refunded Date 2003-A $1,765,000 $1,125,000 10-01-14 thru 10-01-18 10-01-13 2004-B 1,390,000 1,010,000 10-01-13 thru 10-01-19 10-01-12 2005-A 2,200,000 1,535,000 10-01-14 thru 10-01-20 10-01-13 Escrow Trust Agreement An Escrow Trust Account will be established for the Refunded Bonds pursuant to the terms of an Escrow Trust Agreement dated as of July 15,2012, by and between the City and UMB National Bank of America, Wichita, Kansas (the "Escrow Trustee"). 11 Proceeds from the Series 2012-B Bonds will be deposited in the Escrow Trust Account and used to acquire direct, non-callable obligations of the United States of America (the "Escrowed Securities"). The Escrowed Securities will mature at such times and in such amounts as necessary, when combined with cash balances in the Escrow Trust Account, to pay the principal of and interest on the Refunded Bonds as described in the preceding section. Mathematical Verification The mathematical accuracy of (a) the computations made by George K. Baum & Company on the adequacy of the maturing principal and interest earned on the Escrowed Securities to be purchased with the proceeds from the proceeds of the Series 2012-B Bonds, together with uninvested funds to be held by the Escrow Trustee, in accordance with the Escrow Trust Agreement, to provide for the payment of the interest on the Refunded Bonds up to and including their earliest optional redemption date, and to redeem the Refunded Bonds on such dates; and (b) the yield computations made by George K. Baum & Company supporting the conclusion by Bond Counsel that the Series 2012-B Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas. SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Series Series Series 2012-1 Notes 2012-A Bonds 2012-B Bonds Sources of Funds: Note and Bond Proceeds $1,485,000.00 $2,365,000.00 $3,785,000.00 Prepaid Assessments 0.00 664,452.10 0.00 Transfer from Prior Issue Debt Service 0.00 408,488.14 67,372.50 Bid Premium 6,088.50 0.00 15,471.43 Total Sources of Funds $1,491,088.50 $3,437,940.24 $3,867,843.93 Uses of Funds: Deposit to Improvement Fund $1,485,308.50 $3,414,204.44 $ 0.00 Deposit to Escrow Fund 0.00 0.00 3,828,959.89 Costs ofIssuance 5.780.00 23,735.80 38,884.04 Total Application of Funds $1,491,088.50 $3,437,940.24 $3,867,843.93 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE NOTES AND BONDS (COLLECTIVELY, THE "SECURITIES',) DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITERS. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. 12 Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by' the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and Its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Taxation of Interest on the Securities An opinion of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Bond and Note Resolutions and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the eXistence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under TAX MATTERS assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. No Additional Interest or Mandatorv Redemption upon Event of Taxabilitv The Bond and Note ResolutIOns do not provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, the Bond and Note Resolutions do not provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes includable in gross income for Kansas income tax purposes. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to lllvestors who are in low tax brackets, and so the value of the interest compensation to any particular mvestor will vary with mdividual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. 13 Market for the Securities Ratings. The Securities have been assigned the fmancial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect .on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of brokerdealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposal On September 12, 2011, the President released a legislative proposal that would, among other things, subject interest on tax-exempt securities (including the Securities) to a federal income tax for taxpayers with incomes above certain thresholds for tax years beginning after 2012. The proposal has not yet passed either of the two Houses of Congress and it is not possible to predict whether this proposal will be enacted into law. If enacted into law, such a proposal could affect the value or marketability of tax-exempt securities (including the Securities). Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, whose approving opinion accompanies the Notes and Bonds. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned INTRODUCTORY STATEMENT, THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, CONTINUING DISCLOSURE, and APPENDIX B. TAX MATTERS General The following is a summary of the material federal and state income tax consequences of holding and disposing of the Notes and the Bonds (collectively referred to herein as the "Securities"). This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of whIch are subject to change (possibly on a. retroactive basis). This summary does not discuss all aspects of federal income taxatio'n that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws ofthe State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market at a premium or a discount. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. 14 Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date ofthe Securities: Federal Tax Exemption: The interest on the Securities (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in detennining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Bank Qualification. The Securities are "qualified tax-exempt obligations" for purposes of Code §265(b) ), and in the case of certain financial institutions (within the meaning of Code § 265(b )(5)), a deduction is allowed for 80% of that portion of such financial institutions' interest expense allocable to interest on the Securities. Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences Original Issue Discount. For Federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a Security over its issue price. The issue price of a Security is the first price at which a substantial amount of the Securities of that maturity have been sold (Ignoring sales to bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers). Under Code § 1288, OID on tax-exempt bonds accrues on a compound basis. The amount of OlD that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of that Security, plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on that Security (detennined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on that Security during that accrual period. The amount of OlD accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for Federal income tax purposes, and will increase the owner's tax basis in that Security. Prospective investors should consult their own tax advisors concerning the calculation and accrualofOID. Original Issue Premium. If a Security is issued at a price that exceeds the stated redemption price at maturity of the Security, the excess of the purchase price over the stated redemption price at maturity constitutes "premium" on that Security. Under Code § 171, the purchaser of that Security must amortize the premium over the tenn of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This will result in an increase in the gain (or decrease in the loss) to be recognized for Federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no Federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss 15 and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who inay be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS The Notes and Bonds and the City'S other outstanding general obligation notes and bonds have been rated "MIG 1" and "Aa2", respectively, by Moody's. Any explanation of the significance of such ratings may be obtained only from said ratmg agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. FINANCIAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Financial Advisor to the City in connection with the sale of the Securities. The Financial Advisor has assisted the City in the preparation ofthis Official Statement and in other matters relating to the issuance of the Securities. The fees of the Financial Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes were purchased at public sale on July 9,2012, by Country Club Bank, Prairie Village, Kansas (the "Notes Underwriter") at a price equal to the principal amount of the Notes, plus a bid premium of $6,088.50, plus accrued interest to the date of closing. The Series 2012-A Bonds were purchased at public sale on July 9, 2012, by UMB Bank, n.a., Kansas City, Missouri (the "Series 20l2-A Bonds Underwriter") at a price equal to the principal amount of the Series 2012-A Bonds plus accrued interest to the date of closing. The Series 2012-B Bonds were purchased at public sale on July 9, 2012, by UMB Bank, n.a., Kansas City, Missouri (the "Series 20l2-B Bonds Underwriter") at a price equal to the principal amount of the Series 2012-B Bonds, plus a bid premium of$15,47l.43, plus accrued interest to the date of closing. The Notes Underwriter, the Series 20l2-A Bonds Underwriter, and the Series 2012-B Bonds Underwriter are collectively referred to herein as (the "Underwriters"). 16 ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In the Note Resolution and the Bond Resolutions, the City has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same or cause the same to be transmitted to certain repositories and the Municipal Securities Rulemaking Board, as applicable. This covenant is for the benefit of and is enforceable by the owners of the Notes and Bonds. See APPENDIX B for further details concerning continuing disclosure requirements. On June 28th, 2012 the City filed with the Municipal Securities RuJemaking Board's Electronic Municipal Market Access system ("EMMA") the annual financial information and operating data required pursuant to its existing continuing disclosure undertakings and complied in a timely manner with its obligations for the fiscal year ending December 31, 2011. During the prior five years the City did not always file the annual financial information and operating data wlthin 180 days of the end of its fiscal year as required. Past failures to file the annual financial information was primarily the result of not having audited financial statements completed within 180 days of the end of the fiscal year. The required operating data was made available to the public through the City'S filing of certain official statements with the MSRB 111 April 2011 and 2010, July 2009 and 2008 and June 2007. The City has put into place procedures to ensure continued compliance with all undertakings with respect to the City's note and bond issues including acceleration of the deadline for the completion of its annual audited financial statements and the formal adoption of a post issuance compliance policy. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS By /s/____ ~R~od"'_"'_Fr'_"anz~ _____ _ Director of Finance and Administration ATTEST: /s/_____ --=Le.!.ie""u~Ann~'_'E="I""se"'_yL_ ____ _ City Clerk 17 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2011 Estimated Actual Valuation (1) 2011 Assessed Valuation Outstanding General Obligation Bonds (2) Population-2010 U.S. Census Bureau Estimate General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (4) Direct and Overlapping General Obligation Debt (5) Direct and Overlapping Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlappmg Debt to Estimated Assessed Valuation $ 2,891,461,447 $ 449,760,638 $ 63,405,000 $ $ $ $ $ $ $ 47,707· 1,329 2.19% 14.10% 1,485,000 0.00 16,120,000 66,357,521 131,247,521 2,751 4.54% 29.18% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION -"Estimated Actual Valuation". (2) Includes the Bonds. Does not mclude bonds to be refunded with proceeds from the Series 2012-B Bonds. (3) Includes the Notes. Does not include notes to be retired with proceeds from the Series 2012-A Bonds. (4) For a more detailed explanation of the overlapping debt of the other Jurisdictions, see DEBT SUMMARY -"Overlapping Debt". (5) Includes outstanding general obligation bonds and temporary notes of the City and overlapping jurisdictions. A-I GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2010 U.S. Census Bureau estimate of 47,707. The City is the county seat for Saline County which had an estimated 2010 U.S. Census Bureau population of 55,606. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Govermng Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the pollcy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Name Norman Jennings Barb Shirley Samantha Angell Kaye Crawford Aaron Householter Retirement Svstems Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2013 2015 2013 2013 2015 The City participates in the Kansas Public Employees Retirement System (KPERS) established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members, including four members appointed by the Governor subject to confirmation by the State Senate, one appointed by the President of the Senate, one appointed by the Speaker of the House of Representatives, two elected by members and retirants of the retirement system, which must be members of such system, and the State Treasurer. Members of the board of trustees serve four-year terms and elect a chairperson armually. The board of trustees appoints an Executive Director to serve as the managing officer ofKPERS and employs a staff of approximately 95 people. As of June 30, 2010, KPERS serves about 277,000 members and 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defmed benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for more than 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: A-2 (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, 85% of which comes from the State General Fund. State legislation enacted in 2003 made certain pre-1962 Board employees (which are part of a small group of pre-1962 Board and University of Kansas Hospital Authority employees known as the "TIAA Group"), special members of the State/School Group. (b) Local Group -all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. State legislation enacted in 2003 made certain pre-1962 employees of the University of Kansas Hospital Authority (which are a part of a small group of pre-1962 Board and University of Kansas Hospital Authority employees known as the "TIAA Group"), special members of the Local Group. KPERS is a qualified, governmental, § 40l(a) defmed benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5,2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans (more common in the private sector), which are funded solely by employer contributions. The City'S employees armually contribute: (a) 4% oftheir gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), or (b) 6% of their gross salary to the plan if such employees are KPERS Tier 2 members (covered employment on or after July 1,2009). The City'S contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The City's contribution is 8.54% of the employee's gross salary for calendar year 2012. The City has established membership in the Kansas Police and Fire Retirement System ("KPFRS") for its police and fire personnel. KPFRS is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. Employees contribute 7% of gross compensation and the City contributes 19.81 % of employees' gross compensation for calendar year 2012. In 2012, a number of changes to KPERS were approved, including: (a) Effective January 1,2015, the creation of a new KPERS Tier 3 category (covered employment on or after January 1, 2015) based on a cash balance plan. Each Tier 3 participant shall have a retirement annuity account to which such participant shall contribute 6% of their gross salary to the plan. The employer or State contribution varies based on longevity of participant service: (1) 3% for less than 5 years; (2) 4% for at least 5 years but less than 12 years; (3) 5% for at least 12 years but less than 24 years; and (4) 6% for 24 or more years. Such account shall receive an interest credit of 5.25% per annum, and under certain circumstances, shall receive additional interest credits. Subject to certam exceptions, a Tier 3 participant, upon retirement, shall receive a single life annuity benefit. (b) Increasing the statutory maximum employer contribution annual increase from 0.6% per year (status quo) to 0.9% per year in 2014, 1.0% m 2015, 1.1 % in 2016 and 1.2% per year by 2017. (c) Effective January 1,2014, providing additional contribution flexibility for Tier 1 participants with corresponding benefit adjustments. Cd) Effective January 1, 2014, eliminate COLA adjustments for Tier 2 participants with corresponding benefit adjustments. (e) Provide additional flexibility for alternative investments for the plan (f) Provide for a single actually-determined employer contribution rate covering all three KPERS Tiers, calculated for each KPERS group. (g) Provide new State funding sources to assist in reducing UAAL. The 2012 changes did not address the Kansas Police and Firemen's Retirement System or the Kansas Retirement System for Judges. A-3 Population The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. According to the U. S. Census Bureau, the City's cItIzens had a median age of36.4 years in 2010. The following table and graph show the popUlation for the City for selected years as provided by the U.S. Census Bureau. Police and Fire Protection Year 2010 2009 2008 2007 2006 U.S. Census Bureau Population 47,707 46,180 45,998 46,025 45,898 The CIty of Salina provides police and fire protection services to residents of the City and surrounding areas. Firefighting services are provided from four stations located throughout the City with 92 full-time firefighters. The fire department operates 36 vehicles and provides emergency medical services. The police department employs approximately 81 full-time pollce officers and operates 37 police vehicles, including patrol vehIcles, motorcycles, and Cushmans. Education The City of Salina has a very complete and diverse educational system from the pnmary level up to its hIgher educational institutions. Umfied School District No. 305 provides public education through Its eIght elementary, two middle, and two senior high schools. The District also operates alternative education, vocationaltechnical, and special education schools. Current enrollment is over 7,000. Additionally, there are a number of parochial institutions that operate two grade schools, two jumor high schools, and one senior high school. A military school is located in the City and operates both a grade school and high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a traming academy located in Salina. One pubbc library with over 230,000 volumes, two college libraries, a medical library, and a law library are located withm the City: Kansas State Universitv at Salina The Umversity offers a variety of two-and four-year aviatIOn and technology degree programs. Areas of emphasis include civil, electrical and mechamcal engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. ApproXImately 716 students are currently enrolled m the school. Kansas Weslevan Universitv Kansas Wesleyan University was founded in 1886 and is located within the CIty. Currently, Kansas Wesleyan maintains an enrollment of approximately 800 students, the majority from Kansas and sUlTounding states. The school, based on a liberal arts foundation, offers more than 27 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan IS a member of the ASSOCIated Colleges of Central Kansas, a consortium of SIX academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. A-4 Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Municipal Airport and scheduled air service is provided by SeaPort Airlines, offering weekday and weekend flights to Kansas City and Denver. Utilities and Infrastructure We star Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 330-bed regional facility divided between two Salina campuses. SRHC is an acute care facilIty for the dmgnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions . Ten banks operating a total of 23 different facilities are located 1ll the CIty. Five banks are headquartered 1ll the City and reported combined deposits in excess of $2.35 billIon as of December 31, 2011. A savmgs bank has a branch office in the City. Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, an aquatic park, an art center, a community theater, a museum, tennis courts, and ice and roller skating facilities. Two private clubs provide additional recreational opportunitIes for residents of the City. The Bicentennial Center, a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. A-5 ECONOMIC INFORMATION CONCERNING THE CITY Economic Characteristics The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, ElDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips Lighting. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas counties in 2011 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. Saline County is located in the center of one of the most productive agricultural areas in the United States. In 2007-2008, 750 farms were located on 430,000 acres. Farm crops were valued at over $38 million harvested on 210,910 acres. Cattle and milk produced was valued at over $19 million. Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build-to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 1 00% financing for land and building costs. Several major commercial projects are currently under construction in Salina. Menards home improvement store recently opened and conSists of a 26,420 square-foot warehouse with 162,340 square-foot of floor space. Fed Ex, currently located in the City, is building a new distribution center. Salina Community Theater, Great Plains Manufacturing, Salina Area Technical College, and Brown Mackie are all doing major remodeling and/or expansions. The community has 1,200 acres of industrial sites available in North Salina, the South Industrial District, and the Airport Industrial Center. Sites range in size from I-to 240 acres, and are available for aviation, manufacturing, and distribution and warehouse businesses. The Salina Airport Authority The Salina Airport Authority is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildi11gs for the purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The Salina Municipal Airport is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by A-6 Kansas State University at Salina (KSUS). The campus of KSUS is located adjacent to the Airport. The University offers degrees in professional flight training, airframe and power plant maintenance, and avionics technology. Scheduled air service is provided by SeaPort Airlines. The airline offers weekday and weekend flights to the Kansas CIty International hub. During 2011, the Airport enplaned 2,705 passengers and also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2011, the Salina Air Traffic Control Tower logged over 69,207 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of University at Salina, general aviation and military aircraft. The two fixed base operators on the field at Salina specializing in aviation fuel delivered over 2.39 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2011. As of December 31, 2010, over 70 businesses and organizations at the Salina Municipal Airport and Airport Industrial Center employed over 3,700 employees with a combined payroll in excess of$130.4 million. One of the primary functions of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, SalIne County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. Major Emplovers Industrial development during the past ten years has established a broad. industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Schwan's Food Management Salina Regional Health Center Unified School District No. 305 Exide Technologies Great Plains Manufacturing Philips Lighting Company City of Salina ElDorado National Advance Auto Parts Kasa Industrial Controls Source: Salina Chamber of Commerce Income ProductlBusiness Frozen Pizza Health Care School System Battery Manufacturer Agricultural & Landscaping Equipment Fluorescent Lamps City Government Busses/Recreational Vehicles Distribution Center Metal and Electrical Controls Fabricator Estimated Emplovment 1,850 1,082 935 800 650 600 493 255 200 200 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2009 2008 2007 2006 2005 Source: Kansas Statistical Abstract, 2010 Saline County $38,752 39,173 37,201 36,133 32,672 A-7 State of Kansas $39.173 40,022 37,775 35,772 33,145 Labor Force According to the Kansas Department of Labor, the following table shows the labor force figures for the City of Salina and the State of Kansas. Year 2012 (May) 2011 2010 2009 2008 Year 2012 (May) 2011 2010 2009 2008 Current Indebtedness City of Salina Total Labor Force EmI!loved UnemI!loved 26,007 24,439 1,568 26,263 24,555 1,708 26,156 24,434 1,722 26,783 25,193 1,590 26,469 25,422 1,047 State of Kansas Total Labor Force EmI!loved UnemI!loved 1,491,061 1,404.1 11 86,950 1,505,043 1,404,339 100,704 1,504,883 1,397,208 107,675 1,507,644 1,399,356 108,288 1,480,875 1,415,467 65,408 DEBT SUMMARY OF THE CITY Unemployment Rate 6.0% 6.5 6.6 5.9 4.0 Unemployment Rate 5.8% 6.7 7.2 7.2 4.4 The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series PurI!ose of Issue Maturitv Outstanding 07-15-02 2002-B Internal Improvements $ 1,980,000 10-01-12 $ 165,000 07-15-03 2003-A Internal Improvements 4,350,000 10-01-13 640,000 * 05-01-04 2004-A Refunding 5,585,000 08-01-15 1,170,000 07-15-04 2004-B Internal Improvements 4,053,000 10-01-12 380,000 * 07-15-05 2005-A Internal Improvements 4,210,000 10-01-13 665,000 * 03-15-06 2006-A Internal Improvements 2,200,000 10-01-26 1,650,000 07-15-06 2006-B Internal Improvements 885,000 10-01-21 ·535,000 06-15-07 2007-A Internal Improvements 6,545,000 10-01-27 5,085,000 07-15-08 2008-A Internal Improvements 3,720,000 10-01-23 3,000,000 12-15-08 2008-B Internal Improvements 3,525,000 07-01-28 3,295,000 07-15-09 2009-A Internal Improvements 23,695.000 10-01-29 20,645,000 05-01-10 2010-A Refunding & Improvement 6,875,000 10-01-25 6,100,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 7,360,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-31 6,565,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 2,365,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 3.785.000 $63,405,000 *Does not include bonds to be refunded with proceeds from the sale of the Series 2012-B Bonds. A-8 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMA nON -"Special Assessments" for a further description of special assessment financing. Temporary Notes: Temporary notes represent general obligation indebtedness payable ultimately from the City's ability to levy unlimited taxes upon all taxable tangible property within its territorial limits. The City customarily redeems temporary notes with proceeds from the sale of long-term general obligation bonds or other available funds. Final Original Date Maturity Note Amount Project Series Issued Date Amount Outstanding Street, Water, and Sewer 2011-1 07-15-11 08-01-12 $3,400,000 $ 0* Street, Water, and Sewer 2012-1 07-15-12 08-01-13 1,485,000 1.485.000 $1,485,000 *Amount outstanding ($3,400,000) to be redeemed with proceeds from the sale of the Series 2012-A Bonds and available cash from the City. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obhgation indebtedness of the City for which the City's taxing ability has been pledged. Date Issued 04-15-11 Overlapping Debt Purpose Improvements Amount of Issue $16,120,000 Final Maturitv 10-01-31 Amount Outstanding $16,120,000 According to the Saline County Clerk's office, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction' s boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. All debt outstandmg is as of June 30, 2012. Jurisdiction Salina Airport Authority U.S.D. No. 305 Saline County Amount Outstanding $26,170,000 43.200,000 o A-9 Estimated Share of the Citv Amount $26,170,000 40,187,521 $66,357,521° Percentage 100.00% 93.03 Annual Debt Payments The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Outstanding Bonds Series 2012-A Bonds Series 2012-B Bonds Year Princi[!al Interest Princi[!al Interest Princi[!al Interest Total 2012 $ 6,050,000 $ 1,054,651 $ ° $ ° $ ° $ ° $ 7,104,651 2013 5,825,000 1,891,894 130,000 49,262 385,000 47,569 8,328,725 2014 4,945,000 1,681,254 140,000 39,375 940,000 35,428 7,781,057 2015 4,475,000 1,522,566 145,000 37,975 625,000 26,028 6,831,569 2016 4,470,000 1,373,116 150,000 36,162 460,000 19,778 6,509,056 2017 4,220,000 1,222,306 150,000 33,912 485,000 15,178 6,126,396 2018 4,300,000 1,052,269 155,000 31,662 475,000 10,328 6,024,259 2019 4,415,000 871,936 155,000 29,337 235,000 5,340 5,711,613 2020 2,645,000 727,721 155,000 27,012 180,000 2,520 3.737,253 2021 2,580,000 636,776 160,000 24,843 ° ° 3,401,619 2022 2,615,000 543,266 160,000 22,202 ° ° 3,340,468 2023 2,380,000 445,304 165,000 19,243 ° ° 3,009,547 2024 2,070,000 352,060 170,000 15,943 ° ° 2,608,003 2025 1,720,000 268,366 175,000 12,373 0 0 2,175,739 2026 1,380,000 196,190 175,000 8,523 0 ° 1,759)13 2027 1,080,000 136,841 180,000 4,410 0 0 lAOl,251 2028 950,000 89,603 0 ° 0 0 1,039,603 2029 625,000 47,878 ° 0 0 0 672,878 2030 250,000 21,675 0 ° 0 0 271,675 2031 260,000 11.050 0 ° ° 0 271.050 $57,255,000 $14,146,722 $2,365,000 $392,234 $3,785,000 $162,169 $78,106,125 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Po[!ulation Ca[!ita 2011 $61,045,000 13.57% 2.11% 47,707 1,279.58 2010 60,280,000 13.44 2.09 47,707 1,263.55 2009 52,900,000 11.81 l.83 46,180 1,145.52 2008 31,645,000 7.01 l.09 45,998 687.96 2007 27,650,000 6.24 0.98 46,025 600.76 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potentIal capital improvement projects within the City and includes the respective funding sources. Based on the City's last capital improvements plan, the total cost of projects the City anticipates undertaking between now and 2014 is approximately $9l.1 million, of which approximately $6.9 million is anticipated being financed through general obligation bonds. Borrowing requirements described above do not include future subdivision improvement projects financed with general obligation special assessment temporary bonds. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City has been involved with ongoing discussions concerning contamination in certain areas within the boundaries of the Salina Airport Industrial Center. This contamination was caused by activities occurring prior to A-IO 1964, when the site served as the Shilling Air Force Base. The City, the Salina Airport Authority, and other local governmental entities are pursuing federal funds to clean up the affected areas. In the event funding cannot be secured in a timely fashion or in sufficient amounts, it may be necessary for the City to issue debt to relocate certain water wells. The exact timing and amount, if any, of such borrowing cannot be determined at this time. If City borrowing is necessary for this project, it is anticipated that utility revenue bonds will be the first type of debt considered. Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilitIes, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxmg authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Financial Statement Summary The following IS a summary of the combined revenues, expenditures, and fund balances for the City'S General Fund for the most recent available years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2008 2009 2010 2011 Property Taxes $ 2,546,938 $ 9,909,912 $ 8,764,040 $ 8,671,423 Sales Tax 11,985,856 11,668,987 11,117,078 11,767,400 Other Taxes 4,685,105 4,789,524 4,965,601 5,083,919 Intergovernmental 911.305 1,227,486 1,008,482 813,185 Charges for Services 5,793.253 5,375,308 7,193,831 7,822,307 Investment Revenue 244,769 0 0 28,972 Miscellaneous 496.742 356.249 352.308 501.260 Total Revenues $26,663,968 $33,327,466 $33,401,340 $34,688,466 Expenditures: General Government $ 3,336,261 $ 3,007,751 $ 3,549,487 $ 3,461,488 Public Safety 14,070,189 17,883,362 18,228,881 18,117,827 Public Works 5,239,844 6,345,981 6,245,355 6,132,020 Public Health and Sanitation 1,109,794 1,176,096 1,176,743 1,176,082 Culture and Recreation 2,297,431 2,294,894 2,599,921 2,734,957 Planning and Development 2,087,685 2,381,797 2,428,900 2,319,300 Capital Outlay 630.178 887.449 560.129 555,048 Total Expenditures $28,771,382 $33,977 ,330 $34,789,416 $34,496,722 Revenues Over (Under) Expenditures $(2,107,414) $ (649,864) $(1388,076) $ 191,744 Other Sources (Uses) 806,306 (292.278} (82.124} (l29.111} Net Change in Fund Balance $(1,301,108) $ (942,142) $(1,470,200) $ (62,633) Fund Balance January 1 $ 7,330,631 $ 6,029,523 $ 5,087,381 $ 3,617,181 Restatement of prior year balance 156,424 Fund Balance December 31 $ 6,029,523 $ 5,087,381 $ 3,617,181 $ 3,836,238 A-ll Assessed Valuation According to the Saline County Clerk's Office, the following table gives the November I assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Pro~ertv (I) Utilities Vehicle Valuation 2011 $367,750,803 $19,918,188 $14,685,585 $47,406,062 $449,760,638 2010 364,544,771 21.488,933 14,214,579 48,184,331 448,432,614 2009 358,979,211 24,760,806 13,730,609 50,330,252 447,800,878 2008 356,678,712 28,373,980 14,929,456 51,351,656 451,333,804 2007 342,045,389 34,507,464 16,175,634 50,548,706 443,277,193 2006 321,695,326 39,691,690 16,530,171 50,551,299 428,468,486 2005 296,537,399 38,662,356 17,624,030 49,367,870 402,191,655 (1) Beginning in 2007, certain types of personal property were removed from the tax rolls. See footnote (3) to the table in FINANCIAL INFORMATION -"Property Assessment Rates". Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City, unless otherwise noted, in the years indicated. Year 2011 2010 2009 2008 2007 2006 2005 S~ecial Assessments Residential Real Estate Equalization Ratio 12.04% (prel.) 11.89 11.67 1l.66 1l.68 11.22 1l.l6 Estimated Actual Value $2,891,461,447 2,888,659,004 2,893,359,541 2,914,775,730 2,833,709,391 2,719,391,025 2,529,377,135 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City' sdowntown area. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City mayor may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. A-12 Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2011 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Schwan's Sales (Tony's Pizza) Frozen Pizza $ 8,189,411 1.82% Coyote Garrison Salina LLC Regional Shopping Center 6,254,037 1.39% Salma Regional Health Center Hospital and Medical Offices 6,234,437 1.39% Westar Energy Utility 4,294,726 0.95% Kansas Gas Service Utility 3,762,052 0.84% Gateway Adams Inc. (Midstate Plaza) Shopping Center 3,566,208 0.79% Wal-Mart Stores (Includes Sam's) Discount Retail 3,465,983 0.77% Southwestern Bell Telephone Utility 2,655,148 0.59% Great Plains Manufacturing Agricultural Equipment 2,074,617 0.46% S&B Motels Hotel 2.064.471 0.46% $42,561,090 9.46% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Tax Collections Year 2012 (thru May) 2011 2010 2009 2008 Value $19,937,316 19,752,335 52,358,547 12,192,481 18,276,022 Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county A-13 to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount 0/0 Amount 0/0 2011 * 26.272 $10,582,043 $9,614,366 90.0% $ 9,629,140 91.00% 2010 26.022 10,425,260 9,823,578 94.2 10,118,285 97.06% 2009 25.855 10,289,701 9,831,289 95.5 10,126,228 98.41 % 2008 25.886 10,369,087 9,825,122 94.8 10,119,876 97.60% 2007 23.959 9,432,248 8,941,650 94.8 9,209,900 97.64% 2006 23.789 9,029,080 8,648,305 95.8 8,907,754 98.66% 2005 23.999 8,478,392 8,223,308 97.0 8,470,007 99.90% *Collections as of May 10, 2012 Tax Levies The City may levy taxes in accordance with the requirements of its adopted budget. The County Clerk determines property tax levies based upon the assessed valuations provided by the Appraiser and spreads the levies on the tax rolls. The followmg table gives the total tax levies for all taxing jurisdictions per $1,000.00 assessed valuation of the City for the last five years. 2007 2008 2009 2010 2011 Levy Levy Levy Levy Levy for for for for for 2008 2009 2010 2011 2012 Jurisdiction Budget Budget Budget Budget Budget City of Sahna 23.959 25.886 25.855 26.022 26.272 Salina Library 5.242 5.419 5.413 5.372 5.292 State Education & Other 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 54.990 58.547 58.495 58.913 58.820 Airport Authority 2.877 2.877 4.315 4.055 4.007 Central Kansas Extension District 1.156 1.175 1.173 1.204 1.179 Saline County 27.435 ?9.347 31.303 31.432 32.576 Total 117.159 124.751 128.054 128.498 129.646 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. The total sales tax for goods and services in the City is 8.20%, which consists of 6.3% imposed by the State, 1 % countywide local option sales tax, and .90% citywide local option sales tax. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1 % countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. In November 1998, voters within the City approved an additional .25% restricted local option sales tax to be collected through June 1, 2004 and distributed to Unified School District No. 305 to fund educational technology. The voters renewed the .25% local option sales tax and are now using those collections for various city capital improvements. A-14 In November 2008, voters in the City of Salina approved a .40% citywide retailers dedicated sales tax to pay the costs of varlOUS City capital improvements including constructing, operating and maintaining a $12.5 million aquatic park. The .40% sales tax replaced the 2004.25% sales tax on April 1, 2009 and terminates ten years after its commencement. . The City of Salina deposits sales tax receipts from its 1992 tax into its General Fund. Sales tax receipts are used for funding general operating expenditures of the City and capital improvement projects. The following table lists the local-option sales tax receipts of the City of Salina in the years indicated. Year 2008 2009 2010 2011 2004 .25% Citywide Local Option Sales Tax Receipts $2,588,731 2012 (thru May) 2008 .40% Citywide Local Option Sales Tax Receipts $ 0 3,379,938 (1) 3,861.809 4.080,342 1,779,603 1992 .50% Citywide Local Option Sales Tax Receipts $5,177,462 4,987,415 4,818,398 5,076,751 2,215,817 City's Portion of 1 % Countywide Local Option Sales Tax Receipts $6,808,395 6,703,839 6,339.236 6,690,649 2,932,739 (1) The 2008 .40% sales tax became effective April 1, 2009, at which time the 2004 sales tax stopped. This figure is the combined total receipts of the 2004 sales tax and the 2008 sales tax for 2009. Source: City Clerk Budgeting Procedures Applicable Kansas statutes require that budgets be legally adopted for all funds (including debt service and enterprise funds) unless exempted by a specific statute. All budgets are prepared utilizing the modified accrual basis further modified by the encumbrance method of accountmg. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The statutes provide that the budget for the succeeding calendar year must be prepared on or before August 1 and publIshed on or before August 5 of each year. A public heanng IS required to be held on or before August 15, with the final budget being adopted on or before August 25 of each year. Original appropriations may be modified by supplemental appropriations and transfers among budget categories. The City Commission must approve all significant changes. Kansas law prohibits cities and other governmental units from creating indebtedness unless there is money on hand in the proper fund and unencumbered by previous commitments with which to pay the indebtedness. The execution of a contract, or the issuing of a purchase order, automatically encumbers the money in the fund for the payment of the amount represented by the commitment. It makes no difference that the amount may not have to be paid until more moneys are in the fund or until the following year. An exceptlOn to this cash basis law is the issuance of debt, in the form of bonds, notes, or warrants, pursuant to statutory authority. referendum or by the State Board of Tax Appeals. In the event debt is issued, funds need not be on hand for future payments. Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultura11and, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. A-15 Property Assessment Rates In order to detennine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 2S% and on residential property from 12% to II.S%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Propertv: Residential Commercial and Industrlal-Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Propertv: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Eqmpment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Propertv Exempt: II.S% 2S.0 30.0 2S.0 12.0 12.0 30.0 II.S% 30.0 2S.0 2S.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portIOns thereof. are exempt from taxation provided certain statutory requirements are met: religIOUS, educatIOnal, lrterary, scientific, benevolent, alunmi associations, veterans' organizations. or charitable purposes, including parsonages and commumty service organizations providmg humamtarian services. (1) Agricultural land is valued based on the productivity value ofthe property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4). (7). (8), or (10) of Subsection C of Section SOl of the federal internal revenue code. This bill specifically established that pnvate, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildmgs or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem propeliy taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existmg business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the K<LllSaS Department of Revenue conducts a study to compare the assessed valuatlOn of real property to estImated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2011 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 12.04%, and commercial and industrial property was 28.7S%. A-16 APPENDIXB Form of Continuiug Disclosure Instructions FORM OF CONTINUING DISCLOSURE INSTRUCTIONS $1,485,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 DATED JULY 15, 2012 THESE CONTINUING DISCLOSURE INSTRUCTIONS (the "Disclosure Instructions") are executed and delivered by the Issuer in connection with the issuance of the above-described notes (the "Notes") which are being issued simultaneously herewith pursuant to the Note Resolution, in which the Issuer covenants to enter into this undertaking to provide notice of certain material events with respect to the Notes in order to assist the Participating Underwriter in complying with the provisions of the SEC Rule. The Issuer is the only "obligated person" with responsibility for continuing disclosure with respect to the Notes. Section 1. Definitions. In addition to the definitions Set forth in the Note Resolunon. which apply to any capItalized tenn used in these Disclosure Instructions. unless otherwise defined herein, the following capitalized tenns shall have the following meanings: "Beneficial Owner" means any registered owner of any Notes and any person which (a) has the power. directly or indirectly. to vote or consent with respect to, or to dispose of ownership of, any Notes (including persons holding Notes through nominees. deposllones or other intemlediaries), or (b) is treated as the owner of any Notes for federal income tax purposes. "Designated Agent" means Gilmore &. BelL P.c. or one or more other entities deSignated in wntmg by the Issuer to serve as a designated agent of the Issuer for purposes of these Disclosure Instructions. "Dissemination Agent" means any entHy designated m writing by the Issuer to serve as dissemmatlOn agent pursuant to these Disclosure InstructIOns and which has filed with the Issuer a written acceptance of such designatlon substantJally in the fonn attached hereto as Exhibit A. "EMMA" means the Electronic Municipal Market Access system for municipal securitIes dIsclosures establIshed and maintained by the MSRB. whlch can be accessed at wwv. emma.msrb.ojJ;. "'Fiscal Year" means the one year period endmg December 31, or such other date or dates as may be adopted by the lssuer for Its general accountmg purposes "Issuer" means the ell) of SalJJ1a.. Kansas. and any successors or assIgns. "'Material Events" means any of the events listed in Section 2(a) hereof. "MSRB" means the MuniCIpal SecuritJes Rulemakmg Board. "'?\fote Reso}ution"~ l11eans the resolutIon of the governing body of th~ Issuer authorizing the issuance of the Notes. "Official Statement" means the Issuer's Official Statement for the Notes. B-1 "Participating Underwriter" means any of the original underwriters of the Notes required to comply with the SEC Rule in connection with offering of the Notes. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission of the United States. "SEC Rule" means Rule ISc2-12(b)(S) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. . Section 2. Reporting of Material Events. (a) Pursuant to the provisions of this Section, the lssuer shall give, or cause the Dissemination Agent, if any, to give. to the Repository within 10 Business Days after the occurrence of any of the following events with respect to the Notes, notice of the following events: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (S) substitution of credit or liquidity providers, or theIr failure to perform; (6) adverse tax opinions ; the issuance by the lnternal Revenue Service of proposed or final detenninations of taxability, Notices of Proposed lssue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Note, or other material events affecting the tax-exempt status of the Notes; (7). modifications to rights of Owners, if material; (8) bond calls. If material, and tender offers; (9) defeasances:. (l0) release, substitutIOn or sale of property secunng repayment of the Notes. If material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer; (13) the consummatIOn of a merger, consolidation. or acquiSItIOn involving the Issuer or the sale of all or substantially all of the assets of the lssuer, other than 111 the ordinary course of busmess, the entry into a defimtive agreement to undertake such an acnon or the tenninatIOn of a definitIve a1,.'Teement relating to any such actions. other than pursuant to its tenns. if material: and (14) app0111tment of a successor or additional Paymg Agent or the change of name of the Paying Agent, if material. (b) Notwithstanding the foregoing. notIce of Material Events described 111 subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Notes pursuant to the Note ResolutIon. Section 3. Dissemination Agent. {a) General. The Issuer may, from time to time, appomt or engage a Dissemination Agent to assist It in carrying out Its obligations under these Disclosure lnstructJOns, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. (b) Material Event Notices. B-2 (I) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, infonn such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) The Issuer will promptly respond in writing to any such request. Whenever the Issuer obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent pursuant to this subsection (c) or otherwise, the Issuer shall promptly detennine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). If the Issuer has detennined that knowledge of an event is listed in (2), (7), (10) or (13) of the definition of a Material Event, is not material, the Issuer shall notify the Dissemination Agent in writing not to report the OCCUlTence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has bee!: giver: written instructions by the Issuer to report the occurrence of a Material Event, the DIssemination Agent shall file a notice of such occurrence with the Repository withm 10 Business Days after the occurrence, with copies to the Issuer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under thIS subsection any earlier than the notIce (if any) of the underlying event is given to the Owners of affected Notes pursuant to the Note Resolution. (c) Duties, Immunities and Liabilities 0.1 Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in these DIsclosure Instructions, and the Issuer agrees to indemnify and save the DIssemination Agent, Its officers, dIrectors, employees and agents. hanl1less against any loss, expense and liabilItIes whIch It may mcur arismg out of or m the exercise or perfonnance of its powers and dutIes hereunder, mcluding the costs and expenses (mcluding attorneys fees) of defending against any clmm of hability. but excluding liabilitIes due to the Dissemination Agent's negligence or willful misconduct. The obligatIons of the Issuer under this SectlOn shall survive resignation or removal of the DisseminatlOn Agent and payment of the Notes. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to these Disclosure InstructlOns. (d) Other Designated Agents. The Issuer may, from time to time. appomt or designate a DeSIgnated Agent to submIt Material Event notlces. and other notlces or reports pursuant to these Disclosure Instructions. The Issuer hereby appoints the Dissemmation Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Material Event notices, and other notices or reports pursuant tC) these Disclosure Instructions. The Issuer may revoke this deSIgnation at any time upon WrItten notice to the Designated Agent. Section 4. Termination of Reporting Obligation. The Issuer's obligations under these Disclosure Instructions shall tenninate upon the legal defeasance, prior redemptlOn or payment in full of all of the Notes. If the Issuer's obligations hereunder are assumed in full by some other entIty as pennitted in the Note Resolution, such person shall be responsible for compliance with under these Disclosure Instructions in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such temlination or substitution occurs prior to the final matunty of the Notes, the Issuer shall give notice of such tennination or substitution in the same manner as for a Material Event under Section 2(b). B-3 Section 5. Amendment; Waiver. Notwithstanding any other provision of these Disclosure Instructions, the Issuer and the Dissemination Agent, if any, may amend of these Disclosure Instructions (and the Dissemination Agent shall not unreasonably refuse to execute any amendment so requested by the Issuer) and any provision of these Disclosure Instructions may be waived, provided that: (a) Bond Counselor other counsel experienced in federal securities law matters provides the Issuer and the Dissemination Agent, if any, with its opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to these Disclosure Instructions; (b) if the amendment or waiver relates to Sections 2(a), it may only be made in connection with a change in circumstances that arises from a change in law or legal requirements, or change in the identity, nature or status of an obligated person with respect to the Notes, or the type of business conducted; and (c) the amendment or waiver is either (1) approved by the Owners of the Notes in the same manner as provided in the Note Resolution with consent of the Owners, or (2) does not in the opinion of Bond Counsel materially impair the interests of the Owners or Beneficial Owners of the Notes. In the event of any amendment or waiver of a provision of these Disclosure Instructions, the Issuer shall be given in the same manner as for a Material Event. Section 6. Additional Information. Nothing in these Disclosure Instructions shall be deemed to prevent the Issuer from disseminating any other infonnation: using the means of dissemination set forth in these Disclosure Instructions or any other means of communication, or including any other infonnatlOn in any notice of occurrence of a Material Event, in addition to that which is required by these Disclosure Instructions. If the Issuer chooses to l11clude any l11f01111ation 111 any notice of occun-ence of a Matenal Event, in addition to that which is specifically reqUJred by these Disclosure Instructions, the Issuer shall have no obligation under these Disclosure InstructlOl1S to update such infonnation or include it in any future notice of occurrence of a Matenal Event. Section 7. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any prOVlSlOn of these DIsclosure InstructIOns, the Participating Underwriter or any Beneficial Owner of the Notes may take such actions as may be necessary and appropriate, including seeking mandamus or specific perfonnance by court order, to cause the Issuer or the DIssemination Agent. if any. as the case may be. to comply with its obligations under these Disclosure InstructIOns. Noncompliance with the provisions of these Disclosure Instructlons shall not be deemed an Event of Default under the Note Resolution, and the sole remedy under these Disclosure InstructJons 1D the event of any failure of the Issuer or the DisseminatIon Agent. if any. to comply with these Disclosure Instructions shall be an action to compeJ perfonnance. Section 8. Notices. Any notIces or communications to or among any of the parties referenced in these Dlsclosure Instructions may he given as follows (d) To the Issuer at: 300 West Ash Salma, Kansas 67402 Fax: (785)309-5738 Attention: Clerk (b) To the PartiCipating UnderwTiter at the address set forth in the Note Resolution or such other address as is furnished in writmg to the other parties referenced herein. B-4 (c) To the Dissemination Agent at the address set forth on Exhibit A attached hereto. Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 9. Electronic Transactions. Actions taken hereunder and the arrangement desclibed herein may be conducted and related documents may be stored by electronic means. Section 10. Beneficiaries. These Disclosure Instructions shall inure solely to the benefit of the Issuer, the Dissem1l1ation Agent, if any, the Participating Undenvriter and Beneficial Owners from time to time of the Notes, and shall create no rights in any other person or entity. Section 11. Severability. If any provision in these Disclosure Instructions, the Note Resolution or the Notes relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 12. Governing Law. These Disclosure Instructions shall be governed by 3!1d construed in accordance with the laws of the State of Kansas. Dated: July 26, 2012. CITY OF SALINA, KA.NSAS EXHIBIT A ACCEPT ANCE OF DISSEMINATION AGENT Name of Issuer: Name of Note Issue: Dissemination Agent: City of Salina, Kansas $1,485.000 General Obligation Temporal)' Notes, Selies 2012-1, dated as of July 15,2012 Notice Address of Dissemination Agent: __ ~ ___ ~ ___ . having been duly appoimed by the City of 8a1ma, Kansas to act in the capacity of DIssemmation Agent pursuant to the Continumg DIsclosure InstructlOl1s tc whIch this acceptance IS attached. accepts such dutIes and responsibilmes set forth therem. Dated: B-5 FORM OF CONTINUING DISCLOSURE INSTRUCTIONS CITY OF SALINA, KANSAS $[2,365,000] GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A . $[3,760,000] GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULY 15, 2012 THESE CONTINUING DISCLOSURE INSTRUCTIONS (the "Disclosure Instructions") are executed and delivered by the Issuer in connection with the issuance of the above-described bonds (the "Bonds") which are being issued simultaneously herewith as of July 26, 2012, pursuant to the Bond Resolution, in which the Issuer covenants to enter mto this undertaking to provide certain financial and other infonnation with respect to the Bonds m order to assist the Partlcipating Underwriter in complying with the provisions of the SEC .Rule. The Issuer is the only "obligated person" with responsibility for continumg dlsclosure with respect to the Bonds. Section 1. Definitions. In additJOn to the definitions set forth in the Bond Resolution, whlch apply to any capitalized tenn used in these Disclosure Instructions, unless otherwise defined herein. the followmg capltahzed ten11S shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described m, Sectioll 2 of these Disclosure Instructions. "Beneficial Owner" means any registered owner of any Bonds and any person which (a) has the power. directly or indirectly. to vote or consent with respect to, or to dispose of ownership of. any Bonds (mcludmg persons holding Bonds through n0111mees, depositones or other inten11edwries). or (b) IS treated as the owner of any Bonds for federal income tax purposes. "Bond Resolution" means collectively, the ordinances and the resolutJOns of the governing body of the issuer authorizing the issuance of the Bonds. "CAFR" means the Issuer's Comprehensive Annual Fmancial Report. "Designated Agent" meam Gilmore & Bell, P.c. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for pUll,oses of these Disclosure Instructl ons. "Dissemination Agent" means any entity deSIgnated m wntmg by the Issuer to serve as dissemination agent pursuant to these Disclosure lnstructions and which has filed with the Issuer a written acceptance of such designation substantially in the form attached hereto as Exhibit B. B-6 "'EMMA" means the Electronic Municipal Market Access system for municipal securitIes disclosures established and maintained by the MSRB, which can be accessed at \vwv.'.emma.111srb.or!l. "'Financial Information" means the financial infonnation of the Issuer described 111 Section 2(a)(]) hereof. "Fiscal Year" means the one year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units. as in effect at the time of the preparation of the Financiallnfonnation. "'Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any ofthe events listed in Section 3(a) hereof. "MSRB" means the Municipal Securities Rulem·al<ing Board. "Official Statement" means the Issuer's Official Statement for the Bonds. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "'Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the SEC Rule In connection with offenng oftheBonds. "Repository" means the MSRB VIa EMMA. "SEC" means the SecuritIes and Exchange CommIssIOn of the Umted States. "SEC Rule" means Rule lSc2-12(b)(5) adopted by the SEC under the SecuritIes Exchange Act of 1934. as the same may be amended from time to time. Section 2. Provision of Annual Reports. (a) The Issuer shall. or shall cause the DIsseminatIOn Agent to, not later than 180 days after tl1e end of the Issuer's FIscal Year. commenCl11g with the Fiscal Year ended 111 2012. file with the Reposllory the Issuer', CAFR. whIch wiIi contaIn the FInancIal InfonnatIOn and Operating Data (COllectIvely. the "Annual Report'·J. as follows: (] ! Financial Information. The financial statements of the Issuer for such pnor FIscal Year. accompamed by an audit report resulting from an audit conducted by an Independent Accountant in confonmty with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all governmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accountmg basis is contained in Appendix A to the Official Statement. If such audit report is not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual RepOli shall contain unaudited financial statements and the audit report and accompanying financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Infonnation may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of B-7 such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as ofthe end of the Fiscal Year of substantially all of the infon11ation and data contained in the following sections of Appendix A to the Official Statement: (i) Debt Summary (ii) Tax Levies (iii) Assessed Valuation (iv) Estimated Actual Valuation (v) Tax Collections (vi) Largest Taxpayers. together with any material adverse changes m the other portions of the section entitled "FINANCIAL INFORMATION ." Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement. it must be available from the MSRB via EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Repon may be submitted as a single document or as separate documents compnsing a package, and may cross-reference other infonnation as provided in thIS SectIOn; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date reqUlred above for the fihng of the Annual Report if they are not available by that date. If the Issuer's Fiscal '(' ear changes, Jt shall give notice of such change in the same manner as for a Matenal Event under Section 3(b). (b) If no Dissemination Agent has been appomted. the issuer shall file the Annual Repon as specified by Section 2(a) hereof; or if the Annual Report is not filed within the tnne period specified m Section 2(a) hereof. the Issuer shall send a notice to each Repository in substantially the fonn attached as Exhibit A within 10 Business Days after the date the Annual Report is required to be filed as set f01ih herein. Section 3. Reporting of Material Events. (a) Pursuant to the prOVIsions of thIS Section, the Issuer shall gIve, or cause the D1sseminatlOn Agent, if any, to give, to the Repository within 10 Business Days after the occurrence of any of the followll1g events wIth respect to the Bonds. notice of the followll1g events: (1) prinCIpal and interest payment delinquencies: (2) non-payment related defaults, if material: (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credil enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or theIr failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final detenninations of taxability, NotIces of Proposed Issue (IRS F orn1 5701-TEB) or other material notices or determinations with respect to the tax status of the Bond, or other matenal events affecting the tax-exempt status of the Bonds; (7) modifications to rights of Owners, if material; (8) bond calls, if material, and tender offers; B-8 (9) defeasances; (10) release, substitution or sale of property secunng repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer; (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the tennination of a definitive agreement relating to any such actions, other than pursuant to its tenns, if material; and (14) appointment of a successor or additional Paying Agent or the change of name of the Paying Agent, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. Section 4. Dissemination Agent. (a) General. The Issuer may. from time to tIme. appoint or engage a Dissemination Agent to assIst it in carrying out its obligations under these Disclosure Instructions, and may dIscharge any such Dissemination Agent, with or without appointing a successor DissemmatlOn Agent. (b) Annual Reports. If a Dissemination Agent is appointed, not later than 15 Busmess Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shalJ provide the Annual Report to the Disseminatlon Agent or the Reposltory. The DIssemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to these DIsclosure Instructlons, statmg the date 11 was filed, or that the Issuer has certified to the Dissenllnatlon Agent that the Issuer has filed the Annual Report with the Repository. If the DIssemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report with the Repository, by the date reqUIred 111 Section 2(a), the DlsseminatJon Agent shall send a notice to the RepOSItory in substantially the fonn attached as Exhibit A. (c) Material Event Notices. (I) The DIssemination Agent shall, promptly after obtalll111g actual knowledge of the occun-ence of any event that it beheves may constitute a Material Event, contact the chief finanClal officer of the Issuer or his or her desih'l1ee, or such other person as the Issuer shall designate 111 writing to the Dissemination Agent from time to time, infom1 such person of the event. and request that the Issuer promptly notify the DlsseminatJOl1 Agent 111 writing whether or not to report the event pursuant to Section 4(c)(3J (2) Whenever the Issuer obtains knowledge of the occurrence of an event. because of a notice from the Dissemination Agent pursuant to Section 4(c)(J) or otherwise. the Issuer shall promptly determll1e If such event constItutes a Material Event and shall promptly notify the DIssemination Agent of such detennination. If appropriate. such wnting shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occun-ence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer. Notwithstanding the foregoing, notice of Material Events described in Sections B-9 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. (d) Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in these Disclosure Instructions, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim ofliability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to these Disclosure Instructions. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer hereby appoints the Dissemination l'~gent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Matenal Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under these DIsclosure Instructions shall tenninate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as pennitted in the Bond Resolution, such person shall be responsible for compliance with under these Disclosure Instructions in the same manner as if it were the Issuer. and the Issuer shall have no further responsibility hereunder. If such tennination or substitution occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3(b). Section 6. Amendment; Waiver. Notwithstanding any other provision of these Disclosure Instructions, the Issuer and the Dissem1l1ation Agent, if any, may amend of these Disclosure Instructions (and the Dissem1l1ation Agent shall not unreasonably refuse to execute any amendment so requested by the Issuer) and any prOVIsion of these Disclosure Instructions may be waived, provided that: (a) Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer and the Dissemination Agent, If any. WIth its opinion that the undertaking of the Issuer contained herein, as so amended or after glVl11g effect to such waiver, IS in compliance with the SEC Rule and all current amendments thereto and J11terpretations thereof that are applicable to these Disclosure Instructions: (b) if the amendment or waiver relates to Sections 2(a) or 3(a), it may only be made lJ1 connectIOn \vith a change in circumstances that arises from a change in law or legal requirements. or change in the identity. nature or status of an obligated person with respect to the Bonds, or the type of busmess conducted; and (c) the amendment or waiver I seither (1) approved by the Owners of the Bonds in the same manner as provided in the Bond Resolution with consent of the Owners, or (2) does not in the opinion of Bond C ounselmaterially impair the interests of the Owners or Beneficia! Owners of the Bonds. If there is an amendment or waiver of a provision of these Disclosure Instructions, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of Financial Information or Operating Data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (a) notice of such change shall be given in the same manner as for a B-IO Material Event under Section 3(b), and (b) the Annual Report for the year in which the change is made should present a comparison (in narrative fonn and also, if feasible, in quantitative fonn) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basIs of the fonner accounting principles. Section 7. Additional Information. Nothing in these Disclosure Instructions shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in these Disclosure Instructions or any other means of communication, or including any other infonnation in any Annual Rep011 or notice of occurrence of a Material Event, in addition to that which is required by these Disclosure Instructions. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by these Disclosure instructions, the Issuer shall have no obligation under these Disclosure Instructions to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any prOVIsion of these Disclosure Instructions, the Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specIfic perfonnance by court order, to cause the Issuer 01" the DisseminatlOn Agent, if any. as the case may be, to comply with its obhgations under these Disclosure Instructions. Noncompliance with the provisions of these Disclosure Instructions shall not be deemed an Event of Default under the Bond Resolution, and the sole remedy under these Disclosure instructJons In the event of any failure of the issuer or the Dissemination Agent. if any. to compJy with these Disclosure Instructions shall be an action to compeJ perfonnance. Section 9. Notices. Any notIces or commul1lcations to or among allY of the partIes referenced m these Disclosure Instructions may be given as follows: (a) To the Issuer at: 300 West Ash Salma, Kansas 67402 Fax: (7851309-573S Attention: Clerk (b) To the Partlclpatll1g: Underwnter( s) at the address set forth 111 the Bond Resolutions or such other address as is fumished in writmg to the other partIes referenced herein. (c:) To the Dissemination Agem at the address set forth on Exhibit B attached hereto. AllY person may, by written notice to the other persons hsted above, designate a dIfferent address or telephone number(s) to which subsequent notices or coml11UTIlcatJOl18 should be sent Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Section 11. Beneficiaries. These Disclosure Instructions shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, the Participat1l1g Underwnter and Beneficial Owners from time to tnne of the Bonds, and shall create no rights in any other person or entity. B-ll Section 12. Severability. If any prOVlSlon in these Disclosure Instructions, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13. Governing Law. These Disclosure Instructions shall be governed by and construed in accordance with the laws of the State of Kansas. CITY OF SALINA, KANSAS EXHIBIT A NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Name of Bond Issue: Name of Obligated Person: Date of Issuance: City of Salina, Kansas $[2.365.000] General Obligation Internal Improvement Bonds, Series 2012-A and $[3,760,000J General Obligation Refunding Bonds, Series 2012-B, dated as ofJuly 15,2012 CIty of Salina, Kansas July 26. 2012 NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as reqUIred by the Continuing Disclosure hlstructlons dated as of July 26. 2012. The Issuer anticipates that the Annual Report will be filed by _____ _ Dated: Name of Issuer: N arne of Bond Issue: Dissemination Agent: CITY OF SALINA, KANSAS EXHIBITB ACCEPTANCE OF DISSEMINATION AGENT City of SalIna. Kansas $[2.365,0001 General Obhgatlon Internal Improvement Bonds. Senes 2012-A and $[3,760.000J General Obhgation Refunding Bonds, Series 20l2-B. dated as oOuly 15.2012 Notice Address of Dissemination Agent: ___________ , having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Continuing Disclosure Instructions to which this acceptance is attached, accepts such duties and responsibilities set forth therein. B-12 APPENDIXC Financial Statement~ SInce 1992. the Cny's comprehensive annual financIal repOJ1s have receIved the Certificate of AchIevement fOJ Excellence In FmancIai Reportmg award by the Government FInance Officers AssocIation. The CertIficate of AchIevement wa, developed to encourage governmental units to prepare and pubhsh an easily readable and understandable financIal report covenng all funds and financial transactJons of the government dunng the fiscal year, The followmg appendr\ contains audJted financIal statement, for the CIty of Salina's pnmary governmental functlOJ1<; for fiscal year endmg December 31. 2011, At the tIme this report was completed the audIted financial statements of two component Ul11ts~jomt ventures of the Cny. the Sa1111a AIrpOrt Authonty and SalmaJSaline County Health Department. were not available and as a result have not been incorporated into the enclosed audit. The audJted financial statements for the Salma Airport Authority have subsequently been completed and can be found on the MU111cipai Secunty Rulemakmg Board's EMMA website. The audited financial statement for the Health Department have been delayed due to recent structural damage to the Health Department's admimstratJve office:" Upon completion of the Health Departments audit. the eny will update Ib audit and release It, ComprehensIve Annual Fmancial Report. Mayor and City Commissioners City of Salina, Kansas INDEPENDENT AUDITOR'S REPORT ON THE BASIC FINANCIAL STATEMENTS MIZE.-.. HOUSER CXOMPANYr.A, We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2011, which collectively comprise the baSIC financial statements of the City's pnmary government as listed in the table of contents, These finanCial statements are the responSibility of the City's management Our responsibility is to express opinions on these basic finanCial statements based on our audit We conducted our audit In accordance with auditing standards generally accepted In the United States of Amenca and the "Kansas MuniCipal Audit Guide," Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the finanCial statements are free of matenal misstatement. An audit Includes consideration of Internal control over financial reporting as a basis for designing audit procedures that are approPriate In the Circumstances, but not for the purpose of expressing an opInion on the effectiveness of the Cit~{s Internal control over financial reporting Accordingly, we express no such opinion An audit includes examining on a test baSIS, eVidence supporting the amounts and disclosures In the finanCial statements An audit also Includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall baSIC finanCial statement presentation We beheve that our audit prOVides a reasonable baSIS for our opinions. Tne finanCial statements referred to preViously Include only the pnmary government of the City of Salina, Kansas, which consist of all funds, organizations, Institutions, agencies, departments, and offices that compnse the City's legal entity The flnancia! statements do not include financial data for the City's legally separate component units. which accounting prinCiples generally accepted in the United States of America require to be reported with the finanCial data of the City's pnrnary government As a result, the pnmary government finanCial statements do not purport to, and do not, present fairly the finanCial position of the reporting entity of the City of Sahna Kansas as 0; December 31, 201~, the changes In Its finanCial pOSition, or, where applicable its cash flows for the year tnen ended In conformity with accounting prinCiples generally accepted In the United States of America In accordance With accounting prinCiples generally accepted In the United States of America, the City of Salina, Kansas has Issued separate reporting entity finanCial statements for which we have Issued our report dated June 22, 2012 In our oOlnlon the flnancls! ststemems I'eferrec tc' above present fairly, j" ali matenal :espects the respective finanCial POSition at tne governmental actiVitieS, the bUSiness-type activities, each major fund, and the aggregate remaining fund information of the Clt)1 of Salins, Kansas. as of December 31 2011 and the respective changes In finanCial POSition and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, Flood g Drainage Improvement Fund, Tounsm and Convention Fund. Special Gas Fund, Bicentennial Center Fund and the Sales Tax Capital Fund for the year then ended In conformity with accounting pnnclpies generaliy accepted in the United States of America v,ruw mizehQ\lc::ej cr.ro := mnco@mizenouser.com 534 S Kansas Ave, Suite 700 Ii Topeka, KS 66603-3465 .785,233,0536 P .785,233,1078 f 534 S Kansas Ave, Suite 400 II Topeka, KS 66603-3454 11785,234,5573 P II 785,234,1037 f 7101 College Blvd, Suite 900 • Overland Park, KS 66210-1984.913.451.1882 P • 913.451.2211 f 120 E Ninth II Lawrence, KS 66044-2682 • 785,842,8844 P Ii 785.842.9049 f 900 fill assachusetts, Suite 30111 Lawrence, KS 66044-2868 11785,749.5050 P Ii 785,749,5061 f Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3 through 13 and the schedules of funding progress on page 52 be presented to supplement the basic financial statements. Such information, although not a part of the basIc financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basIc financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively compnse the City's financial statements as a whole. The introductory section. combining and Individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlYing accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures In accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated In all material respects in relation to the financial statements as a whole The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of ~e ?;;~c;;:nts;a:;5~ not express an opinion or provide any assuranre on them June 22. 2012 2 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Management Discussion and Analysis This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2011. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well rounded picture of the City's financial condition. Financial Highlights • Net Assets increased by $5,912,298. Governmental Net Assets declined by $463,769, while Business Type Net Assets Increased by $6,376,067. (After prior year adjustments) • Liabilities also increased substantially due to the issuance of $16,120,000 in Revenue Bonds. • Sales taxes grew modestly (4.1 %). a reversal of the previous two years of decline. • In Business Type Activities, the Water and Sewer fund saw asset growth, despite increases in operating expenditures, due to good revenue production. • The multi-year decline in fund balance for the General Fund was halted, with a slight recovery • Tax delinquency rates have declined to a relatively normal level of 2.7%. • Personal property taxes continued to decline as a result of the exemption of business equipment from the tax rolls. • Investment revenues continue to be very minimal, but levels have stabilized. • The unemployment rate declined from 6.4% to 6.3%. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements. and are essential for the reader's understanding of the financial statements. Other supplementary information, Including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City's operations uSing the accrual basis of accounting, the same basIs as is used by private sector businesses These statements focus on the long-term financial picture of the City as a wllole The Statement of Net Assets reports all of the City's assets and liabilities. Net assets. the difference between assets and liabilities, are an important measure of the City's overall financial health Net assets represent the totai accumulated and unused resources available to the City for the purpose of providing services Over time, the increases and decreases in net assets can be monitored to determine if the City's financial position IS improving or deteriorating. The Statement of Activities shows how the net assets have changed during the fiscal year. One unique feature of thiS statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business type activities. Governmental activities are the operations of the City generally supported by taxes, such as Publfc Safety (Police, Fire, and EMS), Public Works, Public Health, and Culture & Recreation. Business-type Activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include Water and Sewer, Refuse collection, the Golf Course, and operation of the City Solid Waste Facility. 3 Fund Fmancial Statements CITY OF SALINA. KANSAS Year Ended December 31, 2011 (Unaudited) The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view prOVided by the government-wide statements. Major Governmental Funds are presented in individual columns, while Non-major Governmental Funds are aggregated into an "Other Governmental Funds" column. A combining statement fc~ the Non-major funds is presentee as supplementary informatiorl in the back 07 the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting, and are used to account for bUSiness-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities. but In greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal Service funds are used to account for the cost of operations shared by vanous departments of the City. The city operates five Internal service funds Three of these are for self-insurance activity: Risk Management, Workers' Compensation Reserve. and Health Insurance. The remaining two account for our Information Systems activity and for the Central Garage operation A combining statement for these Internal service funds can be found in the supplementary Information following the notes to the finanCial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of FidUCiary Fund in which liabilities always equal assets, and thus there are no net assets. The City of Salina operates nine Agency funds. Schedules for these funds may be viewed in the supplementary section of thiS report Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal. may be used Permanent tunas operated by the City Include the Cemetery and Mausoleum Endowments and the Tn-centennial CommiSSion fund Notes to the Financial Statements The notes to the financial statements are an Integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic finanCial statements and the notes described above, thiS report aiso presents the general fund and major special revenue fund's budgetary statements as required supplementary Information directly following the notes to the basic finanCial statements. The combining statements for the non-major funds are shown after the reqUired supplementary information. Finally, the statistical section Includes selected statistical data about the City's operations and economy. The City as a Whole This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. 4 Tax Base and Economy CITY OF SALINA, KANSAS Year Ended December 31, 2011 (Unaudited) The City of Salina relies on three major groups of revenues to support it's operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for service, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to Govemmental Activities, while charges for services apply to both Governmental (36%) and Business-type (64%) activities. Charges for Services account for about 46% ($37,249,107) of the City's revenue stream. Charges for Service depend on both the rate that is set for the activity, as well as the volume of services provided. The following table illustrates service volume and rate adjustments for some of the more significant services for the year ending December 31,2011. Description 2010 Volume 2011 Volume Change Rate Comments Golf Course: Rounds, 18 Hole 30.420 26.782 (3,638) No fee increase Rounds, Par3 3,707 3,368 (339) No fee Increase Annual Golf Members 33 18 (15) No fee increase River Festival Gate Count 64,835 72,664 7,829 $2.00 per button increase Development Services Inspections Performed 6,391 5,473 (918) Permits Issued 3,031 2,678 (353) Finance/Administration EMS Runs Billed 3,473 4,003 530 Five percent increase Licenses Issued 1,296 1.358 62 Water Billings Issued 238,635 239.448 813 Water Metered (in Billion Gallons) 1.97 NA Parks and Recreation Kenwood Cove Attendance 119,000 111,063 (7,937) No fee increase Youth Teams 164 178 14 Adult Teams 300 308 8 Special Pops Programs 109 114 5 Trips/Tours offered 31 54 23 Youth Tournament Teams 424 388 (36) Adult Tournament Teams 140 164 24 Public Works Sanitation Customers 14,520 14,604 84 3% fee increase Landfill Tonnage 94,907 96,178 1,271 No fee Increase Street Cut and Excavation Permits 181 201 20 Concrete Permits 155 143 (12) Water and Wastewater $2.00 per month per Water Treated (Billion Gallons) 2.30 2.30 typical user $2.00 per month per Wastewater Treated (Billion Gallons) 1 50 1,45 (0.05) tYPical user **In general, if not specified in the table, rates were adjusted an average of about 2% for most services. 5 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Sales taxes are the next largest component of the revenue mix, providing 20% ($15,847,742) of the total revenues. This is a slightly smaller portion than 2010 (21 %). The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1% sales tax. Forty-four percent, (a rate of .4%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the Countywide tax is available for general purposes. Total revenue from the sales tax in 2011 was $15,847,742, up from $ 15,224,888 in 2010. This 4.1% increase follows a 4.7% decline (after adjustment for a change in rate) for 2010. A number of factors affect the sales tax. First are the regional and local economic conditions and relationships. These are most directly reflected in the proceeds of the City-wide tax, which grew by 5.8%. The City was unfavorably affected by the formula used to distribute the County-wide sales tax among participating jurisdictions (only Cities and the County participate, School and other special districts do not). The formula is based, in part, on the property tax efforts of each jurisdiction. Because the portion of the overlapping levy attributable to the City of Salina was increased for 2011, the City's allocated portion of the County-wide sales tax was decreased from 63.3% in 201061.85% In 2011. Total Countywide taxes received in 2011 were approximately $6,755,629. The change In formula thus resulted In a shin of aDout $158,000 from the City of Salina to Saline County In 201 i. On November 4, 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2018. The tax was also modestly re-purposed, for Capital and Economic Development purposes only. Property Taxes are the third major component of the revenue mix, accounting for 16% ($11,711,254) of total revenues Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property, and motor vehicle taxes. which are established by a countywide average tax rate, and the assessed value of the vehicle. Real estate assessed value Increased by 2.4% The total City mill levy was Increased slightly, by .2%, while the overlapping levy Increased by .3% Tax delinquency decreased from 5.6% to 2.7%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base Personal property value has now dropped to $19.9 million from it's peak of $39.7 million in 2007. At the 2011 tax rate, this exemption IS eqUivalent to $514,546 in lost revenue for 2011. Motor Vehicle value decreased by 5.8%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution) The follOWing table summanzes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year Comparative Property Values and Tax Levy Rates 2010 2011 Real Estate and Personal Property Assessed Valuation City Mill Levy ($ per $1,000) $ 397 470.626 $ 402.354.576 Operating (General Fund) Debt Service Total City Rate Total Overlapping Levy Percent of Total Taxes Collected Ratio of Total Taxes (Including delinquent collections) to taxes Motor Vehicle Valuation $ 20.082 5.773 25.855 124.707 94.4% 971% 50,330,252 19.236 6786 26.022 128.498 97.3% 99.9% $ 47,406,072 Change $ 4.883.950 [0.846] 1.013 0.167 3.791 2.9% 2.8% $ [2,924,180J The unemployment rate In Saline County declined very slightly from 6.4% in 2010 to 6.3% In 2011, reflecting general economic conditions. This is still slightly below the statewide and Significantly below the national unemployment rate. The total labor force increased to 26,656. a Change of 1.5%. In 2011, the top ten property taxpayers accounted for 11.22% of total assessed value. This is slightly more concentrated than ten years ago (at 11.18%) 6 Statement of Net Assets CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Net assets may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets exceeded liabilities by $187,641,000 at December 31,2011. This represents an increase in net assets of $6.519.000 over 2010. A comparative condensed Statement of Net Assets at December 31,2010 and 2011: Governmental Business-Type Activities Activities Total Prima~ Government % of % of 2011 2010 2011 2010 2011 2010 Total 2011 Total Change Cash and Investments $ 13,935 $ 17,475 $17,530 $28,047 $ 31,465 12% $ 45,522 16% $ 14,057 Other Current Assets $ 12,309 $ 12,670 $ 2,025 $ 2,344 $ 14,334 5% $ 15,014 5% $ 680 Noncurrent (Capital) Asset $166,122 $164,515 $ 58.273 $ 67.639 $224,395 83% $232,154 79% $ 7,759 Total Assets $192,366 $194,660 $ 77,828 $98,030 $270,194 ~ $292,690 ~ $ 22,496 Current Liabilities $ 21,918 $ 21,687 $ 3,352 $ 2,944 $ 25,270 29% $ 24,631 23% $ (639) Noncurrent Liabilities $ 52,650 $ 55,639 $10.538 $24772 $ 63,188 71% $ 80,411 77% $ 17.223 Total Liabilities $ 74,568 $ 77.326 $13,890 $27,716 $ 88,458 ~ $105.042 ~ $ 16,584 Net Assets' Invested In capital assets, net of related debt $113,001 $109,289 $48,079 $44.227 $161,080 89% $153,516 82% $ (7,564) Restricted for Permanent Funds $ 417 $ 427 $ $ $ 417 0% $ 427 0% $ 10 Restncted for Debt SerVICE $ 572 $ 1.285 $ 1.553 $ 1,553 $ 2,125 10/'0 $ 2,838 2% $ 713 Unrestricted $ 3,808 $ 6,333 $14.306 $24,534 $ 18,114 10% $ 30,867 16% $ 12,753 Total Net Assets $117,798 $117.334 $63,938 $70,314 $181.736 ~ $187,648 ~ $ 5.912 Percent of Total Assets 65% 63% 35% 37% 100% 100% Cash and Investments as a percentage of current liabilities 64% 81% 523% 953% 125% 185% The largest segment of the City's net assets (82%) reflects its Investment in capital assets (land. buildings, streets and drainage facilities. utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that IS still outstanding These assets are used to provide services to citizens As a result, resources required to retire related debt can not come from liquidation of the asset. Such resources generally must be provided from other sources. such as future taxes or user charges A small portion of net assets (2%) is restricted for debt service. The remainder (unrestncted) of net assets (16%) may be used to meet the City's obligations to citizens and creditors This IS comparable to previous years. In 2011, the amount Invested in capital assets net of related debt decreased by $7,564.000 Unrestricted net assets Increased by $12,573,000. These represent diverse changes throughout the financial statement: Increases in cash In both Governmental and Business type activities, a decrease in Capital assets in Governmental Activities and an increase in Capital Assets in Business type activities Total liabilities remained much the same in Governmental Activities, but increased significantly In Business Type Activities, attributable to the issuance of Revenue Bonds to finance the Advanced Meter Infrastructure project. During the year ended December 31, 2011, there were several significant events that changed the balance of net assets. Governmental Activities. 2011 saw an increase in cash and investments in Governmental funds. This is due to controlled expenditures for both capital and operating requirements as well as improved revenues from the Sales Tax. 7 CITY OF SALINA, KANSAS Year Ended December 31, 2011 (Unaudited) Business-type Activities: The Water and Wastewater fund has a dominant influence on the Business Type Activities net assets. The increase in net assets is due to good revenue production and controlled expenses. Statement of Activities A condensed statement of activities is shown below. Condensed Comparitlve Statement of Activities, 2010 and 2011 (In $OOO's) Program Revenues Charges for Services Operating Grants and Contnbutlons Capital Grants and Contributions General Revenues. Property Taxes Sales Taxes Other Taxes Investment Revenue Other Miscellaneous Total Revenues Expenses General Government Public Safety Public Works Public Health and Sanitation Culture and Recreation Planning and Development Solid Waste Disposal Water and Sewer Sanitation Golf Course Interest on Long Term Debt Total Expenses increase In net assets before transfers Transfers and other extraordinary Items Increase In Ne\ Assets l\let Assets. January 1 Prior Period Adjustment Net Assets. January 1 restated r\jet Assets December 31 Governmental 2010 2011 $ 12.306 $ 13470 $ 3.415 $ 2,907 $ 11.179 $ 11,712 $ 15.225 $ 15,848 $ 6,298 $ 6.389 $ 81 $ 77 $ 565 $ 872 5: 49.069 $ 51.275 $ 10.845 5) 13.615 5) 18,592 $ 18.579 5: 9.782 $ 9.858 S 1 365 S 1.368 $ 6.572 S 6.693 S 3715 $ 3.450 S 2.257 $ 1.650 5: 53.128 $ 55.213 5) (4.059) S; (3.938, 5, 92 $ 2.362 £. (3.967 ) 5) (1.576; $119.854 $117.798 $ 1.911 S 1 ~ 12 $121.765 $118.910 $117.790 S, 117.334 Business-Type 2010 2011 $22419 $23.779 $ 202 $ 3.804 $ 67 $ 83 ~ $ 330 $22.827 $28.198 $ 2.925 $ 2.945 $ 14.050 $13.597 $ 2,261 $ 2.261 5, 817 $ 825 $ 20.05.') $19628 $ 2774 $ 8,570 $ (92) $ (2.163) $ 2.682 $ 6407 $61.270 $63938 ~:'LJl1) $61.256 $63.907 S,63,938 ~ Total Primary Government 2010 % 2011 % 2010·2011 $ 34725 $ 3.415 $ $ 11.179 $ 15.225 $ 6,298 5) 148 S 906 48% $ 37.249 5% $ 3.109 0% $ 3,804 16% $ 21% $ 9% $ 0% $ 1% $ 11.712 15.848 6.389 160 1.202 5) 71 896 100%, $ 79.473 $ 10.845 $ 18.592 S; 9782 SO 1365 S; 6.572 S; 3.715 $ 2.925 S; 14.050 S; 2.261 S; 817 S; 2.257 S; 73181 S; (1.285) $ $ (1.285) $181124 $ 1.897 $183021 $181.736 $ 15% $ 13.615 25% $ 18.579 13% $ 9.858 2% $ 1.368 9% 5; 6693 5% $ 3450 4% $ 2,945 19% 5; 13.597 3% $ 2.261 1% $ 825 3% $ 1.650 100% $ 74.841 $ 4.632 5: 199 $ 4.83-1 $181.736 $ 1.081 $182.817 $187.648 Change 47% $ 2.524 4% $ (306) 5% $ 3.804 15% $ 533 20% $ 623 8% $ 91 0% S 12 2% $ 296 100% $ 7.577 18°/e $ 25% $ 13% $ 2% $ 9% S 5% $ 4% $ 18% $ 3% S 2,770 (13) 76 3 121 (265) 20 (453) 1% $ 8 2 % .:.,$ _--'--O6(-,,0~7) 100% ;;;.£~~1,;;;.6;,;;6.;;.O $ $ 5.917 199 6.115 612 (816) (204) 5912 Governmental Activities Total expenses for Governmental Activities for the year ending December 31, 2011 were $55,213,000 compared to $53.128.000 in 2010. Governmental activities represent 74% of the City's total expenses The largest element of Governmental Activity expense was PubliC Safety. accounting for 34% of the total. Charges for service attributable to Governmental ActiVities totaled $13,470,000 and operating grants for those purposes were $2,907,000. The balance was funded by general revenues. Sales taxes accounted for $'15,848,000 of the general revenues. with property taxes providing $11.712,000. Net assets decreased by $1.576,000 as a result of Governmental Activities Business Tvpe Activities Total expenses for Business-type Activities for the year were $19,628,000. or 26% of the City's total expense. The majority of this expense ($13.597,000) is attributable to Water and Sewer operations, with the other activities (Solid Waste Disposal. Sanitation, and Golf Course) costing a combined total of $6,031,000. These activities are primarily supported by user charges, with only $413,000 coming from general revenues, representing largely the Interest earned on fund balances held by the City. Net assets Increased by $6,407,000 as a result of BUSiness-type Activity operations. Fund Financial Analysis Governmental Funds Fund Balances: CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The table below shows the Governmental Fund balances for major funds for the years ended December 31, 2010 and December 31,2011. Governmental Fund Balances, 2010 and 2011 Fund 2010 2011 Change General $ 3.617.181 $ 3.836.238 $ 219.057 Flood and Drainage $ 188,526 $ 907 $ (187,619) Tounsm and Convention $ 367,197 $ 340,473 $ (26,724) Special Gas $ 1,484,641 $ 1,417,743 $ (66,898) Bicentennial Center $ 46,048 $ 142,881 $ 96,833 Sales Tax Capital $ 2,154,367 $ 1,397,571 $ (756,796) Debt Service $ 571.873 $ 1,285,130 $ 713,257 Capital Projects $ (2.610,001 ) $ 390,852 $ 3,000.853 Other Governmental Funds $ 2,981,652 $ 2.792.546 $ (189,106) Total $ 8,801,484 $ 11.604,341 $ 2,802.857 Total Governmental Fund balances Increased by $2,802,857. The reasons for these changes are varied. The most Significant change is in the Capital Projects Fund, and is largely the result of Project financing activities. General Fund balances stabilized and grew slightly In 2011. The Flood and Drainage Fund was scheduled for depletion in 2011. The Special Sales Tax Capital Outlay Fund shows a significant reduction In fund balance due to an aggressive capital Improvements program, most notably the reconstruction of Marymount Road Revenues and Expenditures. The follOWing table shows a comparison of revenues and expenditures (Including other sources and uses) for major funds for the years ending December 31.2010 and 2011 Consolidated Statement of Revenues and Expenditures for Major Funds 2010 and 2011 Modified Accrual Basl~ Fund 2010 201~ Change Revenues (Incluolng Other FinanCing Sources) General $ 34,303574 $ 35.557,304 $ 1.253,730 Flood and Drainage Improvement $ 1,312 5) 18473 $ 17,161 T ounsm and Convention 5) 1,332.671 $ 1306,102 $ (26.569) Special Gas $ 1.569.648 $ 1.546,045 $ (23.603) Bicentennial Center ~ 1 702066 5) 1.656.762 $ 145.304) Saies Tax Capita: $ 3.815966 "" 3,777.286 $ (38680) Debt ServIcE, $ 7943.865 S' 6,844.52 1 :i l1.O99344} Capital Projects $ 5.55290E, S, 9896.198 $ 4.343.292 Other Governmenta! FundE' $ 2,954.257 2.800.508 $ (153,749) T olal Revenues $ 59.176.265 S, 63.403,199 $ 4.226.934 Less Other S:Jurces S 12157.281: ~ 14.581.655 S, 2.424.371 Revenues net of other source" :r: 47.018981 S 48.82, 54,j $ 1.802.562 Expenditures (Inciudlng Other Flnancmg Uses; General $ 35.773774 S> 35494671 $ (279.103) Flood and Drainage Improvement ~ 3.223 ~. 206,092 $ 202.869 TOUrism and Convention $ 1.228.789 s: 1 332826 $ 104.037 SpeCial Gas 5, 2.138.057 $ 1.612.943 $ (525,114) Bicentennial Center $ 1.768246 $ 1,559.929 $ (208317) Sales T ax Capital !B 3,289009 ct 4.534,082 5, 1.245,073 '" Debt Service $ 8,107.283 $ 6.131.264 $ (1.976,019) Capital Projects $ 15,936.269 $ 6.895,345 $ (9.040.924) Other Governmental Funds' $ 2.829.609 $ 2.989.614 $ 160,005 Total Expenditures $ 71,074,259 5, 60,756,766 $ (10,317,493) Less Other Uses $ 4.983.834 $ 5.692.077 $ 708.243 Expenditures, net ot other uses $ 66.090.425 $ 55,064.689 $ (11.025.736) 9 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Total revenues and other sources increased by $4,226,934 from 2010 to 2011. The largest component of this change was in the Capital Projects accounts, and is related to Construction activities. Other changes include an increased General supplement for the Bi-Centennial Center and changes in temporary note activity. Expenditures generally declined, with the notable exception of the Sales Tax Capital Fund, which was committed to the Marymount Road reconstruction, along with some smaller projects. Proprietary Funds The City of Salina operates four Enterprise Funds as well as five Internal Service Funds A summarized comparative Statement of Net Assets follows for each Enterprise Fund. Comparative Summary Statement of Net Assets; 2010 -2011 (in $OOO's) Solid Waste Disposal Water and Sewer 2010 2011 Change 2010 2011 Change Current Assets $ 3,887 $ 3.611 $ (276) $ 14,755 $ 25,988 $ 11,233 Capital Assets $ 4.211 $ 3.495 $ (716) $ 53,075 $ 63,184 $ 10,109 Total Assets $ 8,098 $ 7,106 $ (992) $ 67,830 $ 89.172 $ 21,342 Current liabilities $ 1.010 $ 528 $ (482) $ 2,091 $ 2.363 $ 272 Noncurrent Liabilities $ 3,192 $ 2,868 $ (324) $ 7,161 $ 21,640 $ 14,479 Total liabilities $ 4,202 Si 3.396 $ (806) $ 9,252 $ 24.003 $ 14,751 Assets Invested In Capital. net of related debt $ 2,294 $ 2.276 $ (18) $ 45.567 $ 40.991 $ (4.576) Restncted Net Assets $ $ $ $ 1.553 $ 1.553 $ Unrestricted Net Assets $ 1.602 $ 1.434 $ (168) $ 11.458 $ 22,625 $ 11 167 Total Net Assets $ 3.896 $ 3.710 $ (186) $ 58,578 $ 65,169 $ 6.591 Current Assets as a percentage of current liabilities 385% 684% 706% 1100% Sanitation Golf Course 2010 2011 Change 2010 2011 Change Current Assets $ 846 $ 761 $ (85) $ 66 $ 32 $ (34 ) Capital Assets $ 639 $ 646 ~. 7 $ 348 3:, 314 3:, (34) Total Assets $ 1 485 $ -: ,407 Si 178; $ 414 <:: 346 $ (68) " Current Liabilities $ 203 $ 29 ~. '" (174) $ 48 $ 24 $ (24) Noncurrent Liabilities $ 123 $ 156 Si 33 $ 61 $ 109 $ 48 Total Liabilities $ 326 $ 185 ~ (141 ) $ 109 $ 133 53 24 Assets Invested In Capital, net of related debt 5: O~':vlvQ $ 646 $ "I7 $ 348 $ 314 .Cp" (34) Restricted Net Assets $ $ $ $ $ $ Unrestricted Net Assets $ 520 $ 576 $ rv:.Ve:: $ (43) $ \101 ) .<v:: (58) Total Net Assets $ 1,159 $ 1.222 $ 63 $ 305 $ 213 $ (92) Current Assets as a percentage of current liabilities 417% 2624% 138% 133% JO CITY OF SALINA, KANSAS Year Ended December 31, 2011 (Unaudited) The Golf Course Fund shows declines in total net assets, due primarily to a reduction in current assets, however, capital assets also decline. Unrestricted net assets in this fund reflect a $101,000 deficit balance, up from $43,000 a year ago. The Solid Waste fund shows decreases in assets as well as liabilities, the result of constructing an additional cell. The Water and Sewer fund shows a significant increase in long term liabilities as a result of a Revenue Bond Issue. Both Current and Capital assets increase significantly within this fund. Revenues, Expenses, and Changes in Net Assets The Water and Wastewater Funds, showed healthy results from operations, with net assets increasing significantly due to a good revenue flow (attributable to both adequate rates and favorable weather conditions) and controlled expenses The Golf Course showed a very significant loss on the year, requiring increased transfers from the General Fund to maintain cash liquidity. The Sanitation Fund is stable. Net assets declined slightly in the Solid Waste fund. ' Comparative Summary of Revenues, Expenses and Changes in Net Assets, 2010 and 2011 Operating Revenues Operating Expenses Operating Income (In $OOO's) Solid Waste Disposal 2010 2011 Change $ 2,878 $ 2,929 $ 51 $ 2,852 $ 2,829 $ (23) $ 26 $ 100 $ 74 Water and Sewer 2010 $ 16,789 $ 13,571 $ 3,218 2011 Change $ 18,361 $ 1,572 $ 12,964 $ (607) $ 5,397 $ 2,179 Non-operating revenues (expenses) .:::.$_....!(~5~5) $ (107) ..::..$_-,("",5=2) $ (433) $ (561) $ (128) Income (Loss) before Transfers Transfers in (out) Capital Contributions Change in Net Assets Net Assets. January 1 Restatement Net Assets, January 1, restated Net Assets, Decem ber 31 Operating Revenues Operating Expenses Operating Income $ $ $ $ (29) $ (139) $ $ (168) $ (7) $ 22 $ 2.785 (180) $ (41) $ 77 $ ..:..$_-(187) ~$===.;(1~9) $ 2,862 $ 4,836 $ 2.051 $ (2.030) $ (2,107) $ 3,804 $ 3.804 $ 6,610 $ 3,748 $ 4,121 $ 3,896 $ (225) $ 55,668 $ 58,578 $ 2.910 $ (57) $ 1 ..::..$_---=5=8 $ 48 $ (19) $ (67) $ 4,064 $ 3,897 $ (167) $ 55,716 $ 58,559 $ 2,843 $ 3,896 $ 3,710 $ (186) $ 58,578 $ 65,169 $ 6,591 2010 $ 2.311 $ 2.276 $ 35 Sanitation 2011 $ 2,335 $ 2,292 $ 43 Change $ 24 5: 16 $ 8 Golf Course 2010 2011 Change $ 783 $ 687 $ (96) $ 817 $ 825 $ 8 $ (34) $ (138) $ (104) Non-operating revenues (expenses) .::.$_--.:1...::.8 .::.$_--=3.=,2 .::.$_--.:1-,-4 .::.$ _ _ $ $ Income (Loss) before Transfers Transfers in (out) Capital Contributions Change In Net Assets Net Assets, January 1 Restatement Net Assets, January 1, restated Net Assets, December 31 $ 53 $ 75 $ 22 $ (34) $ (138) $ $ (50) $ $ 50 $ 20 $ 47 $ (104) 27 $ $ $ ..:..$_-$ ~$----,;",$ =~3 ,;",$ =...;7.,;;.5 ,;",$ =...;7.;;;,2 $ (14).;;.$ =...,,;(9;,.;,,1) $ (77) $ 1,166 $ 1,159 $ (7) $ 314 $ 305 $ (9) $ (10) $ (12).::..$ ---=(=2) ..::..$_---=.5 .::..$ _-,-,-1I) .::.$ _( =6) $ 1,156 $ 1,147 $ (9) $ 319 $ 304 $ (15) $ 1,159 $ 1.222 $ 63 $ 305 $ 213 $ (92) 11 Budgetary Highlights CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) The objective of budgetary controls is to ensure compliance with legal prOVIsions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2011. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Reallocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department withm each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. There were a number of funds in which the budgets were amended, including the Flood and Drainage Improvement Fund, Sales Tax Capital Fund. Risk Management Fund, Central Garage Fund and the Water and Sewer Fund. The City experienced a number of Significant vanances from budgeted items in the General Fund, however, the total fund was within budgeted expenses. Motor vehicle taxes fell short of budget due to a delayed distribution from the County. Public Safety charges for service were significantly short of budget. This includes Court Revenues and EMS fees due from Saline County Sales taxes exceeded budgetary levels slightly. Several expenditure items were also significantly over or under budget Several Departments exceeded budgeted expenditures. In general, retirement system contributions exceeded budget Capital Assets and Debt Administration Capital Assets The total amount mvested in Capital Assets for the City at December 31. 2011 was $232,153,260 net of accumulated depreciation The following table illustrates the Capital Asset balance by various classes of assets at December 31. 2010 and 2011' Capital Asset Balances Net of Depreciation 12/31/2010 and 12/31/2011 (In OOO'S) Governmentai ActiVity Business-type Activity Tota! 2010 2011 2010 2011 2010 2011 Equipment, Furniture and Fixtures $ 1,314 $ 1,288 $ 1,982 $ 1,729 $ 3,296 $ 3,017 Vehicles $ 2.445 $ 2.996 $ 903 $ 812 $ 3,348 $ 3.808 Buildings and improvements $ 23.625 $ 22,591 $ ~2,345 $ 1 ~ .904 $ 35,970 5) 34.485 Land $ 22477 $ 22,477 $ 1.541 $ 1,541 $ 24,018 $ 24.018 Infrastructure $ 83,712 $ 82,609 $ 39,985 $ 40.591 $ 123,697 $ 123,200 Construction in Progress $ 32,549 $ 32.554 $ 1,517 $ 11.062 $ 34.066 $ 43,616 Total $ 166.122 $ 164.515 $ 58.273 $ 67.639 $ 224.395 $ 232,154 * Net of Accum ulated Depreciation 12 CITY OF SALINA, KANSAS Year Ended December 31,2011 (Unaudited) Changes to capital assets may be summarized as follows: Changes to Capital Assets, 2011 (in OOO's) Governmental Business-Type Activity Activity Additions $ 547 $ 10,633 Retirements $ (3,110) $ (1,236) Adjustments $ 956 $ (31 ) Net Additions $ (1,607) $ 9,366 Total $ 11,180 $ (4,346) $ 925 $ 7,759 Depreciation Expense Applied $ 4,730 £, 2,653 ,;;,,$==..;7,.;,;.3;;.;;8~3 Additional Information on the City's capital assets can be found in Note 4,0. of the notes to the basIc financial statements. Debt Management The City's general policy for General Obligation Bonds is to Issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the matunty may extend to 15 years The outstanding General Obligation Bonds for Governmental activities at December 31. 2011 totaled $55.225.670. In addition, there were temporary notes outstanding In the amount of $3400.000 BUSiness-type activities had $16.193,925 In Revenue Bonds outstanding. as well as $7,217.907 In General Obligation Bonds. Revenues generated by user fees are pledged to retire all of the Bonds issued by BUSiness-type activities The City engaged In several debt transactions dunng 2011. On August 1 st, the City issued $6.565,000 in Internal Improvement bonds. The bulk of the proceeds ($3.765,836) were used to finance an Industnal fire protection system located at the Salina Airport Industrial Center The balance of the proceeds were used to finance several residential subdivisions. Also' on August 1 s:, the City Issued $3400 000 In temporary notes to finance public facilities to serve 8 commercia! subdivision development. These note will be refinanced Into a long term bone issue In August. 2012. Additional information on the City s debt can be found In [\lote 4. E of the notes to the baSIC financial statements Requests for Information ThiS financial report is intended to give the reader a general overview of the City's finances Questions about information In this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street. Salina, Kansas, 67401. . BASIC FINANCIAL STATEMENTS ASSETS Current assets: Cash and Investments CITY OF SALINA, KANSAS STATEMENT OF NET ASSETS December 31. 2011 Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Deferred charges Total current assets Noncurrent assets. Capital assets, nondepreciable Construction In progiess Land Capital assets, depreciable Less Accumulated depreciation Total noncurrent assets Total assets liabilities Current liabilities. Accounts payable Retalnage payable Accrued liabilities Matured bond principal and interest Accrued Interest payable Deposits payable Unearned revenue Current portion of compensated absences Current portion of temporary notes payable Current portion of revenue bonds payable Current portion of general obligation bonds payable Total current liabilities Noncurrent liabilities, Accrued liabilities Compensated absences Net OPES obligation Revenue bonds payable General obligation bOr)os payable Landfill post-closure care ilabilitles Total noncurrent liabilities Total liabilities Net Assets Invested In capital assets, net of related debt Restricted for. Permanent funds: Expendable Debt service Unrestricted Total net assets Total Total Governmental Business-type Activities Activities $ 17,475,299 $ 28,047,281 1,122,221 1,396.659 10,848,090 35,877 16 205,410 571,702 458.315 375.179 30,145.212 30.390,837 32,554,357 11.062,055 22,477.191 1,541,002 196,166,753 101,308,419 86,683.788 46.272,729 164.514.513 67.638747 $ 194,659.725 $ 98.029,584 $ 788.731 $ 294.449 468.309 608.219 563.720 5.145 512.680 211.291 163,904 10,315,524 581.694 122,301 3.400,000 343.696 5.051.038 1.200.048 21.686841 2.943,908 149.245 2,507.440 527,190 2807.425 334.458 15850.229 50,174.632 6.017.859 2.042.254 55.638,742 24.771.990 $ 77.325.583 $ 27.715.898 $ 109.288,843 $ 44,226,915 426,741 1,285.130 1.553,016 6.333.428 24,533.755 $117.334,142 $ 70,313.686 The notes to the baSIC financial statements are an integral part of this statement. 14 Total Primary Government $ 45,522,580 2.518.880 10,848,090 35,893 777,112 833.494 60.536.049 43.616.412 24,018,193 297,475,172 132.956.517 232.153.260 $ 292,689,309 $ 1.083.180 1.076.528 563720 5 145 723.971 163,904 10.31552<1 703,995 3.400.000 343,696 6,251.086 24.630.749 149.245 3.034,630 3.141 883 15.850.229 56.192491 2.042,254 80410,732 $ 105.041.481 $ 153,515758 426.741 2,838,146 30,867,183 $ 187.647.828 Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planmng and development Interest on long-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Samtalion Golf Course Total Duslness-type activities Total pnmary government CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31,2011 Program Revenues Expenses $ 13,614.508 18.579,041 9,858.199 1,367,825 6,693,341 3,450,078 1.650.426 55,213.418 2.944,765 13.596,918 2,261,462 825.057 19.628202 Charges for $ Services 6,106,067 3,766.156 261 707 42,729 3,140.025 153.675 13470,359 2,904.371 17,904,056 2,334,119 636.202 23.778,748 Operating Capital Grants and Grants and Contributions Contnbutlons $ 359,148 $ 631,417 1,368,577 153,566 177,048 217,643 2.907.399 201,700 3.803,565 201,700 3.803,565 $74.841.620 $37.249107 $3109099 $ 3.803565 General Revenues: Property taxes leVied for General purposes Debt service Motor vehicle tax General purposes Sales tax General purposes Selective purposes Other taxes General purposes Investment revenues Miscellaneous Transfers net Subtotal general revenues Change In net assets Net assets -oegmnlng Pnor penod adjustment Nel assets -beginning, restated Net assets -ending Net [Expenses} Revenue and Changes In Net Assets Total Total Total Governmental BUSiness-type Primary Activities ActiVities Government $ [7 149,293] $ $ [7,149.293} [14,181,468} [14,181,468} [8,227,915} [8,227,915] [1,171,530] [1,171.530} [3,376,268] [3,376,268} [3,078.760} [3,078,760] [1 650,426] [1.650,426} [38 835.660J [38,835.660) [40,394} [40,394} 8,312,403 8,312,403 72,657 72.657 [188,855) [188.855) 8155.811 8155811 [38.835.660) 8.155,811 [30,679.849) 7782768 7782768 277884E 2,778,845 1149641 1,149,641 11 767,400 11,767400 4,080,342 4.080,342 6.389,878 6,389,878 77.095 83.399 160,494 871.904 330.351 1.202.255 2.361 593 [2162772j 198.82', 37.259466 [1.749.022) 35.510444 [1576.19';'1 6406.789 4.830.595 117.79791' 63937.619 181.735530 1.112.425 [30.722) 1.081.702 118.910.336 63.906.897 182.817.233 $117,334142 $ 70313,686 $ 187.647.828 The notes to the baSIC financial statem.ents are an Integral part of this statement 15 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2011 Flood & Tourism Drainage and Special General Improvement Convention Gas ASSETS Cash and investments $ 3,153,960 $ 907 $ 2,202 $ 1,195,840 Receivables (net) Accounts 677,815 338,271 Taxes 8.094.093 312,648 Interest 35,877 Inventory 89,716 Due from other funds 9,375 Cash with fiscal agent Total assets $ 12,060,836 $ 907 $ 340,473 $ 1.508.488 LIABILITIES AND FUND BALANCE Liabilities Accounts payable $ 301.319 $ -$ -$ 46.356 Retalnage payable 44,389 Deferred revenue 7.923.279 Due to other funds Matured pnncipal and interest Temporary notes payable Total liabilities 8.224.598 90745 Fund balance I\lonspendable 89716 Restricted 340.473 i ,094.720 Committed ASSigned 292.816 907 323,023 Unassigned 3.453.706 Total fund baiances 3.836.238 907 340,473 1.417.743 Total ilabilities and fund balance S 12.060.836 $ 907 $ 340.473 $ 1,508,488 Bicentennial Center $ i 17,993 54.966 $ 172,959 $ 30.078 30.078 142,881 142.881 S 172,959 Other Total Sales Tax Debt Capital Governmental Governmental Capital Service Projects Funds Funds $ 1,397.571 $ 1,236,026 $ 4,503,053 $ 2,773,395 $ 14,380,947 51,169 1,122,221 2,441,349 10.848,090 35.877 89,716 9,375 5.145 5,145 $ 1.397.571 $ 3.682,520 $ 4.503.053 $ 2.824,564 $ 26.491.371 $ -$ -$ 288.281 $ 22,643 $ 688,677 423.920 468.309 2.392,245 10.315.524 9,375 9,375 5.145 5,145 3.400.000 3.400,000 2.397.390 4.112.201 32018 14,887.030 89,716 1,285.130 891.254 3.611,577 610.134 [2,477,564] 1,851.292 126,743 787,437 2.868,416 50000 4.322.599 3.453.706 1.397.571 1.285,130 390,852 2,792.546 11.604.341 $ '\ .397.57: $ 3.682,520 $ 4.503,053 $ 2,824.564 $ 26.491.371 The notes to the basic financial statements are an integral part of this statement. 16 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET ASSETS OF GOVERNMENTAL ACTIVITIES December 31,2011 Total Governmental Fund Balances Amounts reported for governmental activities In the statement of net assets are different because Bond issuance costs are shown as current year expenditures In the funds. Bond issuance costs Capital assets used In governmentai activities are not financial resources and therefore are not reported in the funds The cost of capital assets IS Accumulated depreciation IS An internal service fund is used by the City's management to charge the costs of the worker's compensation program The assets and liabilities of the internal service fund are Included with governmental activities The following liabilities. including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of' Compensated absences Net OPEB obligation Bonds payable Accrued Interest on the bonds Net Assets of Governmental ActivIties 250,331,663 85,844,940 2,996.810 2.807.425 55.225.670 512,680 The notes to the basic financial statements are an integral part of this statement. 17 $ 11,604,341 458,315 164.486,723 2,327,348 [61,542.585J $117,334.142 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31,2011 Flood & Tourism Drainage and Special General ImQrovement Convention Gas REVENUES. Taxes Real estate taxes $ 7,564,508 $ $ $ Delinquent taxes 212,244 6,016 Motor vehicle taxes 894,671 General sales taxes 11,767,400 Selective sales taxes Other taxes 5,083,919 1,305,959 Intergovernmental 813,185 1.362,327 Special assessments Licenses and permits Charges for services 7,822,307 Investment revenue 28,972 143 3,718 Reimbursements Miscellaneous 501.260 11,550 Total revenues 34,688,466 17,566 1,306,102 1.366,045 EXPENDITURES. Current General government 3,461,488 PubliC safety 18,117,827 Public works 6,132,020 9,784 427,429 PubliC health and sanitation ; ,176.082 Culture and recreatlOI" 2,734,957 Planning and development 2.319.300 736.386 Miscellaneous Capital outlay 555,048 196,308 1,183.678 Debt service Pnncipal retirement Interest and other charges Tota! expenditures 34496.722 206.092 736,386 1.611.107 Excess [defiCiency] of revenue and other source" over [under] expenditures and other [uses] 191 744 1188.526J 569,716 [2.<15,0621 OTHER FINANCING SOURCES [USES] Issuance of bonds Bond premium 1 ransfers In 868838 907 180.000 Transfers [out] [997,949J [596.440J [1.836) Total other finanCing sources [usesJ r129.111 ] 907 r596,440J 178 164 Net Change in fund balance 62,633 1187,619) [26,724) f66.898] Fund balance -Beginning of year 36'17,181 188,526 367,197 1,484,641 Restatement of prtor year fund balance 156.424 FUND BALANCE -Beginning of year. as restated 3,773,605 188,526 367,197 1,484,641 Fund balance -End of year $ 3,836,238 $ 907 $ 340.473 $ 1,417743 Other Total Bicentennial Sales Tax Debt Capital Governmental Governmental Center Capital Service Prolects Funds Funds $ -$ -$ 2,723,262 $ -$ -$ 10,287,770 55,583 273,843 254,970 1,149,641 11,767,400 3.763.045 317,297 4,080,342 6,389,878 725,637 2,901,149 1,535,487 1,535,487 6,250 6,250 783,028 1,125,022 9,730,357 193 5,683 13,686 9,634 6,620 68,649 32,000 32,000 692 12.983 72,293 598,778 783913 3.768,728 4.595,971 41.634 2,253.119 48,821,544 3,461,488 18,117,827 6,569,233 153,730 1,329,812 1,548,901 1,616,170 5,900.028 288,275 3,343,961 35 35 11.028 1.032,526 6.338,74'1 529,401 9,846,730 4,276.195 135,000 4,411,195 1.771.581 151,055 161,744 2,084.380 1 559.929 1,032526 6.047776 6489.796 2,884.355 55,064;689 [776.016J 2.736,202 [1 45'1.8051 [6,448,162] [631,236J [6.243,145J 6,565,000 6,565,000 22,985 22.985 872849 8,558 2,225.565 3.289.564 547,389 7,993670 13,501,556) [83.488) [405,549) [105.259) [5.692,077) 872,849 r3.492.998J 2.165,062 9.449,015 442130 8,889,578 96.833 [756,796] 713,257 3,000,853 f189,106] 2,646.433 46,048 2,154367 571.873 [2,610,001J 2,981,652 8,801,484 156,424 46,048 2,154,367 571,873 [2.610,OO1i 2,981,652 8,957,908 $ 142.881 $ 1,397,571 $ 1,285,130 $ 390,852 $ 2,792,546 $ 11,604,341 The notes to the baSIC financial statements are an Integral part of thiS statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31,2011 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net assets and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain on sale of assets Proceeds from sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported In the governmental funds because Interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, Interest expense is recognized as the interest accrues. regardless of when it IS due. This is the amount by which interest decreased. An internal service fund IS used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits. do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Bond and temporary note proceeds are other finanCing sources in the governmental funas, but they increase long-term liabilities In the statement of net assets and do not affect the statement of activities. Also, governmental funds report the effect of Issuance costs, premiums, discounts, and similar items when debt is first issued. whereas these amounts are deferred and amortized in the statement of activities. ThiS amount IS the net effect of these differences In the treatment of long-term debt and related items. Repayment of bond principal and bond issuance costs IS an expenditure in the governmental funds. but it reduces long-term liabilities In the statement of net assets and does not affect the statement of activities. Changes In Net Assets of Governmenta! Activities [77,143] [10,070j 2,254,765 [4,725,361] The notes to the basic financial statements are an integra! part of this statement. 19 $ 2,646,433 [2,557,809] 314.150 584.822 [523,988] [6.570.801J 4.530,999 5) [1,576,194] CITY OF SALINA, KANSAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2011 Business-Type ActiVities Emerprlse Funds Solid Waste Water and ASSETS Disposal Sewer Sanitation Golf Course Current assets -Cash and Investments $ 3 379.526 $ 24 042.117 $ 621.683 $ 3,955 Receivables (net of allowance for uncollectlbles) Accounts 231,123 1,026,364 139172 Interest 16 Inventory and prepaid supplies 544,052 27,650 Deferred charges 375179 Total current assets 3,610,665 25.987712 760855 31.605 Capital assets Nondepreciable capita! assets Construction In progress 1'1 062,055 Land 682.000 844,002 15,000 Depreciable capital assets Capital assets 8.278.501 90.480,372 1.557447 992.099 Less accumulated depreCiation 5465.856 39.202.619 911 1 ';7 693137 Total capital assets 3494,645 63183,810 646330 313.962 Total assets $ 7105,310 $ 89 171522 S; 1 407 185 $ 345.567 liabilities Current liabilities Accounts payable S 22192 262444 S; 6859 ~, 2954 Retalnage payable 608219 Interest payable 2,514 202777 Meter deposits payable 163,904 Current portion of compensated absences payaolE: 1 ~ ,2'15 68.382 22203 2050, Current portion of accrued claims payable Current portion of general Obligation bonds pavaole 486,302 713,746 Current portion of revenue bonds payable 34369(; Total current liabilities 528,223 2363168 29.062 23455 Noncurrent liabilities Compensated absences payablE 48 :3"0 294765 95709 88376 Accruec claims payable Net OPES Obligation 4394,4 209,&7:: 59830 2C 8~ L Payable from restrtctea asselc General obllgallon bones pavable 73:! 80t 5285 052 Revenue bonds payable 15 e50.228 Landfill post-closure care liabllllles 2,042.254 Tota! noncurrent Ilabllilles 2,867344 ~I ,EJS g": S ~ 55.53S 109 12~ 1 DIal ilabriluec, S:' 395 567 S, ;c4 (;0::' 08~ '" ',8J 60-" ~~ b4~ Net Assets Invested In capital assets, net of related oeb: S, 2275,537 $ 40,991.086 $ 646,330 $ 313,962 Restrlctec Restricted foe bond retiremenT ~,55301S Unrestricted " 434.20E 22624,333 576.254 [10'i 038; Totai net assets $3709743 $ 65 168 435 $ 1.222 584 $ 212.924 The notes to the baSIC finanCial statements are an Integral part of thiS statement 20 Total Internal Enterprise Service Funds Funds $ 28,047,281 $ 3,089.207 1.396,659 16 571,702 115.694 375,179 30.390837 3.204.901 11,062.055 1.541.002 101308419 866.638 46.272.729 838848 67638747 27790 $ 98.029,584 $ 3,232691 S, 294449 S; 100054 608219 21'.29~ 163.904 122.301 17384 563.72G 1.200042 343.696 2.943,908 681 158 527,190 74.94C' 14924: 334458 60',7 e5S 15850.229 2.042.254 24 77~: 99~ 224 ~ ec :!'2-;-7~S89C: '" 9:;S,3~::, S, 44.226915 $ 27790 ~ 553,01C 24.533,755 2,299558 $ 70,313 686 $ 2,327 348 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31,2011 Business-Type Activities. Enter~nse Funds Solid Waste Water and Diseosal Sewer Sanitation Golf Course Operating revenues Charges for services $ 2,904,371 $ 17,904,056 $ 2,334,119 $ 636,202 Federal grants 201,700 Miscellaneous 24,491 255,256 424 50180 Total operating revenues 2,928,862 18,361.012 2,334.543 686.382 Operating expenses General government Public works 2,088,843 11,205.114 2,170.663 Recreation 791.488 DepreCiation 740,047 1,758,777 120.799 33.569 Total operating expenses 2.828.890 12,963.891 2.291.462 825057 Operating Income [loss] 99,972 5.397.121 43.081 [138,675] Nonoperating revenues [expensesJ Investment revenue 9072 72.452 1.839 36 Debt service [115.875] [632,390] Galn/[lossJ on disposal of fixed assets 2550 30000 Accretion of bond premium 7.864 Amortization of bond Issuance costs 111.0511 Total nonoperating revenues [expenses) [106803) (560.575J 31.839 36 income [lossJ before transfers r6.831J 4.836.546 74.920 [138.6391 Transfers from [toJ other funds Transfers In 47,228 Transfers [out] [180.000) [2.030.000) Total transfers [180.000] [2 030.000J 47.222 Capital contnbutlons 3.803565 Change In net assets (186.8311 6610111 74.920 1914111 Net assets January 1 3895812 58578036 1 159149 304.622 Restatement 762 [19712] 1" 485J [287) Net assets. January 1 restated 3.896574 58558.324 1 147.664 304335 Net assets. December 31 $ 3.709743 $ 65.168.435 S; 1.222584 $ 212.924 The notes to the baSIC financial statements are an Integral part of thiS statement 21 Total Internal Enterprise Service Funds Funds $ 23,778,748 $ 9,881,156 201,700 330.351 251,196 24,310.799 10,132,352 9,611,278 15.464,620 791.488 2.653,192 4.698 18.909.300 9615976 5.401.499 516,376 83.399 8446 [748.265] 32550 1 129 7.864 [11.051) [635.503J 9.575 4765.996 525.951 47.228 60.000 [2.210.000] [2 162 7721 60.00G 3.803.565 6406789 585.951 63.9::P.6 ' t' 1737815 r30.722) 3,582 63906897 1.74,397 S; 70.313.686 S; 2.327.348 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31. 2011 Business-Type Activities' Enter~rlse Funds Solid Waste Water and Dls~osal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $ 2.948,382 $17.850.055 $ 2.332.281 $ 636.201 Cash paid to suppliers of goods or services [1.722.492J [7.552.182J [1.616.344J [391.100J Cash paid to employees [454426J [2.945.574J [696.074J [386,401J Other operating receipts 24491 456.956 424 50.180 Net cash provided by [used InJ operating actlvllies 795.955 7.809.255 20.287 [91.120) Cash flows from capital and related financing activities Purchase and construction of capital assets [23.446] [11.886.827J [139452] Capital contributions 3.803.565 Debt Issuance costs Incurred [315.426J Proceeds from sale of capital assets 2,550 30000 Principal payments -general obligation bonds [697,396J [69'1.410J Principal payments -revenue bonds [1,580.000J Proceeds from Issuance of revenue bonds 16.193.925 Interest paid [136.908) [496. 76Oi Net cash provided by [used InJ capital and related finanCing activities [857.750J 5.029.617 [109452J Cash flows from Investing actiVities Interest received 9,072 72.453 1 83S' 37 Cash flows from no~caPltal finanCing actiVities Transfers In 47.228 Transfers [out] r180.000) [2030.000) Net cash provided by [used In] noncaPltal finanCing actiVities [180,0001 [2030,000) 47.228 Net Increase [decrease 1 In caSh ana cash eqUivalents [232723; 10.881 325 [87326] [43.855] Cash and cash eqUivalents January 1 3612.249 13160792 709.009 47810 Cash and cash eqUivalents December 31 s: 3.379 526 S; 24.042 117 $ 621,683 So 3.955 The notes to the baSIC financial statements are an Integral part of thiS statement 22 Total Internal Enterprise Service Funds Funds 5; 23.766.919 $ 9,786.038 [11.282.118J [8.955,819J [4,482.475) [631.488J 532.051 251,196 8,534.377 449.927 [12.049.725J 3.803.565 [315.426J 32,550 1 ,~29 [1.388.806J [1.580.000J 16.193.925 [633.668) 4.062.415 1,129 83.401 8.445 47.228 60000 [2.210.000) [2,162.772i 60000 10517.421 519.501 17.529.860 2.569,706 5; 28.047.281 So 3,089.207 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31.2011 BUSiness-Type Activities' Enterprise Funds Total Internal Reconciliation of operating [loss] income to net cash provided by [used In] operating activities Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Service Funds Operating Income [loss] $ 99.972 $ 5,397,121 $ 43,081 $ [138,675] $ 5,401,499 $ 516,376 Adjustments to reconcile operating Income [loss] to net cash provided by [used In] operating activIties DepreCiation expense [Increase] decrease in accounts receivable [Increase] decrease In inventory Increase [decrease] In accounts payable Increase [decrease] In retalnage payable Increase [decrease] In accrued compensated absences Increase [decrease] in claims payable Increase [decrease] In landfill postclosure liabilities Increase [decrease] In net OBEB obligation Increase [decrease] In meter deposits payable Net cash proVided by [used In] operating activities $ 740,047 44,011 [218,286] [12,979] [342] 133,066 10,466 795.955 $ 1,758.777 120.799 33,569 [79,017J [1.838] 31.950 [9,113] 35,620 [120.339] [1,394] 591,610 [1,806] [35.666] 19,536 49984 14,250 4.957 25.016 7.809.255 $ 20.287 $ [91 120J The notes to the baSIC finanCial statements are an Integral part of this statement 23 2653,192 4.698 [36,844] 22,837 6.646 [304,399] 14,032 578,631 [18,278] 3.294 [95,119] 133.066 79.657 25.016 $ 8,534.377 $ 449.927 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2011 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 24 $ 313,300 $ 313.300 $ 313,300 $ 313,300 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor and a five-member commission. These financial statements present only the primary government of the City. Its component units, entities for which the government is considered to be financially accountable, are not presented within these financial statements. Component Units That Are Not Presented City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's baSIC mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the HOUSing Authority. The financial liability of the Housing Authority IS essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2011. Complete finanCial statements for each of the Individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina. KS Joint Ventures That Are Not Presented Housing Authority of the City of Salina 469 S 5th Salina, KS The City of Salina also participates with Saline County In two JOint ventures. for which financial information IS not presented The Salina-Saline County Board of Health was orgamzed by the City and County to prommE: pUblic health. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the admlnistratNe offices of both governments. The primary governments each have an ongoing financial responsibility for the jOint ventures. Separate financial statements are available from the governing boards of each jOint venture. Complete financial statements for each of the joint ventures may be obtained at the entity's administrative offices. Salina-Saline County Board of Health 125 West Elm Street Salina, KS 25 Salina County-City Building Authority 300 West Ash Street Salina, KS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-wide and fund financial statements The statement of net assets and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to thiS general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items. which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fidUCiary funds, even though the latter are excluded from the government-wide financial statements Major individual funds are reported as separate columns In the fund financial statements Nonmajor funds are aggregated and presented in a single column In the fund financial statements. C Measurement Focus, BasIs of Accounting and Basis of Presentation The government-wide financial statements are reported uSing the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is Incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements Imposed by the provider have been met. Governmental fund financial statements are reported uSing the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are conSidered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose. the City conSiders revenues to be available if they are collected within 60 days of the end of the current fiscal period Expenditures generally are recorded when a ilability IS Incurred. as under accrual accounting However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources .. 26 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and BasIs of Presentation (Continued) Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The City applies all applicable Governmental Accounting Standards Board (GASB) pronouncements as well as the following pronouncements issued on or before November 30, 1989. unless those pronouncements conflict with or contradict GASB pronouncements: FASB Statements and Interpretations, APB Opinions, and ARBs. Proprietary fund type operating statements present Increases (revenues) and decreases (expenses) in net total assets. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds Include the cost of sales and services. administrative expenses, and depreCiation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses The internal service funds account for risk management, worker's compensation, health Insurance, central garage and information services that are provided to other departments or agencies of the government. or to other governments, on a cost-reimbursement basis Agency funds are custodial In nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basIs of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds General fund -To account for resources traditionally assOCiated with government, which are not required legally, or by sound financiai management to be accounted for In another fund Flood and drainage improvement fund -To account for property tax revenues to be used for capital Improvements to the flood control and stormwater drainage systems Tourism and convention fund -To accoum for transient guest tax revenues, which are specifically restriCted to promotion and tourism activities, Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or Improvement of streets within the City Bicentennial Center fund -To account for the activities of the City'S convention center. Sales tax capital fund -To account for 87.5% of the 1/4 cent sales tax designated for capital, debt, and human services purposes, Debt service fund -To account for the accumUlation of resources and payment of genera! obligation bond prinCipal and interest from governmental resources and special assessment bond principal and Interest from special assessment levies when the City is obligated In some manner for the payment 27 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIF!CANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. The City reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the munlcipa! golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations D. Assets, Liabilities, Fund Balance. and Net Assets 1 Pooled cash and investments The City maintains a cash and Investment pool that IS available for use by all funds managed by the city. Each fund type's portion of this pool IS displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition Investments In the Kansas Municipal Pool are carned at fair value Cash balances from all funds are invested to the extent available In certificates of deposit and other authorized investments, Investments with maturity dates greater than three months are stated separately Earnings from these investments. unless specifically deSignated, are allocated monthly to the investing fund based on the percentage of funds invested to total Investments All Investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "Interfund recelvables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as 'due to/from other funds," Accounts Receivable. The City records revenues when services are provloeo Ali recelvabies are shown nel of an allowance for doubtful accounts Property taxes receivable. Collection of current year property tax by the County Treasurer IS not completed, apportIoned or distributed to the vanous subdiVISions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2012. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 28 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions In the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls The County Treasurer is the tax collection agent for all taxing entities within the ·County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are leVied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1. becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to Issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year The City Treasurer draws down all available funds from the County Treasurer's office In two-month intervals. Taxes remaining due and unpaid at February 15 and Juiy 1 are subject to collection procedures prescribed in state statutes 3. Inventories and Prepaid Items Inventories are valued at cost uSing the flrst-In/flrst-out (FIFO) method The costs of governmental fund-type inventories are recorded as expenditures when consumed Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid Items. 4. Capital Assets Capital assets. which include property, plant. equipment and Infrastructure assets, are reported in the applicable governmental or bUSiness-type actiVities columns In the government-wide financial statements Capital assets are defined by the government as assets with an initial. Individual cost of more than $5.000 and an estimated useful life In excess of two years Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded ai estimated fair market value at the date of donation Capital assets used In governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructeo Donated capital assets are recorded at their estimated fair value at the date of aonatlon The cost of norma! maintenance and repairs that do nO'! add to the value of the assets or matenaliy extend assets lives are not capitalized Major outlays for capital assets and Improvements are capitalized as projects are constructed Interest Incurred during the construction phase of capital assets of bUSiness-type is Included in the capitalized value of the asset constructed. net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated USing the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 29 Years 50 5 -15 6 -10 30 -50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities. Fund Balance, and Net Assets (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate eamed but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that IS expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it A liability tor these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the bUSiness-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees A iiability is recorded for accumulated rights to receive sick pay benefits that are payable upon termmation of employment. The General Fund, Bicentennial Center Fund. Central Garage Fund. Information Systems Fund, Sanitation Fund, Solid Waste Fund. Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6 Temporary Notes Upon authorization for the issuance of general obligation bonds for certain Improvements. Kansas law permits the temporary finanCing of such improvements by the issuance of temporary notes Temporary notes issued may not exceed the aggregate amount of bonds authOrized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7 Long-term Obligations In the government-Wide fmancial statements. and proprietary fund types in the fund fmancial statements. long-term debt and other long-term obligations are reported as liabilities In the applicable governmental activities. business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs. are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, dunng the current period. The face amount of debt Issued IS reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 30 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Assets (Continued) 8. Fund Balances In the fund financial statements, govemmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Malor Governmental Funds Flood & Tourism Other Total DramagE< and Specla! Bicentennial Sales Tar Debt Capital Governmental Governmenta! General Imorovement Convention Gas Center Capital Service Projects Fund~ Funos FUnd Balances Nonspendable for Inventory 89.716 $ $ $ 89716 Restricted for Public WorKS 1 094720 1.094720 Public health and sanltatlor, 4 Culture and recreatron 45.236 45.236 Planning and development 340473 29801t 638482 Debt payments 1.285.130 547.999 1 833 12,: CommItted for Public safety [7866] [786E; Culture and recreatlor 14288', 524 907 667 78< Planning and development 6.102 6102 Cemetery 421037 421.037 Capital Improvements 61013, [2477.564, 907,112 [960.318' A.ssrgned for Generai government 18400 18450 Public works 36755 907 323023 360.685 Planning and development 1'1.376 11 376 CapItal Improvement 226,235 787437 2868416 50.000 3932.08[ Unasslgnec 3453,708 ---3453 70£ Total Fund Balances $ 3.836.238 £ 907 ~ $ 1.417743 ~ ~ ~ ~ $ 2792.546 $11.604.34': 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 . 2011 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Assets (Continued) 9. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses dUring the reporting period. Actual results could differ from those estimates. 10. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation. reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. . Note 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute). debt service fund. and enterprise funds. The statutes provide for the following sequence and limetable In the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5 3. Public hearing on or before August 15. but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25 Tne statutes allow the governing body to Increase the Originally adopted budget for previously unbudgeted Increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend tne budget must be Dubhsheci In the local newspaper At least ten days after publication the hearing may be held and the governing body may amend the budget at that time The 2011 budget was amended for the Flood & Drainage Improvement Fund. Sales Tax Capital Fund. Water and Sewer Fund. Risk Management Fund and Central Garage Fund 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures Include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, non-major debt service funds, trust funds, and the following special revenue funds: Bicentennial Center Event, HUD Community Development, Community Development Revolving, Heritage Commission, CDBG-ED. HOME V, Special Law Enforcement, Police Grants, DARE Donations, War Memorial Maintenance and Federal Care Grant. A legal operating budget is not required for the following Enterprise funds: Solid Waste Construction, Water and Sewer Pnncipal and Interest Water and Sewer Bond Reserve, Water and Sewer Construction and Reserve funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown stnctiy for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations. other statutes, or by the use of internal spending limits established by the governing body B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2011 in the Flood & Drainage Improvement Fund and Sales Tax Economic Development Fund, which Violates KSA 79-2935 C. Legal Debt Margin The City IS subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property Within the city, as certified to the county clerk on the proceeding August 25. At December 31. 2011. the statutory limit for the City was $133.379.948. providing a debt margin of 75,990,305. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 3. RESTATEMENT OF EQUITY The implementation of GASB 54 required the reclassification of the governmental fund balances. The following is the reclassification of fu nd balance as of December 31 , 2010. Fund Balance Classification As of December 31, 2010 Unreserved Reserved Total Governmental Fund General Fund $ 3,517.895 $ 99.286 $ 3.617,181 Flood & Drainage Improvement Fund 187.350 1,176 188,526 Tourism and Convention Fund 367,197 367.197 Special Gas Fund 986,224 498.417 1,484,641 Bicentennial Center Fund 46,048 46,048 Sales Tax Capital Fund 1,572.216 582.151 2.154,367 Debt Service Fund 571,873 571,873 Capital Projects Fund [6,654,370) 4.044,369 [2,610,001) Other Governmental Funds 2,365.603 616.049 2,981,652 Total Governrnental Funds $ 2,388,163 S; 6.413,321 $ 8.801484 Fund Balance Classification As of December 31. 2010 Reclassified Nons[2endable Restricted Committed Assigned Unassigned Total Governmental Fund General Fund $ 87.238 $ $ $ 99,286 $ 3430.657 $ 3.617,181 Flood & Drainage Improvement Funa 187.350 1.176 188,526 TOUrism and Convention Fund 367.197 367,197 Special Gas Fund 986.224 498.417 1484,641 Bicentennial Center Fund 46,048 46,048 Sales Tax CaPital Fund 1.572 216 582151 2,154,367 Debt Service Fund 571.873 571.873 Capital Projects Fund [6,654,370) 4044.369 [2.610.001) Otner Governmental Funds 944,240 2.031.076 6.336 2.981.652 Total Governmental Funds :D 87.238 $ 2,869.534 $ [2,817,680) $ 5.231.735 $ 3.430.657 $ 8.801.484 FollOWing the close of the prevIous fiscal year. it was discovered that several capital assets were mlsclassified or recorded incorrectly Additionally, it was discovered that accounts receivable had not been properly recorded. Accordingly, the beginning net assets balances were restated, the effects of which are as follows Net Assets/Fund Balance, December 31. 2010 CaPllal Asset Adjustment Accounts Receivable Adjustment Net Assets/Fund Balance, December 31, 2010 Restated Solid Waste Water and Golf Central Governmentai General Disposal Sewer Sanitation Course Garage ActiVities Fund Fund Fund Fund Fund Fund $ 117,797.911 $ 3,617,181 $ 3,895,812 $ 58,578,036 $ 1,159,149 $ 304,622 $ 205,887 956,001 762 [19,712J [11.485J [287] 3,582 156,424 156,424 $ 118.910 336 $ 3,773.605 $ 3.896.574 $ 58.558,324 $ 1 147664 $ 304,335 $ 209.469 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank In the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds' U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categones by Moody's investors service or Standard and Poor's corporation, and various other investments as specified In KSA 10-131 At December 31, 2011, the City has the following investments. Investment Type Kansas MUnicipal Investment Pool U.S. Government Securities Total fair value Fair Value $ 305,158 S&P AAAf/S1+ 22,063.739 N/A $ 22.368,897 The municipal Investment pool is under the oversight of the Pooled Money lnvestment Board. The board IS comprised of the State Treasurer and four additional members appOinted by the State Governor. The board reports annually to the Kansas legislature State pooled mOnies may be Invested In direct obligations of. or obligations that are insured as to principal and Interest by the U.S. government or any agency thereof, With maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may Invest In repurchase agreements with Kansas banks or with primary government secuntles dealers. The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio In terms of maturities, Instrument type, and issuers. Therefore, portfolio matUrities shall be staggered to aVOid undue concentration of assets in a specific maturity sector. Liquidity, free of market nsk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) When advantageous, it IS allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illIquidity. Portfolio diversification is employed as a way to control risk due to Issuer default. In the event of a default by a specific issuer, the Director of Finance and AdmInistration shall review, and, if appropriate, proceed to lIquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit polIcy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402 B. Receivables Receivables as of year end. including the applicable allowances for doubtful accounts, are as follows: Primary Government Receivables Accounts Taxes Interest Gross receivables Less allowance for uncollectibles Totai Primary Governmen: RecelvaDies Accounts Taxes Interesr Gross recelvaOles Less allowance for uncollectlblef', Total General $ 2889.545 8,094092 35.877 11 019.515 [2211,730J $ 8,807.785 Tourism and Special Conventlor Gas l 338,271 $ 312642 338.271 312,648 ~ 338.271 $ 312.648 Otrler Governments! Sanitation S; 52,15~1 S, 201.972 5L,15~ 201 87:::: [982J [62.801J 51.169 ~ 139,172 36 Bicentennial Debt Center Service Subtotal $ 54966 $ $ 3.282782 2441,349 10.848090 35877 54.966 2,441.349 14,166,749 [2.211730J ~ 54,966 S; 2441.349 $ 11.955019 Solid Water Waste and Disposal Sewer Total !t 231 123 S 1489.51' $ 5.257,54CJ 10.848,090 IE 35892 23', 139 1,489.511 16141.523 [4631471 [2738660J $ 231 139 S 1 026.36Ll $ 13402.863 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) C. Interfund Receivables and Payables The composition of interfund balances as of December 31,2011, is as follows: Fund Types Due From Due To General Fund $ 9,375 $ Other Government Funds 9.375 $ 9.375 $ 9,375 The City uses interfund receivables and payables as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31. 2011, was as follows: Balance Adj. Bal Balance 12/31/2010 Adlustments 12/31/2010 Additions Retirements 12/31/2011 City governmental activities Governmental activities Capital asselS, not being depreciated Construction In progress $ 32.549.155 $ 81,670 $ 32.630,825 2.945.099 3021,567 $ 32.554,357 Land 22,477.191 22.477,191 22477,191 Capital assets. being depreciated Infrastructure 144.316,296 144.316.296 1,829.401 146.145.697 BUildings and Improvements 36.233,800 36,233.800 36,233.800 Vehicles 7480,033 810.889 8.290.922 255 156 216.023 8.330,055 Equipment. furniture and fixtures 5.353682 92.755 5446437 246676 235.912 5.457.201 Total capital assets 248410157 985.314 249.395.471 5.276.332 3473.502 251 198.301 Less accumulated depreciation for Infrastructure 60,603.797 [30.296J 60.573.501 2964.133 63.537.63<1 Buildings and Improvements 12.609.132 10.741 12.619.873 1,023.364 13643.237 Vehicles 5.035.374 [40 529J 4.994845 513.718 174.927 5333.636 Equipment. furniture and fixtures 4039705 89397 4.129102 228 84~ 188665 4169.281 Total accumulated depreciation 82.28800b 29313 82.317321 4730059 363592 86.683 788 Governmental activities capital assets net ~ 166.122149 S 956.001 $ 167.078 150 546.272 :3 109.910 S, 164.514.513 BUSiness-type activilies Capital assets, not being depreCiated Construction In progress 1 516.604 So $ 1.516.604 $ 10781.482 $ 1 236.031 $ 11.062.055 Land 1.541.002 1.541.002 1.541,002 Capital assets being depreCiated Infrastructure 68.957.665 11932 68.969.597 2333.997 71 303.594 BUildings and Improvements 22.587106 22.587106 22587106 Vehicles 2.987740 [4-1.385] 2946.355 139452 102.647 2.983160 EqUipment, furnttur~ and fixtures 4376725 27.010 4403735 30.82<1 01 434.55? Total capital assets 101.966.842 [2.443J 101 964.399 12.285755 1.338.678 113.911476 Less accumulated depreclat!or'] t~r Infrastructure 210.973.2810 [34.750: 28938.538 1.774.866 30 71:0 40" BUildings and Improvements 10.241.870 17.027 10,258.897 424.276 10683,173 Vehicles 2,084.391 946(1 2,093 851 179,756 102.647 2170,960 EqUipment. furniture and fixtures 2.394.35€ 310.54:' 2430.898 2/4.29LI 2.7CJ519L Total accumulated depreCiation 43.693905 28.279 43.722184 2653192 102647 46272.728 bUSiness-tYPE: actiVities capital assets ne"l $ 58.272937 c [307221 S; 58242.215 $ 10632563 ~ 232,03'1 $ 67 (538,747 ~ 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City's depreciation expense was charged to governmental functions as follows: E. Long-Term Debt Governmental Activities: General government Public safety Public works Public health Culture and recreation Planning and development Total depreciation Business-type Activities: Solid Waste Disposal Water and Sewer Sanitation Golf Course Division Total depreciation $ 8,990 507,826 3,265,341 38,013 803,772 106,117 $ 4,730,059 $ 740,047 1,758,777 120,799 33.569 $ 2,653,192 Following is a summary of changes in long-term debt for fiscal year 2011 : Balance January 1, 2011 Additions Deletions Governmental activities General obligation bonds $ 53,120.953 $ 6.587,986 $ 4.483,269 Accrued compensation 3,230,488 440,340 581,694 Temporary notes 2,500.000 3.400.000 2.500,000 Total $ 58.851441 $ 10,428,326 $ 7,564.963 BUSiness-type actlv!ties General Obligation bonds $ 8,614.577 S, $ 1,396,670 Revenue bonds 1,580,000 16,193,925 1,580,000 Accrued compensation 667,768 104.025 122,302 Total $ 10,862,345 3' 16,297,950 $ 3,098.972 39 Balance December 31, 2011 $ 55,225,670 3,089,134 3.400.000 $ 61 714,804 S, 7,217,907 16,193,925 649,491 $ 24,061.323 Amounts Due Within One Year $ 5,051,038 581 694 3,400.000 SO 9,032732 $ 1,200,048 343,696 122.301 <!: 1,666,045 '" CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following IS a detailed listing of the city's long-term debt including general obligatIon bonds, revenue bonds, temporary notes and loans payable' Primary Government Original Interest Bonds General Obligation Bonds Issue Rates Outstanding Internal Improvements 2002B. due 10/1/2017 $ 1,980.000 2.70% to 4.50% $ 165,000 Internal Improvements 2003A, due 10/1/2018 4,350,000 2.13% to 3.85% 1,765,000 RefundIng 2004A, due 8/1/2015 5,585,000 2.10% to 4.00% 1,170.000 internal Improvements 20048, due 10/1/2019 4,053.000 3.00% to 4.00% 1,390,000 Internal Improvements 2005A, due 10/1/2020 4.210.000 2.95% to 4.25% 2.200,000 Internal Improvements 2006A, due 10/1/2026 2,200,000 3.55% to 5.50% 1,650,000 Internal Improvements 2006B, due 10/1/2021 885,000 4.00% to 4.50% 535,000 Internal Improvements 2007 A, due 10/1/2027 6,545,000 4.25% to 4.625% 5,085.000 Internal Improvements 2008A. due 10/1J2023 3,720,000 3.25% to 4.00% 3,000,000 Internal Improvements 2008B, due 7/1/2028 3,525,000 3.65% to 5.00% 3,415,000 Internal Improvements 2009A, due 10/1/2029 23.695,000 2.00% to 5.00% 21,877,424 Internal Improvements 201 OA, due 10/1/2025 6.916,592 200% to 3,875% 6,138.819 Internal Improvements 2010B. due 10/1/2023 7,973.044 0,50% to 3,00% 7,464,348 Internal Improvements 2011A. due 10/1/2031 6,587,985 2.00% to 5.00% 6,587.986 Total general obiigation bonds $ 62.443.577 Revenue Bonds Revenue 2011, due 10/1/31 $ 16.193,925 2,00% to 4.60% $ 16.193,925 Total revenue bonds $ 16,193.925 Temporary Notes Series 2011-1, due 8/1/2012 $ 3.400,000 0.40% $ 3.400.000 Total revenue bonds $ 3,400.000 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt serVice requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2012 $ 6.251,086 $ 2,299.881 $ 8,550,967 2013 6,286,086 2.026,639 8,312,725 2014 5,961,086 1,802,699 7,763,785 2015 5,161,086 1,611,107 6,772,193 2016 5,001,086 1,440,080 6,441,166 2017 -2021 19,865.428 4,617,544 24,482,972 2022-2026 10,541.564 1,805,185 12,346,749 2027 -2031 3.376,155 307,047 3,683,202 Total $ 62.443,577 $ 15.910,181 $ 78,353,758 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues Revenue Bonds -Prima!}, Government Bonds Interest Year Outstandina Due Total 2012 $ 343,696 $ 596,991 $ 940,687 2013 623,696 590,191 1,213,887 2014 633,696 577.791 1,211,487 2015 643,696 565,191 1.208.887 2016 663.696 549,191 1,212.887 2017-2021 3,638.480 2,433,862 6,072,342 2022-2026 4.323.480 1.738.821 6,062,301 2027-2031 5.323.485 743,320 6,066.805 Total $ 16,193.925 $ 7,795,358 5) 23.989.283 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporarv Notes -Primary Government Bonds Interest Year Outstanding Due Total 2012 $ 3,400,000 $ 14,204 ,;",$ =~3. 4.1..,; ..4,4;,2;;,,;;0=4 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 3"1, 2011 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue In the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Conduit debt. The City has entered into several conduit debt arrangements wherein the City issues industrial revenue bonds to finance a portion of the construction of facilities by private enterprises. In return, the private enterprises have executed mortgage notes or leases with the City. The City is not responsible for payment of the original bonds, but rather the debt is secured only by the cash payments agreed to be paid by the private enterprises under the terms of the mortgage or lease agreements. Generally, the conduit debt is arranged so that payments required by the private enterprises are equal to the mortgage payments schedule related to the onginal debt. At December 31,2011, total outstanding conduit debt was $86,472,423. Defeased debt. In pnor years, the City has defeased certain other outstanding debt obligations by plaCing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds Accordingly, the trust accounts and the defeased bonds are not Included in the City's financial statements At December 31.2011, the City had $325.000 of outstanding defeased debt. F. Reconciliation of Transfers A reconciliation of Interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $ 868,838 $ 997,949 Flood and drainage Improvement fund 907 Tourism and convention fund 596.440 Special gas fund 180,000 1,836 Bicentennial center fund 872.849 Sales tax capital fund 8.558 3.501,556 Debt service 2.225,565 83,488 Capital projects fund 3.289,564 405.549 Other governmental funds 547,389 105,259 Agency funds 198.821 Solid waste disposal fund 180,000 Water and sewer fund 2,030,000 Golf course fund 47,228 Centra! garage fund 60.000 Total Transfers $ 8,100.898 $ 8,100,898 The City uses interfund transfers to share administrative costs between funds. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Plan description. The City participates in the Kansas Public Employees Retirement System (KPERS) and the Kansas Police and Firemen's Retirement System (KP&F). Both are cost-sharing multiple-employer defined benefit pension plans as provided by Kansas statutes (KSA 74-4901 et seq). KPERS and KP&F provide retirement benefits, life insurance, disability income benefits and death benefits. Kansas law established and amends benefit provisions. KPERS and KP&F issue a publicly available financial report that includes financial statements and required supplementary information. Those reports may be obtained by writing to 611 South Kansas, Suite 100; Topeka, Kansas 66603 or by calling 1-888-275-5737. Funding Policy. K.S.A. 74-4919 establishes the KPERS member-employee contnbution rate at up to 6% of covered salary. K.S.A. 74-4975 establishes the KP&F member-employee contribution rate at 7% of covered salary. The employer collects and remits member-employee contributions according to the provisions of section 414 (h) of the Internal Revenue Code. State law provides that the employer contribution rates be determined annually based on the results of an annual actuarial valuation. KPERS and KP&F are funded on an actuarial reserve basis. State law sets a limitation on annual Increases in the employer contribution rates. The KPERS employer rate was 6.96% from January 1 to December 31,2011. The City employer contributions to KPERS for the years ending December 31, 2011, 2010, and 2009 were $987,826. $1,039,728 and $831,493, respectively, equal to the required contributions for each year. The KP&F employer rate established for fiscal years beginning in 2011 IS 17.68%. Employers participating In KP&F also make contributions to amortize the liability for past service costs, if any, which are determined separately for each participating employer. The City's contributions to KP&F for the years ended December 31, 2011, 2010, and 2009 were $1,787.801. $1,664.356 and $1,769,379, respectively, equal to the required contributions for each year B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created In accordance with Internal Revenue Code Section 457. The Plan. available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.R.C. Section 125) The City Commission has adopted by resolution a salary reduction fleXible benefit plan ("Plan") under Section 125 of the Intemal Revenue Code. All City employees working more than 20 hours per week are eligible to participate In the Plan beginning after two full months of employment. Each participant may elect to reduce hiS or her salary to purchase benefits offered through the Plan Benefits offered through the Plan Inciude vanous l'lsurance and disability benefits D. Risk Management The City IS exposed to various risks of loss related to torts: theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in Insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATlm~ (Continued) D Risk Management (Continued) The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage Insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims. have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of Inflation, recent claim settlement trends Including frequency and amounts of payouts and other economic and social factors The liability for claims and Judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $172,545 IS considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2011 2010 Unpaid claims, January 1 $ 425.582 $ 372,610 Incurred claims (including IBNRs) 126.625 409,801 Claim paym'ents [230.417] [356,829] Unpaid claims December 31 $ 321.790 $ 425.582 The City established a limited risk management program for employee health and dental insurance In 1997 The program covers eligible City employees. Premiums are paid Into the health Insurance fund by all other funds and are available to pay claims. claim reserves and administrative costs of the program. An excess coverage Insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims. have been accrued based primarily upon subsequent payments Claim liabilities are calculated considerrng the effects of inflation. recent claim settlement trends including frequency and amounts of payouts and other economic and social factors The liability for claims and judgments In the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources Therefore, all of the liability IS considered to be due within one year. Changes in the balances of claims Ilabiirties during the past two years are as follows' 2011 2010 Unpaid claims. January 'I $ 382502 $ 421 530 Incurred claims (including IBNRs) 4.229.571 4198,012 Claim payments [4.220,898J [4.237.040) Unpaid claims. December 31 $ 391.175 $ 382,502 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATION (Continued) E. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2011. Project N Ohio Grade Separation Bicentennial Improvements Markley, Magnolia, Valleyview Sanitary Sewer Improvements and Manhole and Wastewater Pump Station Rehabilitation Grand Prairie Addition Magnolia Commons South 9th Corridor, Phase IV Scoular Addition Waterline Imp. Stone Creek Addition Riffel # 2 Infrastructure East Magnolia Road Replacement Aviation Service Center Fire Station # 1 Authorization $ 6,617,581 2,500,000 5,150,000 1,618,096 3,415,564 6.500,000 75,453 440,193 977 .917 4.500.000 5,500,000 1,787,000 Expenditures $ 6,523,786 2,505,636 1,070,277 1.479,406 3,003,051 6.201.014 48.673 324,404 893,024 432,128 3,737.322 226,131 Project overages in the Bicentennial Improvements project will be reimbursed by special sales tax proceeds F Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies In the form of grants and state pass-through aid The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management. any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31 2011. The City is a defendant In various laWSUits Although the outcome of these lawsuits IS not presently determinable. It IS the opinion of the City's legal counsel that resolution of these matters will not have a matenal adverse effect on the finanCial condition of the City G. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and mOnitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfili stops accepting waste, the City reports a portion of these closure and postciosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $2.042.254 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 29.5% of the estimated capacity of the landfill 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) G. Municipal Solid Waste Landfill (Continued) The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,891,330 as the remaining estimated capacity is filled over the remaining life expectancy of 68.8 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2011. Actual cost may be higher due to inflation. changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and postclosure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process. including the issuance of general obligation bonds, if necessary'. H. Environmental Matters The Kansas Department of Health and Environment (KDHE) Issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive PoliCY and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered Into a Consent Order and Settlement Agreement under which the City assumed pnmary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the City on or about September 9, 1966. The property IS now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlOrinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the Investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory overSight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Pnority List Superfund Site, but Investigation and remediation are reqUired to be In compliance with the Comprehensive Environmental Response. Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties assOCiated with the release or presence of hazardous substances. including not only those entities involved with contaminant use and disposal, but In some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the City is potentially liable under CERCLA. although the City believes that It has meritorious defenses to such liability The City is under no admlntstrative orders from the EPA or KDHE. The City IS considered to be a Potentially Responsib!e Party (PRP) for the Site, primarily due to its status as a property owner. The Salina Airport Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University at Salina) (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2011 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities. by arid through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice On May 14,2009 the City was notified that the Corp referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entitles delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May. 2010. The Salina Public Entitles did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. On or about May 27. 2010. the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M Gates, in his official capacity (collectively, "Defendants") On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count III Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter JUrisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees, He denied the Defendants' motion to strike the Salina Public Entitles' allegations of a conflict of interest The Salina PubliC Entities' claims under Counts III and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings, The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings, On or about April 22. 2011, Defendants filed their Answer to First Amended Compialnt and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17,2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b )(3). 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31. 2011 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Since the lawsuit remains pending without a final settlement, the City intends to vigorously pursue its claims and contest the ciaims brought against it Based on presently known information, the City has determined that while a possible liability exists, at this time no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. !. Postemployment Health Care Plan Plan Descnption The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local govemmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is Issued for the Plan. FundIng Policy. The contribution requirements of plan particIpants and the City are established and amended by the City The requIred contribution is based on projected pay-as-you-go financing requirements. Plan partIcipants contributed approxImately $229,000 to the Plan (approximately 100% of total premiums) through their required contributIon of $425 per month for retiree-only coverage and $1 ,141 for family coverage. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost (expense) IS calculated based on the annual requIred contributIon of the employer (ARC). an amount actuanally determined In accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis. is projected to cover normal cost each year and amortIze any unfunded actuanal liabilities (or funding excess) over a period not to exceed thIrty years. The following table shows the components of the City's annual OPEB cost for the Plan for the year, the amount actually contributed to the plan, and the changes In the Citys net OPEB obligatIon to the Plan: Annual required contribution Interest on Net OPES Oblrgatlor, Adjustment to Annual ReqUIred ContributIon Annual OPES cost (expense) Benefit payments Change In net OPES obligation Net OPES obligation -beginning of year Net OPEB obligatIon -end of year 48 $ 961,335 95,743 [79.786] 977,292 229.000 748.292 2.393.591 £; 3.141,883 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31,2011 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the year ended December 31,2011 was as follows: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31,2008 $ 910,418 $ 96.672 $ 813,746 December 31,2009 957,353 100,000 1,671,099 December 31, 2010 921,492 199,000 2,393,591 December 31,2011 977,292 229,000 3,141,883 Funding Status and Funding Progress. As of the year ended December 31, 2011, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $9,019,806 and the actuanal value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $9,019,806. The covered payroll (annual payroll of active employees cbvered by the plan) was $21,942,428. and the ratio of the UAAL to the covered payroll was 41.11 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are Increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that pomt The actuarial methods and assumptions used Include techniques that are designed 10 reduce tne effects of snort-term volatility In actuanal accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations In the year ended December 31, 2011, actuarial valuation. the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.00% investment rate of return, which is the rate of the employer's own Investments as there are no plan assets and an Initial annual medical and dental healthcare cost trend of 9.30%, reduced by decrements to an ultimate rate 4.70% after eighty-two years. The UAAL IS being amortized as a level dollar over an open thirty-year period. 49 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQU IRED SUPPLEMENTARY INFORMATION December 31,2011 Schedule of Employer Contributions: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31,2008 $ 910,418 $ 96,672 $ 813,746 December 31,2009 957,353 100,000 1,671,099 December 31,2010 921,492 199,000 2.393,591 December 31,2011 977,292 229,000 3,141,883 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued AAL Ratio Payroll Date Assets (a) Llabilit~ (b) (b) -(a) (alb) l£} 12/31/2008 $ $ 8,917,346 $ 8,917.346 0.0% $ 21,874,112 12/31/2009 8,917,346 8,917,346 0.0% 22,397.996 12/31/2010 9,019,806 9,019,806 0.0% 22,613,236 12/31/2011 9.019.806 9,019,806 0.0% 21,942.428 50 UAAL as Percent of Payroll (b-a)/{ c) 40.77% 39.81 % 39.89% 41.11% CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Revenues Original Taxes Real estate taxes $ 7,564,507 $ 7,359,721 Delinquent taxes 212,244 292.488 Motor vehicle taxes 723,857 937,258 General sales tax 11.767,400 11,716,000 Other taxes 4.221.302 4.585.000 Total taxes 24,489.310 24.890467 Charges for services General charges 144.556 General government 340 8,912 Pubilc safety 3465,106 4.505812 Public works 261,707 156,904 Health and sanitation 51,838 62.300 Culture and recreation 1,324,551 1.295,614 Community and economic development 10,368 9,982 Total charges for services 5,258466 6.039,524 Operating grants restncted General grants 153566 185,000 PubliC safety 631 417 837.000 Comrnunlty and economic development 28.202 Total operating grants. restricted 813,185 1,022,000 Operating grants, unrestncted General grants 2.500 503 Public works' 250 3,000 Culture and recreation 8.241 18,000 Total operating grants unrestncted 10,991 21,503 Interest Income General Interest 1574S 65000 TOlallnteresllncome 15,749 65.00C Jnterfund services provldeo General services 1,392,161 918,017 General government 2.532316 1 755876 Community and economic deveiopmem 63,34G 5050, T atal Interfunc services providec 3.987 8,7 272L1.39Ll Miscellaneous revenues General miscellaneous revenues 118,112 134.321 General government 90 Public safety 185,054 199.000 PubliC works 4,134 10000 Culture and recreation 16.439 25000 Total misceilaneous revenues 323.829 368.321 Proceeds of capital assets General sales 30,000 Public safety 200 Total proceeds of capital assets 200 30,000 Total revenues 34.899.547 35,161.209 See Independent auditor's report on the financial statements 51 Final $ 7,359,721 292,488 937,258 11.716.000 4,585.000 24.890.467 8.912 4.505.812 156,904 62,300 1.295,614 9.982 6,039,524 185.000 837.000 1,022,000 503 3.000 18,000 21,503 65.000 65,000 918 017 1 755.876 50,50, 272L1,39L1 134 321 199.000 10 000 25.000 368,321 30,000 30.000 35.161,209 Vanance with Final Budget Positive [Negative] $ 204,786 [80,244] [213,401J 51,400 [363,698J [401 157) 144.556 [8.572J [1.040706J 104,803 [10,462J 28,937 386 [781,058) [31.434] [205.583J 28.202 [208,815J 1,997 [2.750J [9,759J [10,512J f49,251J [49,2511 474.144 776.440 ~2 839 1.263423 [16.209J 90 [13946J [5,866] [8,5611 [.14,492) [30,000J 200 [29.800) [261,662) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND (Continued) For the Year Ended December 31,2011 Budgeted Amounts Actual Onglnal Final Expenditures General Government City commiSSion $ 102,880 $ 112.383 $ 112.383 City manager 505.962 555,736 555.736 Legal 381,704 305.300 305,300 Finance 617,575 553.074 553.074 Human resources 374,387 350,007 350,007 Other general government 1.198,470 987,080 987.080 Contingencies 20,884 50.000 50.000 Total general government 3.201,862 2,913.580 2.913.580 Public Safety Police 8.409,519 8,307,450 8.307.450 MUniCipal court 1.430,676 1,625.516 1,625.516 Fire 8,166.268 7,763,377 7,763,377 Total public safety 18.006.463 17.696.343 17,696,343 PUbliC Works Buildings and general improvements 1,005,385 1.253.194 1.253.194 Englneenng 997.558 980.799 980,799 Streets 1.759.697 1826,158 1.826.158 Flood works 203,126 221,058 221,058 Traffic control 743 165 819.062 819.062 Parks 1409,829 1 444,930 1.444,930 ADA compliance 6.440 15.000 15,000 Total public works 6,125,200 6.560.201 6.560.201 PubliC Health and Sanitation Cemetery 157.981 146.827 146,827 Health department 1,018.101 967.138 967,138 Total public health and sanitation 1.176082 1.113.965 1113.965 Culture and Recreation SWimming pools 430.322 419.838 419838 Neighborhood centers 41773 46.233 46.233 Recreation 1 810910 1 640.473 1,640473 Arts and humanities 1,079 Smoky Hill museum 448463 435.263 435.263 Total culture and recreation 2732.547 2,541.807 2.541.807 Community Development Human relations 330,092 337.809 337.809 Development services 1,215,034 1.332.930 1.332.930 Agency contracts 771.970 783,921 783.921 Total community development 2317.096 2.454.660 2.454.660 Capital Outlay Capital outlay 867.777 876.345 876.345 Cash Reserve 4.354.391 4,354.391 Total expenditures 34.427.027 38,511.292 38.511.292 Excess [defiCiency] of revenues over [under] expenditures 472.520 [3.350,0831 [3.350.083] See Independent auditor's report on the financial statements. 52 Variance with Final Budget Positive [Negative] $ 9,503 49,774 [76.404] [64,501] [24,380] [211,390J 29,116 [288,282) [102,069J 194,840 [402,891) [310.120) 247.809 [16,759J 66461 17.932 75.897 35.101 8.560 435,001 [1'.154J [50,963) [62.117) [10.484] 4.460 [170.437] [I,079J [13.200) [190.740] 7.717 117,896 11,951 137,564 8.568 4.354,391 4.084,265 3.822.603 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND (Continued) For the Year Ended December 31,2011 Budaeted Amounts Other financing sources [usesJ Transfer In Transfer [outJ Total other financing sources [usesJ Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance January 1 Pnor year cancelled encumbrances $ Actual 168.838 [997.949J [829,111) [356.591J 2.918,651 7140 Original $ 500.000 [994.358J [494.358) [3.844.441J 3.978.485 Unreserved fund balance. December 31 2.569.200 S; 134.044 Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance. December 31 35,877 677.815 8.094.093 89.716 [7.923.279J 292.816 S; 3.836.238 See independent auditor's report on the financial statements 53 Final $ 500,000 [994.358J [494.358) [3,844,441J 3,978485 $ 134.044 Vanance with Final Budget Positive [Negative] $ [331,162] [3.591J [334.753) 3.487,850 [1,059,834J 7,140 $ 2435.156 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) FLOOD AND DRAINAGE IMPROVEMENT FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Final Revenues Taxes Delinquent taxes $ 6,016 $ 2.268 $ 6,020 Total taxes 6.016 2.268 6,020 Interest income General interest 138 138 Total Interest Income 138 138 Miscellaneous revenues General miscellaneous revenues 11,550 8,064 Total miscellaneous revenues 11.550 8,064 Total revenues 17.566 2.406 14.222 Expenditures Capital Outlay 205.823 11.130 200,000 Total expenditures 205,823 11,130 200,000 Excess [deficiency] of revenues over [under] expenditures [188,257] [8,724] [185,778] Other financing sources [uses] Transfer in 907 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [187.350] [8,724] [185,778] Unreserved fund balance. January 1 187.350 8.724 187.350 Unreserved fund balance, December 31 -$ -$ 1,572 Reconciliation to GAAP Current year encumbrances 907 GAAP Fund Balance, December 31 $ 907 See independent auditor's report on the financial statements. 54 Variance with Final Budget Positive [Negative] $ [4] [4J [138] [138] 3,486 3,486 3,344 [5,823J [5.823J [2.479] 907 [1.572J $ [1,572) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31,2011 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Revenues Taxes Other taxes $ 1,332,827 $ 1,350.000 $ 1,350,000 $ [17,173] Interest income General interest Total revenues Expenditures Community Development Tourism Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfer [out] Excess [defiCiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January -: ,43 143 1,332.970 1.350.000 1,350.000 [17,030] 736,386 751.664 751,664 15.278 736.386 751,664 751.664 15.278 596.584 598.336 598,336 [1.752] [596440) r600.000] [600.000] 3.560 14.t ['I 664J [1.664J 1.808 ___2-, -,0"",5_8 : ,6 64 1, 664 394 Unreserved fund balance. December 3, 2.20:2 S $ -$ 2.202 ~===~ Reconciliation to GAAP Accounts receivable 338.271 GAAP Fund Balance. December 31 $ 340.473 See Independent auditor's report on the financial statements. 55 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Operating grants, restricted Public works $ 1,366,522 $ 1,460,382 $ 1,460.382 Interest income General Interest 3.718 6,000 6,000 Total revenues 1,370,240 1,466,382 1,466,382 Expenditures Public Works Streets 426.084 425,395 425,395 Capital Outlay 1,401,756 1,886,116 1.886,116 Cash Reserve 500,000 500.000 Total expenditures 1,827.840 2,811,511 2,811 511 Excess [deflclencyJ of revenues over [under] expenditures [457.600) [1.345,129) [1,345,129) Other financing sources [uses] Transfer In 180.000 180,000 180,000 Transfer [out] [1.836) Total other financing sources [uses] 178,164 180,000 180,000 Excess [deficiency] of revenues and other sources over [under] [279436] [1 165.129] [1,165.129] expenditures and other [uses] Unreserved fund balance. January 1 735.009 1,165.129 1,165.129 Pnor year cancelled encumbrances 370.888 Unreserved fund balance, December 31 826,461 $ -$ -Reconciliation to GAAP Taxes receivable 312,648 Retainage payable [44,389] Current year encumbrances 323,023 GAAP Fund Balance. December 31 $ 1.417.743 See independent auditor's report on the financial statements. 56 Variance with Final Budget Positive [Negative] $ [93,860J r2,282] [96,142] [689J 484,360 500,000 983.671 887.529 rl,836) [1,836) 885693 [430,120J 370888 $ 826,461 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Onglnal Final Revenues Charges for services Culture and recreation $ 772,480 $ 1,379,500 $ 1,379,500 Interest income General interest 193 3,500 3.500 Miscellaneous revenues General miscellaneous revenues 692 Total revenues 773.365 1.383,000 1.383,000 Expenditures Culture and Recreation Bicentennial Center 1,548,901 1.902.262 1,902.262 Capital Outlay 11,028 532.850 532,850 Cash Reserve 329,400 329.400 Total expenditures 1.559.929 2,764.512 2,764.512 Excess [deficiency] of revenues over [underJ expenditures [786.564) [1.381,512) [1,381,512] Other financing sources [uses) Transfer In 872.849 875.000 875.000 Total other financing sources [uses J 872.849 875.000 875.000 c.xcess [deficiency] of revenues and other sources over [under] expenditures and other [uses} 86.285 [506.512J [506.512J Unreserved fund balance. January I 1.630 506.5~2 506.512 Unreserved fund balance. December 31 87,915 SJ -$ -Reconciliation to GAAP Accounts receivable 54,966 GAAP Fund Balance, December 31 $ 142,881 See independent auditor's report on the financial statements. 57 Variance with Final Budget Positive INegatlve] $ [607,020] [3,307J 692 [609.635) 353,361 521,822 329.400 1.204.583 594,948 [2.151] [2,151 J 592.797 [504.882J $ 87,915 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales tax $ 3,763,045 $ 3,686,500 $ 3,686,500 Interest income General interest 5.683 20.000 20,000 Total revenues 3.768,728 3.706,500 3.706,500 Expenditures General Government Other general government 155.000 Capital Outlay 2.371,778 1,805,000 3,130,211 Cash Reserve 185,580 Total expenditures 2,371.778 1,990.580 3.285,211 Excess [deficiency) of revenues over [under) expenditures 1,396.950 1.715.920 421,289 Other financing sources [uses] Transfer in 8,558 Transfer [out] [2.367,590) [2,000.000) [2.000,000) Total other financing sources [uses) [2.359,032) [2.000.000) [2.000.000) Excess [defiCiency] of revenues and other sources over [under) expenditures and other [uses] [962,082] [284,080] [1.578.711] Unreserved fund balance. January 1 1,572.216 284,080 1.578,711 Unreserved fund balance, December 31 610,134 :;; -$ -Reconciliation to GAAP Current year encumbrances 787,437 GAAP Fund Balance. December' 31 $ 1.397.571 See independent auditor's report on the financial statements. 58 Variance with Final Budget Positive [Negative] $ 76,545 [14.317) 62,228 155,000 758,433 913.433 975,661 8,558 [367,590) [359,032) 616,629 [6.495J $ 610.134 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS Special revenue funds are used t.o account for specific revenues that are legally restricted to expenditure for particular purposes. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building .projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Bicentennial center event fund -To account for the revenues and expenses associated with special events (concerts, shows, etc.) at the City's convention center. HUD community development fund -To account for grants received from the state to be used for housing or economic development purposes Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis Heritage commission fund -To account for revenues and expenses associated with heritage preservation activities Sales tax economic development fund -To account for 12.5% of the 114 cent sales tax designated for economic Development purposes. Fair housing fund -To account for grants received from the federal government to be used to monrtor and mediate fair housing complaints. CDBG ED fund-To account for grams received from the federal government to be used for economic development loans to qualifying businesses . HOME V fund -To account for grants received from the state government to be used for housing rehabilitation. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired dUring drug enforcement activities. Expenses are limited to capital Items to be used for further drug enforcement activities Police grants fund -To account for revenues from grants, which are to be used for special poiice activities, Including the DAR.E program D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE Grant -To account for revenue and expenses associated with the CARE Grant. 59 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NON MAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest . earnings are used for mausoleum maintenance. Tncentennla! commission fund -To account for donations to be used to celebrate the nation's tncentennial in the year 2076, 60 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2011 Total Total Nonmajor Nonmajor Special Revenue Permanent Funds Funds $ 1,790.051 $ 426,741 51,169 $ 1,841,220 $ 426,741 LIABILITIES AND FUND BALANCES liabilities: Accounts payable $ 14.039 $ -Due to other funds 9.375 Total liabilities 23,414 Fund balances: Restricted 343,255 Committed 1,424,551 426.741 Assigned 50.000 Total fund balances 1,817,806 426,741 Total liabilities and fund balances S; 1.841.220 $ 426.741 Nonmajor Debt Service Fund $ 556,603 $ 556,603 $ 8,604 8,604 547.999 547,999 $ 556.603 See independent auditor's report on the financial statements. 61 Total Nonmajor Governmental Funds $ 2,773.395 51,169 $ 2.824,564 $ 22.643 9.375 32.018 891.254 1,851,292 50,000 2.792,546 $ 2.824,564 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31,2011 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 317.297 $ -$ -Intergovernmental 520.055 205.582 Charges for services 1,115,913 9.109 Licenses and permits 6.250 Investment revenue 5.394 1,177 49 Miscellaneous 72.293 Total revenues 2,037.202 10.286 205,631 EXPENDITURES Current Culture and recreation 1,616,170 PubliC health and sanitation 153730 Planning and development 288,275 Miscellaneous 35 Debt service Pnncipal retirement 25.000 110.000 Interest and other charges 4,399 157,345 Capital outlay 529.401 Total exoenditures 2.616.975 35 267.345 Excess [deflciencyj of revenues over [under] expenditures r579.773; 10.251 r61.714) Other finanCing sources !uses] Transfers Ii. 547.389 Transfers lout] [105.259} Total other finanCing sources [uses] 442,130 ['-Jet change in fund balance [137.643) 10.251 [61.714J Fund baiance -Beginning of year 1,955.449 416,490 609,713 Fund balanCe -End of year c;: '" 1.817,806 $ 426,741 $ 547.999 See Independent auditor's report on the finanCial statements 62 Total NonmajDr Governmental Funds $ 317,297 725,637 1,125,022 6,250 6,620 72,293 2.253,119 1,616,170 153,730 288,275 35 135.000 161,744 529,401 2.884,355 [631.236J 547.389 [105,259] 442,130 [189,106J 2,981,652 $ 2,792,546 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2011 Business Special Improvement Neighborhood Parks & Special District Park Recreation Alcohol ASSETS Cash and investments $ 1,611 $ 229,134 $ 45,236 $ 4 Receivables Accounts 51,169 Total assets $ 52,780 $ 229,134 $ 45,236 $ 4 LIABiliTIES AND FUND BALANCES liabilities: Accounts payable $ 1,611 $ -$ -$ Due to other funds Total liabilities 1.611 Fund balance: Restncted 51,169 45,236 4 Committed 229.134 Assigned Total fund balance [deficit] 51,169 229.134 45.236 4 Total liabilities and fund balances $ 52.780 $ 229,134 $ 45.236 $ 4 Bicentennial HUD Comm. Sales Tax Center Community Development. Heritage Economic Event $ 98,847 $ $ 98.847 $ $ -$ 98,847 98,847 $ 98,847 $ Dev. Revolving Cotnmission Development 71,880 $ 173,160 $ 4 $ 957,112 71,880 $ 173,160 $ 4 $ 957,112 -$ -$ -$ 71,880 173,160 4 907,112 50.000 71,880 173,160 4 957,112 71.880 $ 173.160 $ 4 $ 957.112 See independent auditor's report on the financial statements 63 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) December 31,2011 Special Fair CDBG HOME Law Housing ED Y.. Enforcement ASSETS Cash and investments $ 5,181 $ 2,472 $ -$ 2,855 Receivables Accounts Total assets $ 5,181 $ 2,472 $ -5) 2,855 LIABiliTIES AND FUND BALANCES Liabilities: Accounts payable $ 825 $ -$ -$ Due to other funds Total liabilities 825 Fund balance Restricted 2,472 Committed 4,356 2,855 Assigned Total fund balance [deficit] 4,356 2,472 2,855 Total liabilities and fund balances $ 5,181 $ 2.472 $ -5) 2,855 $ S; $ $ Police Grants -$ -$ 2,012 $ 8,709 10,721 [10.721 J 11O,721J -S; War DARE Memorial Arts & Donations Maintenance Humanities 1,742 $ 35.262 $ 165,551 $ 1,742 $ 35,262 $ 165,551 $ -$ -$ 9,591 $ 9,591 1,742 35.262 155.960 1,742 35,262 155,960 1,742 S; 35.262 $ 165,551 $ Federal CARE Grant -$ -$ -$ 666 666 [666J r666J -$ Totals 1,790,051 51.169 1,841,220 14,039 9,375 23,414 343,255 1,424,551 50,000 1,817,806 1,841,220 See independent auditor's report on the financial statements 64 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31,2011 Business Special Improvement Neighborhood Parks & Special District Park Recreation Alcohol Revenues Taxes $ -$ -$ -$ Intergovernmental 153,566 153,566 Charges for services 83,467 Licenses and permits 6,250 Investment revenue 20 629 220 24 Miscellaneous 1.373 Total Revenues 83,487 6,879 155,159 153,590 Expenditures Current Culture and recreation Public health and sanitation 153,730 Planning and development 84531 Debt service Pnncipal retirement 25,000 Interest and other charges 4.399 Capital outlay 99.817 Total Expenditures 84,531 129,216 153,730 Excess [defiCiency] of revenues over [under] expenditures [1,044] 6.879 25.943 [140] Other financing sources [uses] Transfers In Transfers [out] [47.228] Total other finanCing sources [usesJ [47.228] Net change In fund balance [1.044J 6.879 [21,285] [140J Fund balance, beginning of year 52,213 222,255 66.521 144 Fund balance. end of year $ 51.169 $ 229.134 $ 45.236 $ 4 Bicentennial Center Event $ -663,839 663,839 670,411 670.411 [6,572J [6,572J 105419 s: 98.847 HUD Community Community Development Development Revolving $ -$ -200 526 200 526 200 526 [58.031 J [58.0311 200 [57,505] 71,680 230.665 3) 71.880 3) 173.160 Heritage Commission $ -4 S; 4 Sales Tax Economic Development $ $ 317,297 2.485 319,782 406.075 406,075 [86.293) [86.293] 1.043,405 957.112 See independent auditor's report on the financial statements. 65 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31. 2011 Special Fair CDBG HOME Law Housing ED 'Y Enforcement Revenues Taxes $ -$ -$ -$ Intergovernmental 31,203 158,238 Charges for services Licenses and permits Investment revenue 59 36 Miscellaneous Total Revenues 31,262 158,238 36 Expenditures Current Culture and recreation Public health and sanitation Planning and development 69,571 133,437 Debt service Principal retirement Interest and other charges Capital outlay 18,132 Total Expenditures 69,571 133.437 18.132 Excess [deficiency) of revenues over [under) expenditures [38,309) 24.801 [18,096) Other financing sources [uses] Transfers In 58.031 Transfers [out] Total other financing sources [uses] 58,031 Net change In fund balance [38.309J 24,801 58.031 [18.096] Fund balance, begInning of yeal' 42.665 [22,329) [58,031) 20,951 Fund balance end of year S 4,356 $ 2.472 S S 2,855 Police Grants $ -$ 5.377 5.377 [5,377] [5.377j [5,344j $ r10,721) cc· War Federal DARE Memorial Arts & Care Donations Maintenance Humanities Grant Totals -$ -$ -$ -$ 317,297 23,482 520,055 368,607 1,115,913 6.250 c:, v 101 1,089 5,394 70 70,850 72,293 75 101 464,028 2,037,202 797 944.962 1.616,170 153.730 70 666 288,275 25.000 4,399 529.401 70 797 944.962 666 2.616,975 5 [696] [480.934] [666] [579,773) 489,358 547,389 [105,259J 489.358 442.130 5 [696j 8,424 [666J [~ 37,643] 'i .737 35,956 147,536 1,955.449 1.742 $ 35.262 $ 155.960 $ [6661 $ 1.817.806 See independent auditor's report on the financial statements. 66 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NON MAJOR PERMANENT FUNDS December 31, 2011 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Cash and investments $ 419,040 $ 1,997 $ 5,704 Total assets $ 419,040 $ 1,997 $ 5,704 LIABILITIES AND FUND BALANCES liabilities Accounts payable $ $ -$ -Total liabilities Fund balances Committed 419.040 1,997 5.704 Total liabilities and fund balances $ 419.040 3) 1,997 3) 5,704 See independent auditor's report on the financial statements. 67 Total $ 426.741 $ 426,741 $ 426.741 $ 426.741 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON MAJOR PERMANENT FUNDS For the Year Ended December 31,2011 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 9,109 $ -$ Investment revenue 1,155 6 Total revenues 10,264 6 Expenditures Miscellaneous ':It:; vV Total expenditures 35 Net change In fund balance 10,229 6 Fund balances -beginning of year 408.811 1.991 Fund balances -end of year $ 419.040 $ 1.997 $ See Independent auditor's report on the financial statements. 68 -16 16 16 5,688 5.704 Total $ 9,109 1,177 10,286 35 35 10,251 416.490 $ 426,741 Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT CITY FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Final Charges for services Variance with Final Budget Positive [Negative] Community and economic development $ 84,511 $ 90,000 $ 90.000. $ [5,489) Interest income General interest Total revenues Expenditures Community Development Business Improvement District Total expenditures Excess [deficiency) of revenues over [under) expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 3'1 Reconciliation to GAAP Accounts receivable GAAP Fund Balance, December 31 $ 20 500 84,531 90,500 84,531 90.578 84,531 90,578 [78) 78 51.169 51.169 See independent auditor's report on the financial statements. 69 500 r4801 90.500 [5,969J 90.578 6.047 90,578 6.047 [78] 78 78 [78) Revenues Charges for services Public works Interest income General interest Total revenues Expenditures Cash reserve Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES Ir\j FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) NEIGHBORHOOD PARK FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Origmal Final $ 6,250 $ 20,000 $ 20,000 629 4,000 4,000 6,879 24.000 24.000 258,146 258,146 258,146 258,146 Excess [deflciencyJ of revenues over [under] expenditures 6.879 [234 146] Unreserved fund balance. January 1 222.255 234146 Unreserved fund balance/GAAP fund baiance December 31 $ 229.13.1 $ -$ See Independent auditor's report on the financial statements. 70 [234.146J 234,146 -Variance with Final Budget ' Positive [Negative] $ [13,750J [3,371] [17,121] 258,146 258,146 241,025 [11.891J $ 229,134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2011 Budaeted Amounts Actual Original Revenues Operating grants, restricted Culture and recreation $ 154,939 $ 160,000 $ Interest income General interest 220 4.000 Total revenues 155,159 164,000 Expenditures Debt Service Pnnclpal 25.000 10.000 Interest and other charges 4,399 Capital Outlay 93.481 100,000 Cash Reserve 131.197 Total expenditures 122.880 241.197 Excess [deficiency] of revenues over [under] expenditures 32.279 [77,197) Other financing sources [uses) Transfer [out] [47.228) [30.000] Total other finanCing sources [uses] [47,228] [30,000J Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [14.949] [107197] Unreserved fund balance, January 1 60.185 107,197 Unreserved fund balance/GAAP fund balance December 31 $ 45.236 $ -$ See Independent auditor's report on the financial statements. 71 Final 160.000 4.000 164,000 10.000 100.000 131,197 241.197 [77.197] [30.000) [30.000] [10719T: 107.197 -Variance with Final Budget Positive [Negative] $ [5,061] [3,780) [8,841] [15.000] [4.399] 6.519 131.197 118.317 109,476 [17.228J [17.228] 92.248 [47.012) $ 45.236 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31,2011 Budaeted Amounts Actual Original Revenues Operating grants, restricted Health and sanitation $ 153,566 $ 160,000 $ Interest income General interest 24 Total revenues 153.590 160,000 Expenditures Public Health and Sanitation Special alcohol 153,730 170,192 Total expenditures 153,730 170.192 Excess [defiCiency] of revenues over [under] expenditures [140] [10.192J . Unreserved fund balance, January 1 144 10 192 Unreserved fund balance/GAAP fund balance December 31 $ 4 $ -$ See independent auditor's report on the financial statements 72 Final 160,000 160,000 170,192 170 192 [10,192J 10,192 -Vanance with Final Budget Positive [Negative] $ [6,434] 24 [6.41 OJ 16,462 16,462 10.052 [10.048J $ 4 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales tax $ 317,297 $ 315,120 $ Interest Income General interest 2,485 10,000 Total revenues 319,782 325,120 Expenditures Community Development Economic development 456,075 315,444 Cash Reserve 9,676 Total expenditures 456.075 325 120 Excess [deficiency) of revenues over [under) expenditures [136.293) Unreserved fund balance, January 1 1.043.405 Unreserved fund balance, December 31 907,112 $ -$ Reconciliation to GAAP Current year encumbrances 50.000 GAAP Fund Balance, December 31 S; 957 112 See independent auditor's report on the financial statements. 73 315,120 10,000 325,120 315,444 9,676 325.120 -Variance with Final Budget Positive [Negativel $ 2.177 [7,515) [5,338) [140,631) 9.676 [130,955) [136.293J 1.043.405 $ 907.112 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) FAIR HOUSING FUND For the Year Ended December 31. 2011 Budgeted Amounts Actual Original Revenues Operating grants, restricted Community and economic development $ 31,203 $ 65,000 $ Interest Income General interest 59 1,000 Total revenues 31,262 66.000 Expenditures Community Development Human relations 69,571 86,290 TOlai expenditures 69.571 86.290 Excess [defiCiency] of revenues over [under] expenditures [38,309] [20.290J Unreserved fund balance, January 1 42.665 20.290 Unreserved fund balance/GAAP fund balance December 31 8) 4.356 $ -$ See independent auditor's report on the finanCial statements. 74 Final 65,000 1,000 66.000 86,290 86.290 [20,290] 20.290 -Variance with Final Budget Positive [Negative] $ [33,797] [941] [34.738] 16.719 16.719 [18.019] 22,375 $ 4.356 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Charges for services Culture and recreation $ 439,106 $ 371,904 $ 371,904 Operating grants. unrestricted Culture and recreation 23,482 18,000 18,000 Interest income General interest 1,089 2,000 2,000 Miscellaneous revenues Culture and recreation 350 20,095 20,095 Total revenues 464.027 411.999 411.999 Expenditures Culture and Recreation Arts and humanities 574,704 579.804 579.804 Smoky Hill River Festival 364.071 365.200 365,200 Capital Outlay 6,186 7,000 7,000 Cash Reserve 98,787 98,787 Total expenditures 944.961 1.050,791 1.050,791 Excess [deflciencyJ of revenues over [underJ expenditures [480,934] [638,792J [638,792J Other financing sources [uses] Transfer In 489.358 489.358 489,358 Total other financing sources [uses] 489.358 489.358 489.358 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 8,424 [149,434] [149,434] Unreserved fund balance, January 1 147,536 149.434 149.434 Unreserved fund balance/GAAP fund balance December 31 $ 155.960 $ -$ -See independent auditor's report on the financial statements. 75 Variance with Final Budget Positive [Negative] $ 67,202 5,482 [911J [19,745J 52,028 5,100 1.129 814 98.787 105.830 157.858 157,858 [1.898] $ 155.960 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31,2011 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 2,723,262 $ 2,595,524 $ 2,595,524 Delinquent taxes 55,583 40,000 40,000 Motor vehicle taxes 205,866 268,955 268,955 Total taxes 2,984,711 2.904,479 2.904479 Charges for services SpeCial assessments 1.535,487 1.349.311 1.349.311 Interest income General Interest 5,131 10,000 10,000 Miscellaneous revenues General miscellaneous revenues 12.983 140.000 140,000 Other finanCing sources General sources 230,131 Total revenues 4.768,443 4403.790 4,403.790 Expenditures Debt Service Pnnclpal 4,276,195 4,631,079 4.631,079 Interest and other Charges 1,771,580 1,833,997 1.833,997 Cash Reserve 403.283 403.283 Total expenditures 6.047.775 6.868,359 6,868.359 Excess [defiCiency) of revenues over [under] expenditures r1.279.332] f2,464,569i r2,464,569J Other financing sources [uses) Transfer In 2.026,973 1,800000 1.800000 Transfer [out) [83.488"1 Total otherflnanclng sources [uses] 1,943485 1,800000 1,800,000 Excess [defiCiency] of revenues and other sources over [under] expenditures and other [uses] 66<1,153 [664.569] [664,569J Unreserved fund balance, Januarj1 571,873 664,569 664.569 Unreserved fund balance!GAAP fund balance December 31 1,236,026 $ -(l' '" -Reconciliation to GAAP Taxes receivable 2.441,349 Deferred revenue [2,392,245] GAAP Fund Balance, December 31 $ 1.285,130 See independent auditor's report on the financial statements. 76 Variance with Final Budget Positive rNeaative] $ 127,738 15,583 [63,089J 80,232 186,176 [4,869) [127,017] 230,131 364.653 354,884 62417 403.283 820,584 1 185.237 226,973 [83.488) 143,485 1,328,722 [92,696) 53 1.236.026 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Orialnal Revenues Charges for services Health and sanitation $ 2,494,710 $ 2,107,000 Interest Income General interest 7,000 7,000 Interfund services provided Health and sanitation 453,672 505,300 Miscellaneous revenues Health and sanitation 24,491 42,310 Total revenues 2,979,873 2,661,610 Expenditures Public Health and Sanitation Solid waste 1,746,122 2,033.262 Hazardous waste disposal 80.517 94.032 Total public health and sanitation 1,826,639 2,127,294 Debt Service Principal 388,198 324,396 Interest 32,000 106.975 Total debt service 420.198 431,371 Capital Outlay 359,515 467.200 Cash Reserve 1.825,201 Total expenditures 2.606.352 4851.066 Excess [deficiency] of revenues over [under] expenditures 373.521 [2,189,4561 Other finanCing sources [uses! Transfers [out] [48.089J Total other finanCing sources [uses] [48.089] Excess [deficlencyJ of revenues and other sources over [under] expenditures and other [uses] 325,432 [2189,456J Unreserved fund balances. January 1 2,490,536 2,189,456 Prior year canceiied encumbrances 8,609 Unreserved fund balances, December 31 $ 2.824.577 $ -See independent auditor's report on the financial statements. 77 Final $ 2,107,000 7,000 505,300 42,310 2,661,610 2,033,262 94,032 2,127,294 324,396 106,975 431.371 467.200 1,825.201 4.851,066 [2.1 89.456) [2,189,456J 2,189,456 $ -Variance with Final Budget Positive [Negative] $ 387,710 [51,628] [17,819J 318,263 287,140 13.515 300655 [63,802] 74,975 11,173 107,685 1.825.201 2.244,714 2.562,977 [48.089) [48.089) 2,514,888 301,080 8,609 $ 2,824,577 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Revenues Charges for services Water and wastewater $ 17,266.856 $ 16.321,884 Interest income General Interest 26993 25.000 Operating grants, restricted Water and wastewater 201.700 Interfund services provided General services 28,061 30,900 Water and wastewater 95,097 Total Interfund services 123 158 30.900 Miscellaneous revenues General miscellaneous revenues 88 Water and wastewater 489,629 260,000 Tmal miscellaneous revenues 489,717 260.000 Total revenues 18,108,424 16.637,784 Expenditures Water and Wastewater Water 10.153.314 9.029.002 Sewer 2.705,205 2784,556 Total water and wastewater 12,858,519 11,813.558 Capital Outlay 3.976.377 1.877.350 Cash Reserve 6.497,105 Total expenditures 16,834.896 20,188.013 Excess [deficiency} of revenues over [under} expenditures 1.273528 [3.550.229J Other financing sources [uses) Transfers [out] fl.005,352; [3.804546J Total other finanCing sources [uses] [1,005,352] [3,804,546) Excess [deficiency] of revenues and other sources over [underJ expenditures and other [uses] 268,176 [7,354775] Unreserved fund balances, january 1 9,699,890 7,354,775 Pnor year cancelled encumbrances 20.388 Unreserved fund balances, December 31 $ 9.988,454 $ -See Independent auditor's report on the financial statements 78 Final $ 16.321.884 25.000 30,900 30.900 260,000 260.000 16,637,784 9,029.002 2.784.556 11.813,558 1,877,350 6,497,105 20,188,013 [3.550.229: [3.804.546; [3.804546] [7,354,775] 9,699,890 $ 2,345,115 Variance with Final Budget Positive INegative] $ 944,972 1,993 201,700 [2,839] 95.097 92,258 88 229,629 229.717 1470.640 [1,124,312] 79,351 [1,044,961) [2.099,027] 6497105 3,353,117 4 823,757 2799,190:: 2,799,194 7,622.951 20,388 $ 7,643.339 Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31.2011 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Health and sanitation $ 2,342,291 $ 2,316,885 $ 2,316,885 $ 25,406 Interest income General interest Charges for services Miscellaneous revenues Total revenues Expenditures Public Health and Sanitation Sanitation Capital Outlay Cash Reserve Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balances, December 31 1,839 424 2,344.554 2,179.431 132.110 2.311.541 33,013 581,811 $ 614.824 3,500 3,500 2,320.385 2,320,385 2,163,312 2.163.312 158,000 158.000 525,425 525,425 2.846.737 2.846,737 [526,352j [526.352] 526,352 526.352 $ -$ -See independent auditor's report on the financial statements. 79 [1,661] 424 24,169 [16,119] 25.890 525.425 535.196 559,365 55,459 $ 614,824 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31.2011 Budgeted Amounts Actual Original Revenues Charges for services Culture and recreation $ 636,202 $ 777,500 $ Interest income General interest 36 200 Miscellaneous revenues General miscellaneous revenues 1,562 1,000 Culture and recreation 48,618 40,000 Total miscellaneous revenues 50.180 41,000 Total revenues 686,418 818.700 Expenditures Culture and Recreation Golf course 760.384 752.160 Debt Service 15.724 16,000 Cash Reserve 173,493 Total expenditures 776.108 941.653 Excess [deficiency) of revenues over [under] expenditures [89.690] [122.953) Other finanCing sources [uses] Transfers In 47,228 Total other finanCing sources [uses] 47,228 Excess [defiCiency] of revenues and other sources over [under] expenditures and other [uses] (42,462] [122,953] Unreserved fund balances, January 1 43,462 122.953 Unreserved fund balances, December 31 $ 1.000 $ -$ See independent auditor's report on the financial statements. 80 Final 777,500 200 1,000 40.000 41,000 818.700 752,160 16.000 173.493 941.653 [122.953J [122,953] 122,953 -Variance with Final Budget Positive [Neaative] $ [141,298) [164) 562 8.618 9,180 [132.282) [8.224] 276 173.493 165.545 33.263 47.228 47.228 80.491 [79,4911 $ 1,000 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) RISK MANAGEMENT FUND For the Year Ended December 31,2011 Revenues Interest income General interest Interfund services provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Risk management Capital Outlay Cash Reserve Total expenditures Excess [deficiency) of revenues over [under] expenditures Unreserved fund balance, January! Actual $ -374,708 176,298 551.006 532.771 138 532,909 18.097 49.848 Budgeted Amounts Original Final $ 1,400 $ -374,708 374,708 40,200 177,500 416,308 552,208 424,651 549.000 1,000 1,000 74.037 499,688 550,000 [83.380J 2,208 83.380 49.847 Variance with Final Budget Positive [Negative] $ (1,202J [1,202J 16,229 862 17,091 15,889 Unreserved fund balance. December 31 $ 67.945 ,;:;..$ ___-$ 52,055 .:;.$ _1_ 5_.8_9_0 See independent auditor's report on the financial statements. 81 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND Revenues Interest income General interest Interfund services provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Worker's compensation Cash Reserve Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance. January 1 For the Year Ended December 31, 2011 Budgeted Amounts Actual Original Final 1,937 $ 2,500 $ 2.500 229.452 229.435 229.435 1.444 232.833 231.935 231,935 334.210 297,762 297.762 638.936 638.936 334.210 936,698 936.698 [101,377] [704.763] [704,763) 621.629 704.763 704.763 Variance with Final Budget Positive [Negative) $ [563] 17 1,444 898 [36,448] 638.936 602.488 603,386 [83.134) Unreserved fund balance. December 31 520,252 ~$ ~~~~-~$ ~~~=-,;:;,$=,.,;5;,;;2;,;;0,;;;.2;,;;5.;;;,2 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEALTH INSURANCE FUND For the Year Ended December 31, 2011 Revenues Interest income General Interest Interfund Services Provided General services Miscellaneous revenues General miscellaneous revenues Total revenues Expenditures Other Health insurance Cash Reserve Total expenditures Excess [deficiencyJ of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 Actual $ 4,904 6,304,144 52.285 6.361.333 5.947,148 5,947,148 414,185 1.501,522 $ 1,915.707 Budgeted Amounts Original Final $ 5,000 $ 5,000 6,620,000 6,620.000 6.625.000 6,625.000 6.913.677 6,913.677 1.503.185 1.503.185 8,416.862 8,416,862 [1.791.862J [1,791.862J 1,791,862 1.791.862 $ -$ -See independent auditor's report on the financial statements. 83 Variance with Final Budget Positive [Negative] $ [96] [315,856J 52.285 [263,667) 966.529 1,503,185 2.469.714 2,206.047 [290.340] $ 1,915.707 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31.2011 Revenues Interest income General Interest Interfund services prOVided General services Miscellaneous revenues General miscellaneous revenues Total revenues Exoendltures Other Ce-ntral garage Capital Outlay Cash Reserve Totai expenditures Excess [defiCiency] of revenues over [under] expenditures Other finanCing sources [uses] Transfers In ~xcess [defiCiency] of revenues and other finanCing sources over [unde,: expenditures and other financing [uses~ Unreserved fund balance, January i Actual 423 1,629,328 22,298 1,652.049 1.697.373 4.49E 1.701,868 [49.819j 60.000 80 ()A r, ::J.O I:::; Budgeted Amounts Original Final $ 4,000 c:: "' 4,000 1,490.000 1,485,942 4.000 138,058 1,498000 1.628.000 1.454.727 1.716.068 250 161.091 1.616.068 1.716068 [118068J [88.068] 30.000 [88.068; [88.068J 88,068 89,88S Variance with Final Budget $ Positive [Negative) [3,577] 143,386 [115.760] 24.049 18,695 [4,495] 14,200 38.249 60.000 98,249 r"7nl I' VJ Unreserved fund balance, December 31 100.000 ;;..$ __ _ 1 ,82 1 ;:;.$ ==9=8=.1=7=9 See independent auditor's report on the finanCial statements. 84 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) INFORMATION SYSTEMS FUND For the Year Ended December 31. 2011 Budgeted Amounts Actual Onginal Final Revenues Charges for services General charges $ 106,305 $ 106,000 $ 106,000 Interest income General interest 1,182 500 500 Interfund services provided General services 1,237,220 1.258,760 1,258,760 Miscellaneous revenues General miscellaneous revenues 2.889 2.889 Total revenues 1,344.707 1.368,149 1.368.149 Expenditures Other Information services 1,162.756 977,978 977,978 Capital Outlay 113,789 351,000 351.000 Cash Reserve 105.703 105,703 Total expenditures 1.276.545 1,434.681 1,434.681 Excess [deficiency) of revenues over [under] expenditures 68,162 [66,532] [66,532] Unreserved fund balance, January 1 91,838 66.532 66.532 Unreserved fund balance, December 31 $ 160.000 $ -$ -See independent auditor's report on the financial statements. 85 Variance with Final Budget Positive [Negative] $ 305 682 [21,540] [2,889) [23.442] [184.778) 237.211 105.703 158.136 134.694 25,306 $ 160,000 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Risk management fund -To account for the accumulation and allocation of costs associated with risk management activities and the purchase of various forms of insurance. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. Information services fund -To account for the accumulation and allocation of costs associated with electroniC data processing. 86 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2011 Workers' Risk Compensation Health ASSETS Management Reserve Insurance Current assets: Cash and Investments $ 171,559 $ 649,238 $ 1,916,207 Inventory and prepaid supplies Total current assets 171.559 649,238 1,916.207 Capital assets Capital assets Less. accumulated depreciation Total capital assets Total assets $ 171.559 5, 649,238 $ 1.916.207 liabilities Current liabilities (payable from current assets) Accounts payable £; 7.351 S, S; 500 Current portion of compensated absences payable Current portion of accrued claims payable 172.545 391.175 Total current liabilities (payable from current assets) 7.351 172.545 391 675 Noncurrent liabilities Compensated absences pavable Accrued claims payable 149.245 Total noncurrent liabilities 149.245 Total liabilities S 7.351 s: 321.790 $ 391.675 Net Assets Invested In capital assets, net of related debt s: $ $ Unrestricted 164.208 327448 1.524.532 Total net asset" $ 164.208 S; 327448 S; 1.524 532 See Independent audltor's report on the finanCial statements 87 Total Internal Central Information Service Garage Systems Funds $ 150,383 $ 201,820 $ 3,089,207 115,694 115,694 266,077 201.820 3.204,901 189.424 677.214 866,638 161.634 677.214 838.848 27,790 27,790 $ 293.867 $ 201,820 $ 3.232.691 S; 50.383 $ 41.820 Si 100.054 7.075 10,309 17.384 563.720 57458 52129 681.158 30.500 44,440 74.940 149245 30.500 M.440 224 185 s: 87.958 S 96.569 Si 905.342 Si 27,790 $ $ 27.790 178 119 105.251 2.299.558 $ 205.909 $ 105.251 S; 2.327 348 CITY OF SALINA. KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUND For the Year Ended December 31. 2011 Workers' Risk Compensation Health Central Management Reserve Insurance Garage Operating revenues Charges for services $ 374,708 $ 229,451 $ 6,304,144 $ 1,629,328 Miscellaneous 176.298 1.444 52,285 21,169 Total operatmg revenues 551.006 230.895 6.356.429 1.650497 Operabng expenses General government 436.645 230417 5.955.821 1.710.911 Depreciation 4,698 Total operating expenses 436,645 230417 5,955.821 1.715.609 Operating mcorne [lossJ 114.361 478 400.608 [65112) Other operating revenues [expensesJ Investment Income 1.937 4.904 423 Total other operatmg revenues [expensesJ 1.937 4.904 423 Nonoperating revenues [expensesJ Gam/[Ioss] on disposal of fixed assets 1.129 Total nonoperatmg revenues [expenses] 1 12g Income [loss] before transfers 114.361 2.415 405.512 [63.560J Transfers from [to} other funas Transfers In 60.000 Total transfers 60.000 Change in net assets 114.361 2415 405.512 [3.560) Net assets January ~ 49847 325.032 I 119.02[; 205887 Restatement 3582 Net assets January 1 restated 49.847 325.033 1. '19,020 209469 i~et assets Decembe: 3' ~ 1SUOS ~. 327442 1 524 532 205909 See Independent auditor's report on the financial statements 88 Total Internal Information Service S~stems Funds $ 1,343.525 $ 9.881,156 251.196 1.343,525 10,132,352 1.277.484 9.611,278 4,698 1.277.484 9.615.976 66.041 516.376 1 182 8446 1 182 8446 1.129 1.129 67.223 525.951 60000 60,000 67,223 585.951 38028 1 737.8E 3582 38.028 1741.397 £, 105.25 -: ~. 2.327348 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2011 Workers' Risk Compensation Health Management Reserve Insurance Cash flows from operating actlvltJes Cash received from customers and users $ 374.708 $ 125.659 $ 6.312.817 Cash paid to suppliers of goods or services [440,965] [230,417J [5,955.771J Cash paid to employees Other operating receipts 176.298 1,444 52.285 Net cash provided by [used InJ operating activities 110.041 [103.314J 409.331 Cash flows from capital and related financing activities Proceeds from sale of capital assets Cash flows from investing activities Interest received 1,937 4.904 Cash flows from noncapital finanCing activities Transfers In Net Increase [decreaseJ In cash and cash eqUivalents 110,041 [101,377J 414.235 Cash and cash eqUivalents, January 1 61.518 750.615 1,501,972 Cash and cash eqUivalents. December 31 $ 171.559 649,238 $1916.207 See Independent auditor's report on the financial statements 89 Total Internal Central Information Service Garaoe Services Funds $ 1.629.329 $1.343,525 $ 9.786.038 [1.462.573J [866,093J [8,955,819J [230.042J [401.446J [631,488J 21,169 251.196 [42,117) 75.986 449.927 1.129 1,129 422 1.182 8445 60.000 60.000 19.434 77,168 519.501 130,949 124,652 2.569,706 $ 150.383 $ 201.820 $ 3.089.207 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31,2011 Reconciliation of operating [loss] Income to net cash prOVided by [used In] operating activities Workers' Risk Compensation Health Manaqement Reserve Insurance Total Internal Central Information Service Garaqe Services Funds Operating Income [loss] $ 114,361 $ 478 $ 400,608 $ [65,112] $ 66,041 $ 516.376 Adjustments to reconcile operating Income [loss] to net cash prOVided by [used In] operating activities Depreciation expense [Increase] decrease In Inventory Increase [decrease] In accounts payable Increase [decrease] In accruea compensatea absences Increase [decrease] In claims payable Net cash proVided by [used In] operating activities [4.320J S 110.041 50 [103792) 8,673 $ [103.314) $ 409,331 See Independent auditor's report on the financial statements 90 4,698 4.698 6,646 6,646 9,296 9,006 14032 2,355 939 3,29," [95,119] $ 142117) $ 75.986 $ 449,927 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special /assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. PEGS access agency fund -To account for revenues collected on behalf of the community access television system for public, educational and governmental programming. Payroll clearing agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use In investigations Fire cam agency fund -To account for donations received and used for fire equipment Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. 91 Special Assessment Escrow ASSETS Cash and Investments $ 135344 Total assets S 135,344 LIABILITIES Accounts payable $ 135.344 Total liabilities $ 135.344 CITY OF SALINA. KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December 31,2011 Fire Court Police insurance PEGS Payroll Bond and Investigation Fire Proceeds Access Clearing Restitution Account Cam $ 10.316 $5103 :,) [251 057) $ 70.921 $ 2.125 $783 S 10.316 S 5103 $ [251.05D $ 70,921 $ 2.125 $783 $ 10.316 $ 5103 $ [251.05rJ $ 70.921 $ 2,125 $783 $ 10.316 !§J.Ql $ [251,057) $ 70,921 $ 2.125 $ 783 See Independent auditor's report on the financial statements 92 Section 125 Cltlzenshll2 Plan Totals $ 3.702 :,) 336,063 $ 313 300 S; 3702 $ 336.063 $313.300 $ 3,702 $ 336.063 $ 313,300 $ 3702 $ 336,063 $313.300 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2011 Balance December 31, 2010 Additions Deductions Cash and investments Special Assessment Escrow $ 328,828 $ 5,336 $ Fire Insurance Proceeds 5,062 41,952 PEGS Access 5,071 285,273 Payroll Clearing [246,521] Court Bond and Restitution 74,831 Police Investigation Account 2,307 Fire Cam Fund 780 3 Citizenship Trust 3,692 10 Section 125 Plan Fund 339,549 349,775 Total Assets $ 513.599 $ 682,349 $ Accounts Payable Special Assessment Escrow S, 328,828 $ 5.336 $ Fire Insurance Proceeds 5.062 41,952 PEGS Access 5.071 285.273 Payroll Clearing [246,521] Court Bond and Restitution 74.831 Police Investigation Account 2.307 Fire Cam Fund 780 3 Citizenship Trust 3,692 10 Section 125 Plan Fund 339.549 349.775 Total liabilities $ 513.599 $ 682.349 $ See independent auditor's report on the financial statements. 93 198,820 36.698 285,241 4,536 3,910 182 353,261 882,648 198,820 36,698 285.241 4,536 3,910 182 353,261 882,648 Balance December 31, 2011 $ 135,344 10,316 5,103 [251,057] 70,921 2,125 783 3,702 336,063 $ 313.300 $ 135.344 10.316 5.103 [251.057] 70.921 2.125 783 3,702 336.063 $ 313.300 12-0130 12-0131 12-0132 12-0133 12-0135 CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 11,2012 4:00p.m. The City Commission convened at 3:00 p.m. in a Study Session on Budgetary Goals. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Norman M. Jennings, Presiding Officer; Commissioner Samantha P. Angell; Commissioner Kaye J. Crawford; Commissioner Aaron Householter; Commissioner Barb Shirley ADMINISTRA nON (8.3) General Obligation Bonds and Temporary Notes (8.3a) (8.3b) (8.3c) (8.3d) Resolution No. 12-6909 formalizing and adopting a Tax and Securities Compliance Procedure. Resolution No. 12-6910 authorizing the offering for public sale of general obligation temporary notes and bonds. First reading Ordinance No. 12-10642 authorizing the issuance and delivery of general obligation bonds, Series 2012-A. First reading Ordinance No. 12-10644 authorizing the issuance and delivery of general obligation bonds, Series 2012-B. Moved by Commissioner Angell, seconded by Commissioner Crawford, to adopt Resolution No. 12-6909. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Angell, seconded by Commissioner Shirley, to adopt Resolution No. 12-6910. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Angell, seconded by Commissioner Crawford, to pass Ordinance No. 12-10642 on first reading. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Angell, seconded by Commissioner Shirley, to pass Ordinance No. 12-10644 on first reading. Aye: (5). Nay: (0). Motion carried. ADJOURNMENT Moved by Commissioner Householter, seconded by Commissioner Shirley, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 5:50 p.m. [SEAL] ATTEST: 1)(/L £.et,v A vtA'V E4ey Lieu Ann Elsey, CMC, City Clerk bi NorVl'UNVtl lvI. ~ Norman M. Jennings, Mayor I hereby certify that the foregoing is a true correct excerpt of the action taken by the Governing Body at its regular meeting on June 11, 2012 regarding Resolution Numbers 12-6909 and 12-6910 and first reading of Ordinance Numbers 12-10642 and 12-10644. ~ Lieu Ann Elsey, City Clerk Page 1 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON JULY 9, 2012 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Norman M. Jennings, Mayor and Samantha Angell, Barb Shirley, Kaye Crawford and Aaron Householter, Commissioners. Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Finance Director reported that pursuant to the Notice of Bond Sale heretofore duly given, bids for the purchase of General Obligation Internal Improvement Bonds, Series 2012-A, dated July 15, 2012, of the City had been received. A tabulation of said bids is set forth as EXHIBIT A hereto. Thereupon, the governing body reviewed and considered the bids and it was found and determined that the bid of UMB Bank, N.A., Kansas City, Missouri, was the best bid for the Bonds, a copy of which is attached hereto as EXHIBIT B. Thereupon, there was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2012-A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Thereupon, Commissioner Angell moved that said Ordmance be passed. The motion was seconded by Commissioner Shirley. Said Ordinance, having been approved by a first reading on June 11, 2012, was duly read and considered, and upon being put, the motion for the passage of said Ordinance was carried by the vote of the governing body, the vote being as follows: Yea: Jennings, Angell, Crawford, Householter, Shirley. Nay: None. Thereupon, the Mayor declared said Ordinance duly passed and the Ordinance was then duly numbered Ordinance No. 12-10642 was signed and approved by the Mayor and attested by the Clerk and was directed to be published one time in the official newspaper of the City. Thereupon, there was presented a Resolution entitled: A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2012-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 12-10642 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. Thereupon, Commissioner Shirley moved that said Resolution be adopted. The motion was seconded by Commissioner Householter. Said Resolution was duly read and considered, and upon being put, the motion for the adoption of said Resolution was carried by the vote of the governing body, the vote being as follows: Yea: Jennings, Angell, Crawford, Householter, Shirley. Nay: None. Thereupon, the Mayor declared said Resolution duly adopted and the Resolution was then duly numbered Resolution No. 12-6917 and was signed by the Mayor and attested by the Clerk. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 On motion duly made, seconded and carried, the meeting thereupon adjourned. CERTIFICATE I hereby certifY that the foregoing Excerpt of Minutes is a true and correct excerpt of the proceedings of the governing body of the City of Salina, Kansas, held on the date stated therein, and that the official minutes of such proceedings are on file in my office. (SEAL) ~ (Signature Page to Excerpt of Minutes -July 9,2012 -Series A) EXHIBITA BID TABULATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS A-I PARITY Result Screen https:llwww.newissuehome.i-deal.com/Parity/asp/main.asp?frame=co ... 3:37:12 p.m. CDST Bid Results I of I Salina $2,365,000 General Obligation Internallmprovment Bonds, Series 2012-A The following bids were submitted using PARlriID and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC J!!ij UMB Bank NA 1.921919 Ill'] CountlY Club Bank 1.938006 Ill'lI Robert W. Baird & Co., Inc. 2.011439 J!!ij FTN Financial Caj2ital Markets 2.120770 ifill Hutchinson, Shockey, Erley & Co. 2.471669 *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. © 1981-2002 i-Oeal LLC, AU rights reserved, Trademarks 7112/2012 3:37 PM EXHIBITB BID OF PURCHASER B-1 PARITY Bid Form https:l!www.newissuehome.i-deal.comIParity/asp/main.asp?frame=co ... 10f2 UMB Bank N.A •• Kansas City, MO's Bid :.a~. mtrr~:·· .ur ......... ! .::-1 Salina $2,365,000 General Obligation Internallmprovment Bonds, Series 2012-A For the aggregate principal amount of $2,365,000.00, we will pay you $2,365,000.00, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount $ Coupon % Bond Insurance 10/01/2013 130M 1.0000 10/01/2014 140M 1.0000 10/01/2015 145M 1.2500 10/01/2016 150M 1.5000 10/01/2017 150M 1.5000 10/01/2018 155M 1.5000 10/01/2019 155M 1.5000 10/01/2020 155M 1.4000 10/01/2021 160M 1.6500 10/01/2022 160M 1.8500 10/01/2023 165M 2.0000 10/01/2024 170M 2.1000 10/01/2025 175M 2.2000 10/01/2026 175M 2.3500 10/01/2027 180M 2.4500 Total Interest Cost $392,234.44 Discount: $0.00 Net Interest Cost: $392,234.44 TIC: 1.921919 Total Insurance Premium: $0.00 Time Last Bid Received On:07/09/2012 12:49:03 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: UMB Bank NA, Kansas City, MO Contact: Kristin Koziol Title: VP Telephone:816-86Q. 7223 Fax: 816-843-4325 Issuer Name: Accepted By: Date: Company Name: UMB Bank, n. a . Date: _ ....7... ..1 _9'-'1"".1. .2 _____ 7/912012 1:59 PM ORDINANCE NO. 12-10642 OF THE CITY OF SALINA, KANSAS PASSED JULy 9, 2012 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A ItJ (PUBLISHED IN THE THE SALINA JOURNAL ON JULY --i1--' 2012) ORDINANCE NO. 12-10642 \ AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2012-A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a city of the fIrst class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to KS.A. 12-6a01 et seq., as amended, and other provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the City has caused the following improvements (the "Improvements") to be made in the City, to-wit: Project Description Magnolia Commons Ordinance No. Ord. 12-10633 Authority K.S.A. 12-6a01 et seq. Amount $ 3,031,529.78 WHEREAS, the governing body of the City is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, none of such general obligation bonds heretofore authorized have been issued and the City proposes to issue its general obligation bonds to pay a portion of the costs of the Improvements; and WHEREAS, the governing body of the City has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date awarded the sale of such Bonds to the best bidder. NOW,~ THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: . Section 1. Definitions of Words and Terms. In addition to words and terms defIned elsewhere herein, the following words and terms in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include fIrms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including KS.A. 10-101 to 10-125, inclusive, KS.A. 10-620 et seq., and KS.A. 12-6a01 et seq., all as amended and supplemented from time to time. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation, bonds. 1 "Bond Resolution" means the resolution to be adopted by the governing body of the City prescribing the terms and details of the Bonds and making covenants with respect thereto. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2012-A, dated July 15,2012, authorized by this Ordinance. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the City or, in the Clerk's absence, the duly appointed Deputy, Assistant or Acting Clerk. "Improvements" means the improvements referred to in the preamble to this Ordinance and any Substitute Improvements. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "Refunded Notes" means the Series 2011-1 Notes maturing on August 1,2012, in the aggregate principal amount of $3,400,000. "Series 2011-1 Notes" means the City's General Obligation Temporary Notes, Series 2011-1, dated July 15, 2011. "State" means the State of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City authorized in the manner set forth in the Bond Resolution. Section 2. Authorization of the Bonds. There shall be issued and hereby are authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series 2012-A, of the City in the principal amount of $2,365,000, for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) pay costs of issuance of the Bonds; and (c) retire the Refunded Notes. Section 3. Security for the Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance· of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 4. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed and subject to the provisions, covenants and agreements set forth in the Bond Resolution hereafter adopted by the governing body of the City. 2 Section 5. Levy and Collection of Annual Tax. The governing body of the City shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by levying and collecting the necessary taxes andlor assessments upon all of the taxable tangible property within the City in the manner provided by law. The taxes andlor asses~ments above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the general ad valorem taxes of the City are levied and collected, shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due and the fees and expenses of the Paying Agent. The proceeds derived from said taxes and/or assessments shall be deposited in the Bond and Interest Fund. If at any time said taxes andlor assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the City and to reimburse said general funds for money so expended when said taxes andlor assessments are collected. Section 6. Further Authority. The Mayor, Clerk and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confmned which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 7. Governing Law. This Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 8. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the governing body of the City, approval by the Mayor and publication in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 PASSED by the governing body of the City on July 9, 2012 and APPROVED AND SIGNED by the Mayor. (SEAL) ATTEST: Clerk [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Signature Page to Bond Ordinance -20 12-A) Publisher's Affidavit .I....... -"'C.Ab.. r.. . i..s.". "'ty-/---'Fui. .n.. u:k"--___~ . being d uly sworn declare that I am a T egal Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Salme County, Kansas, and of general circulahon in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and unmterruptedly publIshed for five consecutive years prior to first publication of attached notice, and that the Ordinance 12-10642 Notice has been correctly published in the entire issue of said newspaper one time, publication being given m the issue of July 14, 2012 Subscribed and sworn to before me, this _..,;;1_'...£.7_"1.__1 _ day of J' ,/'1 ~ 1,./I Printer's Fee ~6.00 I AD. 20 Public ~OTARY PUBLIC· Slate of Kansas ~ WENDY CHROBAK ~_~ My Ap;,! Exp,']d;z...::ZCll, "Bond Resolution" prior to thil matunty (Published in the Salina means the resolution to be . thereof, and shall be IS, JoOumRDal1NJ,uAlYc1 t 2N001•2) adopted by the govemlng sued and delivered in the N t: body of the City prE/serlb. manner prescribed and 12-10642 Ing the terms and details subject to the provisions, :~THO';>I~I~:i'A~~g onhe Bond!! and making ~o~~~a~~, I~'ft~rngrrhe" PSRUOANVICDEIN,GO!~FlETN.HEE.RAIS..-.... f~ei:ro~nts? Wlth,/espeet BdondtRdeSbolUtthlon he~eranftl.neg' c '" .' ".ijonds:" me.ans. the CI-a op e y . e govll OBLIGATloN INTERNAL ty's General Obligation In· body oUhe City. IM'PROYEMENT BoNDS terna.t Imp'rovement '5:119\160 57 ·bevy aod SERII:S'2012-A, c;>FTHE Bonds .. Serles 2012-A. Collection of .Annual CITY'OF SAL,INA 'KAN· dated 'JUly. IS, 2012; TlI>!. The governIng body SAS; PROVIDIN~: FoR authorl~Efd>bY this Ordl,· ·of the City shall annually THE . LEVY .. AND COL, nance. make provision for the ~E.~TION .. Qf .lIN AN! "c:1ty" me8J1$ the Glty·of· payment: of princlRal of, NUAL TA,lC FOR TiHE: Salina, Kansas.. premium, if. any, and interPURPOSE' OF PAYING '''Clerk'' means the duly est on the Bonds as the THE: PRINCIPAL OF AND appqloted and acting samel become due by INT!:RE'STON SAID Clerk of the City or, in the levying and collecting the BONOS AS THEY BE· Clerk's .absence, toe. duly necessary. taxes and/or COM!: DUE; AlITI:{OBIZ-ltd 0 t A I' assessmen n all of OTHER I\PPO n e.aP.u. y, 5S .5' the taxab.. Ie Ie .prop-'DN"GCUCMEERNT.fSINA-'N'D ·A··C·.: tIm!. or Ai:ting.Cle,li.:. . "'.. ""Improvemeots" means -erty.w,}hlr·1' In the nONS IN-CONNEC'FIQN' the jmJ'(rovements referred manM(Jp~ '.' law, THEREWITH,. AND MA/(-te,. In. :1I$e preamble tq: thiS rne taxes and!or·assess· ING CERTAIN .COVI:. Ordimince and any Substi-ments abol/e referred to NANTS'WITH'I'\ESPECT tute Improvements.. shall bE! extended upon THERETO. "Mayo:r" means the dull': the tax rolls In each of the WI:IEREAS, Ihe City of elected i\f).gactilJg Ml\ypr:' several years, respec· Salina. Kl\nsas \the "Crty") of the City or, IrHhll May-ttvely, apd,shall be levied fs !lOlty onhe irst clJl,SIl, or's absence, Ille duly:!W. and.collectad at the same duly creat~d, organize,d. p01nted andlor elected Qms1'. manand existi.ng unaer the Vice Mayar ior Aotlng Ileca.s V.I!' Constjl!Jllon and laws of MaYOGOfthe City. . Iorem are the state; and "Or(llnance" meansclhls. levIed shall WHEREAS, pursuant to Ordinance:iiufhortzin'!l the Playf· K.S.A. 12-6aOl et seq" as issuance of tlie Bonds. a amended, ana otoer provi· '''Refunded Notes' means e .onds siDnli of me laws of the the' Series 2Ql I-I Notes: !1~me be-State of Kans/l..s appr>ca· ma'urlng on August.:j the fees ble thereto, by. proceed -20ft,'Jn the aggre.gate .flnd expens?s of the PayIngs duly had, ~ha·llovem· [lnnclpal 'amollni of.' 1'1.9. Agent. ·The proceeds ing body of tha Cily has $3400 000.' ': . ,. de aid ,.axes caQsed' the fojlowiog 1m· "Series 2011-1. Notlls" '.'an snts shall: provaments (the "Improve· means the City's Genera:l be de the Bond ments') 19 be made 1(1 the Obligation Temporary. and In '. " d. City, to·wn: Notes, Series 201 Fl,' .,If at ao. ,~Ime said taxes Proklct De~rrlPntlaonnce No.' dated JUly '15, 201 (and/o s are v eIIt "Staten means the S~le .no.! c, e . to Authority of .Kensas. . pay the or'ln· Amount "Sublltltu1e Improve. terest on the Bonds when Magnolia Commons ments" means the substi. due, the Treasurer IS Ord. 12·.10633 Me or addltlonaLimprove. here~ authorJze9 and dl' K.$.A. 12-6aOl al seq. ments of the Clly .author-recte to pay said pnncl $ 3,031,529.78 Ized in the manner sel pal .or Interest out of the ; and lorth In the Bond Resolu-gener.al funds oLthe City WI:IEREAS, me govern·, tion. . and to reimburse said Ing body of the City is Section 2 Authorfza-general !)J~<!s for money au1horizedby law to fSsue tlonofttieBonds. Th.ere f~)(e~xg~~~~~s~~:snm!~i~ general obligation bonds shall be Issued and ar conected 01 the City to pay a portion hereby B'e authorized and ~ActJon .. /; Further of th.e costs of t.he 1m directed to. be r!!sued: the ,.".--,~--' provements; eod General Obligatlo@Inter. Authority. The Mayo~. WHEREAS none Of' Clerk ano other CIty offl' • . nal ImQrovement Bonds, lals are 'hereby' further ~~~~s g::r~i~o~bl~~~~~ Series 2012-A, of the City ~uthoi1zed and directed to ized have been Issued In the grtnClpel amo!.!n! a! execute imy·and all docuflod Ihe City proposeS to $[2,3.7 ,0001.' .for the pur ments ·and·takesuch ac· issue 'its general obligation pose of prOYldlOlj funds to, lions as 11)llY may deem bonds to' p'ay a ponion of (a) pay a portIon 01 the necessary o( advisable In I costs of the Improve" the costs 01 the mprove· ments' (b) pay costs of is-order to carry out and per· ments".and . ' . . form the purposes: of the . WHEREAS, the govern· 5uance of the Bonds, and Ordinance, and to make i0g body of. the. City hall (c) (eUre the ReJunded alteratlOQS, changes or ad· :'aQverllSect the sale 01 thll'. N8={~\'fa dltlO'ns' In tM foregOing ·.Bonds 10 accordam;e With -. . Security for agre,ef1le.r;tts; sjatemef1ts. the law and at a m"etlng the Bond". The Bonds Inst"umehts and othe, held in the CUy on this shall be general obllgl!' documents herein ap date awarded' the·sale-of lions of the City payable proved, authorized and SUQh . Bonds to the best. as to boli) prlnclpa! aod in-. confirmed whloh they may biNdOdIlWJ'bTH!:' REFO' REt'B.e..,, Iallslesests sInm pllnartst:'llreovmle ds puepcoianl atlopnp·r oovr et;a. kainngd othf es uecxhe cauc · IT OR AIKED BY HE: the:iilroperly .benefited'by tion shall be conclusive GOVERNING BOQ:Y OF . the'construetl0n of the 1m-evidllnce of such Mces· THE CITY QF ~A~INA, provement:; and, if not so sily or advisabifilv. KANSAS, AS FOLLOWS: paid, from ad valorem.· lWt\l.2!:LZ. Governing "s!!~Q!!.1 Def.lnl~lons t8)<es which may be tevled Law. This Ordinance and of WO.r.ds and Terms. In wlthQut limitation as to the Bonds shall be gov additlon to. words and . rate or amount upon all eroed exclusively by and terms defined elsewhere the taxable tangible prop· construed In accordance J1er .. tn, the ·foJ1owlng erty, real anq personjll, wlthJhe applicable laws of wprds aM terms tn this wltnln th.e temtorlal hf1llw . th.e ..S tjlje. {)ldlnanCe', shalr'have, the' 0.1 the -Pity. The balance eection 8. . Effective meanings herelnaflift set of the oprlnclpaland lnler· Data. 'thIs . Ordinance forth. Unless :the context est onthe'BOItds Is pay, shall take effect and be In shall o'tnerwlse indicate, able from ad vlllor~m lull force from·and after Its words Impo(!ingthe SI119. U', taxes which !flay be leVied pas.o;age by It!e governing lar numbeJ sOall includj3 without Ilmltalton as to bqdy .01 the City, approval the plural and vice verSa, rate or amount upon all by th~i Mayor and publi~aand words Impor\lng ,per-the taxable tangible prop-tlon In Ine offlcral City sons'~shall includelirms, erty, real anq p.erson\ll, newspl\per. associations and corpora· wlthlll the temtorral Itmlts ttons, including publiC bod· of the City. The full fa~h!. les as' welras natural per' cre_dlt and resourceS· a sons. the City are hereby lrrevo-"Act" means the COIlStl-cably pledged for the tutlon and statutes of the prompt payment of the State Including' K.S.A. prtnclpatof and interest on 10-101 to 10-125, mclu. the e<lnds as the same sive, K.S.A. 10·620 et become due. PASSED by the govern· ing bodYol the City on July 9, 2012 and AP, PROVED AND SIGNED by the Mayor NormanM Jennings, Mayo, seq" and K.SA 12.6a01 SeQt!lmA. Terms, Dee! seq., all as amencted tallSiili:lConditions of (SEAL) and supptemented from the Bonds. The Bonds ArrEST: time to timE!, shall be dated and bear In· . Lieu Ann Elsey. Clerk "Bond and Intores! terest, shall matu,e and (1t) Fund" means the Bond be payable at such times, and Interest Pund of the shall be In such forms, City for Its general obllga· shall be subject to re· tlon bonds. dgmptlon and payment RESOLUTION NO. 12-6917 OF THE CITY OF SALINA, KANSAS ADOPTED JULy 9, 2012 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A Section 101. Section 201. Section 202. Section 203. Section 204. Section 205. Section 206. Section 207. Section 208. Section 209. Section 210. Section 211. Section 212. Section 213. Section 301. Section 302. Section 303. Section 401. Section 402. Section 501. Section 502. Section 503. Section 504. Section 505. Section 506. Section 507. Section 601. Section 602. TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................... 1 ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Authorization of the Bonds ........................................................................................... 8 Description of the Bonds ............................ ................................................................... 8 Designation of Paying Agent and Bond Registrar ......................................................... 9 Method and Place of Payment of the Bonds .................................................................. 9 Payments Due on Saturdays, Sundays and Holidays ................................................ .. 1 0 Registration, Transfer and Exchange of Bonds ........................................................... 1 0 Execution, Registration, Authentication and Delivery of Bonds ..................... ........... 11 Mutilated, Lost, Stolen or Destroyed Bonds ............................................................... 12 Cancellation and Destruction of Bonds Upon Payment. ...................... ....................... 12 Book-Entry Bonds; Securities Depository .................................................................. 12 Nonpresentment of Bonds ...................................... ..................................................... 13 Preliminary and Final Official Statement. ................................................................... 14 Sale of the Bonds ......................................................................................................... 14 ARTICLE III REDEMPTION OF BONDS Redemption by Issuer ............................... ................................................................... 14 Selection of Bonds to be Redeemed ............................................................................ 14 Notice and Effect of Call for Redemption ................................................................... 15 ARTICLE IV SECURITY FOR BONDS Security for the Bonds ............................... .................................................................. 1 7 Levy and Collection of Annual Tax; Transfer to Debt Service Account. ................... 17 ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Creation of Funds and Accounts ................................................................................. 17 Deposit of Bond Proceeds ........................................................................................... 18 Application of Moneys in the Improvement Fund ......................................... ............. 18 Substitution ofImprovements; Reallocation of Proceeds ........................................... 18 Application of Moneys in Debt Service Account ................................... ..................... 18 Application of Moneys in the Rebate Fund ................................................................. 19 Deposits and Investment of Moneys .............................. ............................................. 19 ARTICLE VI DEFAULT AND REMEDIES Remedies ............................................................................................................. ........ 20 Limitation on Rights of Owners .................................................................................. 20 Section 603. Section 701. Section 801. Section 802. Section 901. Section 902. Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. Remedies Cumulative .................................................................................................. 20 ARTICLE VII DEFEASANCE Defeasance ....................... ............................................................................................ 21 ARTICLE VIII TAX COVENANTS General Covenants .......................................................... ............................................ 21 Survival of Covenants ................................................................................................. 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements ............................................................................................. 22 Failure to Comply with Continuing Disclosure Requirements ................................... 22 ARTICLE X MISCELLANEOUS PROVISIONS Annual Audit. ....................................................................................... ....................... 22 Amendments ................................................................................................................ 22 Notices, Consents and Other Instruments by Owners ................................................. 23 Notices .................................................................................................................... ..... 24 Electronic Transactions ............................................................................................... 24 Further Authority ................................................. ........................................................ 24 Severability .................................................................................................................. 24 Governing Law ............................................................................................................ 24 Effective Date ....................................................... ....................................................... 24 EXHIBIT A -FORM OF BONDS ............................................................................................................. A-1 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 11 RESOLUTION NO. 12-6917 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2012-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 12-10642 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the Issuer has heretofore passed the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the governing body of the Issuer to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., and K.S.A. 12-6a01 et seq., all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who, directly or indirectly has the investment power with respect to such Bonds. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar. "Bond Registrar" means the State Treasurer, and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" means the General Obligation Internal Improvement Bonds, Series 2012-A, authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee ofDTC and any successor nominee ofDTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly -appointed Deputy Clerk or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Bonds, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or expenses incurred in obtaining municipal bond insurance on the Bonds. "Dated Date" means July 15, 2012. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2012-A created within the Bond and Interest Fund pursuant to Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers. "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or 2 (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) the obligations are rated in the highest rating category by Moody's (presently "Aaa") or Standard & Poor's (presently "AAA"). "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Instructions" means the Continuing Disclosure Instructions dated as of the Issue Date, attached to the Issuer's Closing Certificate, relating to certain obligations contained in the SEC Rule. "DTC" means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed. "DTC Representation Letter" means the Blanket Letter of Representation from the Issuer and the Paying Agent to DTC which provides for a book-entry system, or any agreement between the Issuer and Paying Agent and a successor securities depository duly appointed. "Event of Default" means each of the following occurrences or events: (a) Payment of the principal and of the redemption premium, if any, of any of the Bonds shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b) Payment of any installment of interest on any of the Bonds shall not be made when the same shall become due; or 3 (c) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution (other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Instructions) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Finance able Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the governing body of the Issuer to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Finance able Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve month period ending on December 31. "Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501 hereof. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2012-A created pursuant to Section 501 hereof. "Improvements" means the improvements referred to in the preamble to the Ordinance and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April 1 and October 1 of each year, commencing April 1, 2013. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or III the Mayor's absence, the duly appointed andlor elected Vice Mayor or Acting Mayor ofthe Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. 4 "Notice Address" means with respect to the following entities: (a) To the Issuer at: City of Salina, Kansas Attn: City Clerk 300 West Ash Salina, Kansas 67402 Fax: (785)309-5738 (b) To the Paying Agent at: State Treasurer of the State of Kansas Landon Office Building 900 Southwest Jackson, Suite 201 Topeka, Kansas 66612-1235 Fax: (785) 296-6976 (c) To the Purchaser: UMB Bank, N.A. 1010 Grand Boulevard, 2nd Floor Kansas City, Missouri 64106 Fax: (816) 860-4829 (d) To the Rating Agency(ies): Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 Standard & Poor's, a division of The McGraw-Hill Companies 55 Water Street, 38th Floor New York, New York 10004 or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a) With respect to the Issuer, the Clerk. (b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services. (c) With respect to any Purchaser, the manager of its Municipal Bond Department. (d) With respect to any Rating Agency, any Vice President thereof. 5 "Official Statement" means Issuer's Official Statement relating to the Bonds. "Ordinance" means Ordinance No. 12-10642 of the Issuer authorizing the Issuance of the Bonds, as amended from time to time. "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Section 701 hereof; and (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner ofthe Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); G) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (1) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted or modified by amendments to applicable State law. "Person" means any natural person, corporation, partnership, joint venture, assocIatIOn, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. 6 "Purchase Price" means the pnncipal amount of the Bonds plus accrued interest to the date of delIvery. "Purchaser" means UMB Bank, N.A., Kansas City, Missouri, the original purchaser of the Bonds, and any successor and assigns. "Rating Agency" means any company, agency or entity that provides, pursuant to request of the Issuer, financial ratings for the Bonds. "Rebate Fund" means the Rebate Fund for General Obligation Internal Improvement Bonds, Series 2012-A created pursuant to Section 501 hereof. "Record Dates" for the mterest payable on any Interest Payment Date means the fIfteenth day (whether or not a Business Day) of the calendar month next precedmg each Interest Payment Date. "Redemption Date" means, when used with respect to any Bond to be redeemed, the date fixed for the redemption of such Bond pursuant to the tenns of this Bond Resolution. "Redemption Price" means, when used with respect to any Bond to be redeemed, the pnce at whIch such Bond is to be redeemed pursuant to the tenns of this Bond Resolution, including the applicable redemption premium, If any, but excludIng Installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Notes" means the Senes 2011-1 Notes maturIng on August 1,2012, m the aggregate principal amount of $3,400,000. "Refunded Notes Paying Agent" means the paying agent for the Refunded Notes as designated in the Refunded Notes ResolutIon, and any successor or successors at the time acting as paymg agent of the Refunded Notes. "Refunded Notes Redemption Date" means August 1, 2012. "Refunded Notes Resolution" means the resolution which authorized the Refunded Notes. "Replacement Bonds" means Bonds Issued to the BenefIcial Owners of the Bonds m accordance WIth Section 210 hereof. "SEC Rule" means Rule 15c2-12 adopted by the Sec untIes and Exchange CommISSIOn under the Securities Exchange Act of 1934, as may be amended from time to time. "Securities Depository" means, Initially, DTC, and its successors and assIgns. "Series 2011-1 Notes" means the Issuer's General ObligatIOn Temporary Notes, SerIes 2011-1, dated July 15, 2011. "Special Record Date" means the date fixed by the Paying Agent pursuant to Section 204 hereof for the payment of Dcfaultcd Interest. "Standard & Poor's" means Standard & Poor's RatIngs Services, a Division of the McGrawHill Companies, Inc., a corporation organized and existIng under the laws of the State of New York, and ItS 7 successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "State" means the state of Kansas. "State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State. "Stated Maturity" when used with respect to any Bond or ~my installment of interest thereon means the date specified in such Bond and this Bond Resolution as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Substitute Improvements" means the substitute or additional improvements of the Issuer described in Section 504(a) hereof. "Treasurer" means the duly appointed and/or elected Treasurer of the Issuer or, III the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer. ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Section 201. Authorization of the Bonds. The Bonds have been heretofore authorized and directed to be issued pursuant to the Ordinance in the principal amount of $2,365,000, for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) pay Costs ofIssuance; and (c) retire the Refunded Notes. Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in an Authorized Denomination, and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturities, subject to redemption and payment prior to their Stated Maturities as provided in Article III hereof, and shall bear interest at the rates per annum as follows: 8 SERIAL BONDS Stated Maturity Principal Annual Rate Stated Maturity Principal Annual Rate October 1 Amount of Interest October 1 Amount of Interest 2013 $130,000 1.000% 2021 $160,000 1.650% 2014 140,000 1.000% 2022 160,000 1.850% 2015 145,000 1.250% 2023 165,000 2.000% 2016 150,000 1.500% 2024 170,000 2.100% 2017 150,000 1.500% 2025 175,000 2.200% 2018 155,000 1.500% 2026 175,000 2.350% 2019 155,000 1.500% 2027 180,000 2.450% 2020 155,000 1.400% The Bonds shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204 hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar. Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent. 9 The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date. The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and at least annually shall forward a copy or summary of such records to the Issuer. Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Section 206. Registration, Transfer and Exchange of Bonds. The Issuer covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond Registrar as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any Authorized Denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature 10 satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Bonds. The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Section 303 hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 204 hereof. The Issuer and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute Owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Bond Registrar. Section 207. Execution, Registration, Authentication and Delivery of Bonds. Each of the Bonds, including any Bonds issued in exchange or as substitutions for the Bonds initially delivered, shall be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Clerk, and the seal of the Issuer shall be affixed thereto or imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds in the manner herein specified, and to cause the Bonds to be registered in the office of the Clerk, which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Bonds shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bonds ceases to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond are the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. 11 The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Bond Registrar for authentication. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at anyone time. No Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Bond Resolution. Upon authentication, the Bond Registrar shall deliver the Bonds to the Purchaser upon instructions of the Issuer or its representative. Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond under this Section, the Issuer and the Paying Agent may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Bond Resolution equally and ratably with all other Outstanding Bonds. Section 209. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer. Section 210. Book-Entry Bonds; Securities Depository. The Issuer and Paying Agent have entered into a DTC Representation Letter with DTC. The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraph. 12 The Issuer may decide, subject to the requirements ofthe Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(1) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in an Authorized Denominations and form as provided herein. Section 211. Nonpresentment of Bonds. If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit ofthe Owner of such Bond, l3 who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under thIS Bond ResolutIon or on, or with respect to, said Bond. If any Bond is not presented for payment wIthm four (4) years following the date when such Bond becomes due at Matunty, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paymg Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 212. Preliminary and Final Official Statement. The Preliminary Official Statement dated June 20, 2012, is hereby ratIfied and approved. The Official Statement is hereby authorized to be prepared by supplementmg, amending and completing the PrelIminary OfficIal Statement, with such changes and additions thereto as are necessary to conform to and descnbe the transaction. The Mayor and chief financial offIcer of the Issuer are hereby authorized to execute the Official Statement as so supplemented, amended and completed, and the use and publIc dIstnbutIOn of the Official Statement by the Purchaser m connection WIth the reoffering of the Bonds is hereby authorized. The proper offiCIals of the Issuer are hereby authorized to execute and delIver a certIfIcate pertaining to such Official Statement as prescribed therein, dated as of the Issue Date. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of Rule lSc2-12(3) and (4) of the Securities and Exchange Commission and WIth the requirements of Rule G-32 of the Municipal Securities Rulemakmg Board. Section 213. Sale of the Bonds. The sale of the Bonds to the Purchaser is hereby ratified and confirmed. The Mayor and Clerk are hereby authorized to execute the official bId form submItted by the Purchaser. DelIvery of the Bonds shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoptIOn ofthis Bond Resolution), upon payment of the Purchase Price. ARTICLE III REDEMPTION OF BONDS Section 301. Redemption by Issuer. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 m the years 2020, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2019, and thereafter, as a whole or in part (selection of matuntIes and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall determine. Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of pnncipal amount in such equitable manner as the Bond RegIstrar may determine. 14 In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of a minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. [The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption.] Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar, the State Treasurer and the Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. 15 The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in tum, notify its Participants and that the Participants, in tum, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer aefaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Instructions. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: ( a) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (1) the CUSIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; (4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. (c) Each check or other transfer of funds issued for the payment of the Redemption Price of Bonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange 16 Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 402. Levy and Collection of Annual Tax; Transfer to Debt Service Account. The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. The taxes and/or assessments referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a) Improvement Fund for General Obligation Internal Improvement Bonds, Series 20l2-A; (b) Debt Service Account for General Obligation Internal Improvement Bonds, Series 2012-A (within the Bond and Interest Fund); and 17 (c) Rebate Fund for General Obligation Internal Improvement Bonds, Series 2012-A. The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a) All accrued interest received from the sale of the Bonds shall be deposited in the Debt Service Account. (b) The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited in the Improvement Fund. Section 503. Application of Moneys in the Improvement Fund. Moneys in the Improvement Fund shall be used for the sole purpose of: (a) paying the costs of the Improvements, in accordance with the plans and specifications therefor approved by the governing body of the Issuer and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable and approved by the governing body of the Issuer; (b) paying Costs of Issuance; (c) retiring the Refunded Notes; and (d) transferring any amounts to the Rebate Fund required by Section 506 hereof. Section 504. Substitution of Improvements; Reallocation of Proceeds. (a) The Issuer may elect for any reason to substitute or add other public improvements to be financed with proceeds of the Bonds provided the following conditions are met: (1) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the governing body of the Issuer in accordance with the laws of the State; (2) a resolution authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the governing body of the Issuer pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution to the transcript of proceedings for the Bonds to include the Substitute Improvements; and (4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law. (b) The Issuer may reallocate expenditure of Bond proceeds among all Improvements financed by the Bonds; provided the following conditions are met: (1) the reallocation is approved by the governing body of the Issuer; (2) the reallocation shall not cause the proceeds of the Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the 18 Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and Interest Fund. Section 506. Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code § l48(f) in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. (c) Notwithstanding any other provision of this Bond Resolution, including in particular Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account. 19 ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been detennined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their fonner positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. 20 ARTICLE VII DEFEASANCE Section 701. Defeasance. When any or all of the Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Section 303 of this Bond Resolution. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor and Clerk are hereby authorized and directed to execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer. Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article VII hereof or any other provision of this Bond Resolution until such time as is set forth in the Federal Tax Certificate. 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Section 901. Disclosure Requirements. The Mayor and Clerk are hereby authorized and directed to execute the Disclosure Instructions in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Instructions, which are incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners. Section 902. Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of this Bond Resolution, failure of the Issuer to comply with its covenants contained in the preceding section shall not be considered an Event of Default under this Bond Resolution. ARTICLE X MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the governing body of the Issuer shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Bond Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: ( a) extend the maturity of any payment of principal or interest due upon any Bond; 22 (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Bond; (c) permit preference or priority of any Bond over any other Bond; or (d) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by resolution duly adopted by the governing body of the Issuer at any time in any legal respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution adopted by the governing body of the Issuer amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within 23 such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed if the same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance ofthe Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor . and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1007. Severability. If any section or other part of this Bond Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Bond Resolution. Section 1008. Governing Law. This Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 1009. Effective Date. This Bond Resolution shall take effect and be in full force from and after its adoption by the governing body of the Issuer. 24 ADOPTED by the govemmg body of the Issuer on July 9, 2012. (SEAL) ATTEST: Clerk [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Signature Page to Bond Resolution -Series 2012-A) REGISTERED NUMBER EXHIBITA (FORM OF BONDS) REGISTERED $ Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES 2012-A Interest Rate: Maturity Date: REGISTERED OWNER: PRINCIPAL AMOUNT: Dated CUSIP: Date: July 15,2012 KNOW ALL PERSONS BY THESE PRESENTS: . That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 of each year, commencing April 1 , 2013 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on A-I the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defmed Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2012-A," aggregating the principal amount of $2,365,000 (the "Bonds") issued for the purposes set forth in the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer prescribing the form and details of the Bonds (collectively, the "Bond Resolution"). The Bonds are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 12-6a01 et seq., as amended, and all other provisions ofthe laws of the State of Kansas applicable thereto. General Obligations. The Bonds constitute general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain Improvements (as said term is described in the Bond Resolution) and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, the balance being payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby pledged for the payment of the principal of and interest on this Bond and the issue of which it is a part as the same respectively become due. Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity, as follows: Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2020, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2019, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 1 00% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Redemption Denominations. Whenever the Bond Registrar is to select Bonds for the purpose of redemption, it shall, in the case of Bonds in denominations greater than a minimum Authorized Denomination, if less than all of the Bonds then Outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such Bond as though it were a separate Bond in the denomination of a minimum Authorized Denomination. A-2 Notice of Redemption. Notice of redemption, unless waived, shall be given by the Issuer to the State Treasurer of Kansas, the Purchaser of the Bonds and to the Bond Registrar in accordance with the Bond Resolution. The Issuer shall cause the Bond Registrar to notify each Registered Owner at the address maintained on the Bond Register, such notice to be given by mailing an official notice of redemption by first class mail at least 30 days prior to the redemption date. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer defaults in the payment of the redemption price), such Bonds or portions of Bonds shall cease to bear interest. Book-Entry System. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon payment of the charges therein prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issued in fully registered form in Authorized Denominations. A-3 Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Bond Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS [(Facsimile Seal)] By: (facsimile) ATTEST: By: ________ ~(f:~a~c~si~m~i~le~) ______________ _ Clerk Mayor A-4 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2012-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date _______ _ Registration Number ______ _ Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent By ____________ _ CERTIFICATE OF CLERK STATE OF KANSAS ) ) SS. COUNTY OF SALINE) The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that the within Bond has been duly registered in my office according to law as of July 15, 2012. WITNESS my hand and official seal. (Facsimile Seal) By: (facsimile) Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS RON ESTES, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ______ _ WITNESS my hand and official seal. (Seal) By: Treasurer of the State of Kansas A-5 BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of $ __ --:-__ , standing in the name of the undersigned on the books of the Bond Registrar. The undersigned doe es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises. Dated ________ _ Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: By ____________________________ _ LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 (PRINTED LEGAL OPINION) A-6 TRANSCRIPT CERTIFICATE $2,365,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 15, 2012 The undersIgned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), do hereby make thIS certificate for mclusion in the transcript of and as a part of the proceedings authonzing and provIding for the issuance of the above descnbed bonds (the "Bonds"); and do hereby certify as of July 9, 2012, as follows: 1. Meaning of Words and Terms. Capitalized words and terms used herem, unless otherwise defined herein or the context requires otherwise, shall have the same meanings ascnbed to such words and terms in the hereinafter defined Bond Resolution authorizmg the Bonds. 2. Organization. The Issuer is a legally constItuted city of the fIrst class organIzed and existmg under the laws of the State of Kansas. 3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authonzatIon and issuance of the Bonds IS to the best of our knowledge, information and belief full and complete; none of such proceedings have been modifIed, amended or repealed, except as might be shown in the Transcript, and the facts stated m the Transcript still exist. In each and every mstance where copies appear m the Transcript, such copies are true and correct duplicates of the onginal instruments now on file with the Clerk. 4. Newspaper. The Salina Journal was the offiCIal newspaper of the Issuer at all tImes during these proceedmgs. 5. Meetings. All of the meetmgs of the governmg body of the Issuer at which actIOn was taken as shown m the Transcript were either regular meetings or duly adjourned regular meetings or special meetings duly called and held in accordance with law and the ordmances and rules ofthe Issuer. 6. Incumbency of Officers. The following named persons were and are the duly qualified and acting officers of the Issuer at and during all the times when action was taken as indIcated m the Transcnpt as follows: Name Title Term of Office Norman M. Jennmgs Mayor April 19,2012 to Present Samantha Angell Mayor April 18,2011 to April19, 2012 Aaron Peck Mayor April 19, 2010 to April 18, 2011 Samantha Angell Commissioner April 13,2009 to Present Barb Shirley CommISSIoner April 18, 2011 to Present Kaye Crawford Commissioner April 18, 2011 to Present Aaron Householter Commissioner April 18, 2011 to Present Norman M. Jennmgs Commissioner April 13,2009 to Present Luci Larson Commissioner April 16, 2007 to Apnl 18, 2011 Aaron Peck Commissioner April 16, 2007 to April 18, 2011 Tom Arpke CommIssioner April 13, 2009 to April 18, 2011 Lieu Ann Elsey Clerk 7. Execution of Bonds. The Bonds have been executed with facsimile signatures; and the facsimile signatures appearing on the face of the Bonds are facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer; which facsimiles are ratified as a proper execution of said Bonds. Each signature has been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Bonds and on the reverse side of each of the Bonds at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Bond bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen bond included in the Transcript is in the form adopted by the governing body of the Issuer for the Bonds. 8. Authorization of Bonds. The Bonds are being issued pursuant to Ordinance No. 12-10642 and Resolution No. 12-6917 (collectively, the "Bond Resolution") of the Issuer for the purpose of: (a) paying a portion of the costs of certain street, water and sewer improvements (the "Improvements") authorized by the governing body of the Issuer pursuant to K.S.A. 12-6aOl et seq., as amended, and all other applicable provisions of the laws of the State of Kansas; and (b) retiring on August 1, 2012 the following temporary notes of the Issuer, issued to temporarily finance the Improvements (the "Refunded Notes"): Description General Obligation Temporary Notes Series 2011-1 Dated Date July 15,2011 Maturity Date August 1,2012 Amount $3,400,000 The total principal amount of the Bonds does not exceed the cost of the Improvements for which the Bonds are issued. The interest rates on the Bonds on the date of the sale of the Bonds were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9. Bonded Indebtedness. The currently outstanding applicable indebtedness of the Issuer, including the Bonds, does not exceed any applicable constitutional or statutory limitations. A Schedule of Bonded Indebtedness, which sets forth all currently outstanding general obligation indebtedness of the Issuer, is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. 10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer for the year 2011 is as follows: Equalized Assessed Valuation of Taxable Tangible Property ............................ ................................. . Tangible Valuation of Motor Vehicles ................................................. . Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations ............................... . $402,354,576 47,406,062 $449,760,638 11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; (c) the legality of any official act shown to have been done in the 2 Transcript; (d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; (e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and interest on the Bonds. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 WITNESS our true and genuine manual signatures and the seal of the Issuer. (SEAL) (Signature Page to Transcript Certificate -Series 2012-A Bonds) EXHIBITA SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of July 15, 2012) General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturity Outstanding 07-15-02 2002-B Internal Improvements $ 1,980,000 10-01-12 $ 165,000 07-15-03 2003-A Internal Improvements 4,350,000 10-01-13 640,000 * 05-01-04 2004-A Refunding 5,585,000 08-01-15 1,170,000 07-15-04 2004-B Internal Improvements 4,053,000 10-01-12 380,000 * 07-15-05 2005-A Internal Improvements 4,210,000 10-01-13 665,000 * 03-15-06 2006-A Internal Improvements 2,200,000 10-01-26 1,650,000 07-15-06 2006-B Internal Improvements 885,000 10-01-21 535,000 06-15-07 2007-A Internal Improvements 6,545,000 10-01-27 5,085,000 07-15-08 2008-A Internal Improvements 3,720,000 10-01-23 3,000,000 12-15-08 2008-B Internal Improvements 3,525,000 07-01-28 3,295,000 07-15-09 2009-A Internal Improvements 23,695,000 10-01-29 20,645,000 05-01-10 201O-A Refundmg & Improvement 6,875,000 10-01-25 6,100,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 7,360,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-31 6,565,000 07-15~12 2012-A Internal Improvements 2,365,000 10-01-27 2,365,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 3,785.000 $63,405,000 *Does not include bonds to be refunded with proceeds from the sale of the Series 2012-B Bonds. Temporary Notes: Temporary notes represent general obligation indebtedness payable ultimately from the City's ability to levy unlimIted taxes upon all taxable tangible property within its terntorial limits. The City customarily redeems temporary notes with proceeds from the sale of long-term general obligation bonds or other avmlable funds. ProLect Street, Water, and Sewer Street, Water, and Sewer Series 2011-1 2012-1 Date Issued 07-15-11 07-15-12 Final Original Maturity Date 08-01-12 08-01-13 Note Amount $3,400,000 1,485,000 Amount Outstanding $ 0* 1,485,000 $1,485,000 * Amount outstandmg ($3,400,000) to be redeemed with proceeds from the sale of the Series 2012-A Bonds and available cash from the CIty. CERTIFICATE OF MANUAL SIGNATURE OF THE MAYOR OF THE CITY OF SALINA, KANSAS IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF KANSAS STATE OF KANSAS ) ) SS. COUNTY OF SALINE) I, the undersigned, Norman Jennings, being duly sworn on oath certify that I am the duly qualified Mayor of the City of Salina, Kansas, and that the signature appearing below is my signature and I file herewith this certificate pursuant to K.S.A. 75-4001 to 75-4007, inclusive. Subscribed and sworn to before me as of July 9,2012. a • LIEU ANN ELSEY ~ Notary. Pu~lit;r~tate of Kansas My Appt. Explres H Notary Public in and for said County and State (SEAL) '-l -Ir-p -13 My commission expires: _______ _ RECEIVED JUL 1 3 2012 KRIS W. KOBACH SECRETARY OF STATE IN'l'll:E OFFICE OF 'l".IlESECRETARY OF STATE 'OF'l'BE STATE OFKANSAS STATE OF KANSAS eoUNTIl' OF S~E ') ) ) • , • w • • ss. 1, fue undersigned, Lieu Ann Elsey, being duly swom, on oath st:\te that !.am the duly qualified City Clerk of the City of~ Kansas. and Ihereby, certify that the signature appearingbe10w is the true . and ·genuine manual signature of the undersigned. and r file herewith. this certificate pursuant to the provisiollS ofK-SA 75..4001 to 7.5-4007. iilcIUSIvCo ' . ' " cl,r . SUbscrl.bed and sworn to before'roe-this 2E day: of April. 2004. Notary PUblio' and fOr>: ' County aI;ld State My co.riJIIrlzsioII. expires: \ d 71 Df..JJ. .~ .... ~~ R E (} ~lWliD':' REGISTERED NUMBERl REGISTERED $130,000 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as ·s requested by an authorized representative of DTC (and any payment is made 0 de & Co. or to ,such other entity as is requested by an authorized representa ·ve f DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREO LUE OR OTHERWISE BY OR TO ANY PERSON IS WRO GFUr; registered owner hereof, Cede & Co., has an interest he Interest Rate: 1.00% CUSIP: 7947432M5 ym t. The principal or redemption price of this Bond shaH be paid at e em ia the person in whose name this Bond is registered at the maturity or pon resentation and surrender of this Bond at the principal office of the Treasurer of the Sta of Kans s, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on tIl" Bond 0 any Interest Payment Date shall be paid to the person in whose name this Bond is registered on t . stration books maintained by the Bond Registrar at the close of business on the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Intere n t punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not othe meanings assigned to such terms in the hereinafter defined Bond R General Obligations. principal and interest in part from spe . Redemption follows: redemption date ofrede e subject to redemption prior to maturity, as e Issuer, Bonds maturing on October 1 in the years Whenever the Bond Registrar is to select Bonds for the purpose of redemption, it shall, e c e of Bonds in denominations greater than a minimum Authorized Denomination, if les than all 0 the Bonds then Outstanding are to be called for redemption, 'treat each minimum Authorized enomi tion of face value of each such Bond as though it were a separate Bond in the denomination of a mimmum Authorized Denomination. Notice of Redemption. Notice of redemption, unless waived, shall be given by the Issuer to the State Treasurer of Kansas, the Purchaser of the Bonds and to the Bond Registrar in accordance with the Bond Resolution. The Issuer shall cause the Bond Registrar to notify each Registered Owner at the -2- address maintained on the Bond Register, such notice to be given by mailing an official notice of redemption by first class mail at least 30 days prior to the redemption date. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer defaults in the payment of the redemption price), such Bonds or portions of Bonds shall cease to bear interest. Denominations. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Bond Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. -3- IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Bond to b ex uted by the manual or facsimile signature of its Mayor and attested by the manual or facsimile . nat e a its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SAL By: -4- CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2012-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date _______ _ Registration Number 0322-085-071512-425 STATE OF KANSAS COUNTY OF SALINE The undersigned, Clerk has been duly registered in my OFFICEO T ) ) ) hereby certify that the within Bond 5,2012. sur e State of Kansas, does hereby certify that a transcript of the proceedings leadin p t t e iss ance of this Bond has been filed in the office of the State Treasurer, and that this Bond was reg' tered in s ch office according to law on ______ _ (Seal) By: ______________________ __ Treasurer of the State of Kansas -5- BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identificafo No.) Dated ________ _ -6-actly as name( s) e a Certificate) ned do(es) nd on the LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, pc., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: Governing Body City of Salina, Kansas UMB Bank, N.A. Kansas City, Missouri GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 6410 Re: $2,365,000 General Obligation I the City of Salina, Kansas, Date We have acted as Bond Counsel in co nec'o wit (the "Issuer"), of the above-captioned b 2. levied upo ad valorem oth principal and interest in part from special assessments by the construction of certain improvements and, if not so paid, from . d without limitation as to rate or amount upon all the taxable tangible e territorial limits of the Issuer. The balance or the principal and interest on the onds is 0 ad valorem taxes which may be levied without limitation as to rate or amount upon e ta able ta gible property, real and personal, within the territorial limits of the Issuer. The Issuer is quired b law to include in its annual tax levy the principal and interest coming due on the Bonds to e extent t at necessary funds are not provided from other sources. . 3. The interest on the Bonds (including any original issue discount properly allocable to an owner of a Bond) is: (a) excluded from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinions set forth in this -7- paragraph are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order to preserve the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Cod and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code) uction is allowed for 80 percent of that portion of such financial institution's interest expense alloca Ie t interest on the Bonds. We express no opinion regarding other federal tax consequences arisin re ec 0 the Bonds. 4. The interest on the Bonds is exempt from income t We express no opinion regarding the accuracy, co pletene Statement or other offering material relating to the Bonds except Official Statement). Further, we express no opinion rega g tax the Bonds other than as expressly set forth in this opinio The rights of the owners of the Bonds bankruptcy, insolvency, reorganization, moratori generally and by equitable principles, whether c This opinion is given as of its date, a d opinion to reflect any facts or circumsta ha: may occur after the date of this opinion -8-respect to y be limited by ng creditors' rights revise or supplement this or any changes in law that AGREEMENT BETWEEN ISSUER AND AGENT $2,365,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 15, 2012 THIS AGREEMENT, dated as of July 15, 2012, between the City of Salina, Kansas, a municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent"). WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the abovecaptioned bonds (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Bond Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows: I. APPOINTMENT Issuer hereby appoints or has heretofore appointed the State Treasurer of Kansas to act as Paying Agent, Bond Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Bond Registrar and Transfer Agent. II. BASIC DUTIES A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and addressees) of the initial registered owner(s) of the Securities together with such registered owners' tax identification (social security) number(s), the maturity date(s), denomination(s) and interest rate(s) for each Security. B. Agent shall manually authenticate the originally issued Securities upon the written order of one or more authorized officers of Issuer. Thereafter, Agent shall manually authenticate all Securities resulting from transfer or exchange of Securities. C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be presented for registration, transfer and exchange; and shall also maintain an office in the City of Topeka, Kansas, where Securities may be presented for payment. Agent shall keep a register of the Securities and their transfer and exchange. D. Agent may rely upon any document believed by it to be genuine and to have been signed or presented by the proper person. Agent need not investigate any fact or matter stated in the document. Agent undertakes to perform such duties and only such duties set forth in K.S.A. 10-620 et seq., except as specifically provided in this Agreement. E. Agent shall notify the owners of the Securities upon default in payment of principal or interest on the Securities and the Agent shall have no duties or responsibilities thereafter. III. COMPENSATION Issuer covenants and agrees to pay to Agent, as reasonable compensation for the servlCes provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $2,956.25, This amount will be due at the time of registration unless such fee is to be paid from the proceeds of the bond issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the bond issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. 10-505 for performing the duties of paying the principal of the Securities. IV. STANDARD OF PERFORMANCE Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securities are to be issued in certificated or uncertificated form, or both. A. STATEMENTS OF OWNERSHIP Agent agrees to provide Statements of Ownership to the owner of uncertificated Securities. Such Statements shall be in accordance with the standards set forth by the Attorney General. All Statements shall be issued in the denominations of $1,000 or $5,000 or integral multiples thereof except for one additional Security in another denomination, which additional Security shall mature in the initial maturity year of the series of the Securities. Interest is computed on the basis of$1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equalling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Agent shall at all times maintain an adequate supply of Statements of Ownership for any anticipated transfers or exchanges of the Statements. B. CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordance with the standards set forth by the Attorney General and unless otherwise authorized by Agent, the principal thereof shall be payable only upon surrender of the Security to Agent. All certificates shall be issued in the denomination of $1 ,000 or $5,000 or integral multiples thereof except one authorized Security in another denomination which additional Security shall mature in the initial maturity year of the series of Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the payment of the printing or other expenses for such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each number(s) prior to the issuance of the applicable Securities. C. INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1,000 and $5,000 units, or in the case of one odd denomination, calculate the unit separately. Each intermediate unit calculation is first determined, then rounded to the sixth decimal position; i.e. whenever the seventh 2 decimal place is equal to or greater than five the sixth decimal place is increased by one. The final per unit calculation is subsequently rounded to two decimal positions. (See Attachment "A" for sample calculation.) D. SURRENDER Securities surrendered for payment, cancellation or partial redemption shall be cancelled by Agent and returned to Issuer in accordance with K.S.A. 10-111. E. TRANSFERS AND EXCHANGES 1. When Securities are presented to Agent for transfer or exchange, Agent shall so transfer or exchange such Securities if the requirements of Section 8-401(1) of the Uniform Commercial Code are met. 2. In accordance with the authorizing Resolution or Ordinance of the Issuer (the "Bond Resolution"), payments of interest shall be made to the owner of record of each Security as of the close of business on the fifteenth day of the month preceding each interest payment date. The Agent shall make such payments to the record owner of each Security as set forth on the registration books maintained by Agent as of such date. 3. Agent shall not be required to transfer or exchange any Security during a period beginning on the day following the fifteenth day of the month preceding any interest payment date for such Securities and ending at the close of business on the interest payment date, or to transfer or exchange any Security selected or called for redemption in whole or in part subsequent to the date notice of such redemption is given in accordance with the Bond Resolution authorizing the Securities. F. REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers or exchanges shall bear a Date of Registration as of the date that all the required documentation is received at the Agent's official place of business. Issuer will provide funds to make any interest or principal payments in accordance with K.S.A. 10-130 and amendments thereto. Agent is hereby authorized to effect any semiannual payment of interest or any principal by charging the Issuer's Fiscal Agency account with Agent. G. REPLACEMENT OF SECURITIES If the owner of a Security claims that a Security has been lost, destroyed or wrongfully taken, Issuer shall issue and Agent shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent shall perform this function. An indemnity bond and affidavit of loss shall be provided to Agent and Issuer at the expense of the owner of the Security. Such indemnity bond and affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agent from any loss which any of them may suffer if the Security is replaced. Issuer may charge the Security owner for its expenses in the replacement of a Security. 3 H. REDEMPTIONS Optional Redemption. If any Securities are to be redeemed pursuant to an optional redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen (15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen (15) days preceding the date notice is to be provided to the Security owners for the purpose of selecting Securities on a partial redemption. Further, in the event notice is given to Agent for a complete redemption of the Issue according to the terms of the Bond Resolution, Agent shall not be required to transfer or exchange any Security beginning on the day following the 15th day preceding the date set for redemption. 1. ~MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal to one Security for each maturity) for registration and exchange, and shall safeguard any "blank" Securities held for purpose of exchange or transfer. J. REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance of Securities upon written request ofIssuer. K. CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas and also the Bond Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 4 CITY OF SALINA, KANSAS (SEAL) ATTEST: BY~ Clerk (SEAL) OFFICE OF THE TREASURER OF THE STATE OF KANSAS (Signature Page to Agreement Between Issuer & Agent -Series 20 12-A Bonds) ATTACHMENT "A" SAMPLE $5,000.00000 ........................ Bond Unit x .06875 ........................ Interest Rate 343.750000 Rounded to six decimal places /360 ........................ Days per year .954861 Rounded to six decimal places x 180 ........................ Day in interest period 171.874980 (Rounded to second decimal = $171.87) Unit interest is then multiplied by the number of units in the maturity. I-I (SEAL) ATTEST: BY~ Clerk (SEAL) CITY OF SALINA, KANSAS By -F--=-"b"-o.,.L-f----4'---::;;.,<""'------OFFICE OF THE TREASURER OF THE STATE OF KANSAS By ___________ _ (Signature Page to Agreement Between Issuer & Agent -Series 2012-A Bonds) , ," ',' Blanket Issuer Letter of Representations [To be Completed by Issuer] ern OF SAT.INA. KABSAS [Name or Issuer} .. Ifay 30» ,1996 " . (Date] Attention: Underwriting Department -Eligibility The Depository Trust Company 55 Water Street; 50th Floor Ne\ .... York, NY 10041·0099 Ladies and Gentlemen: This letter sets forth our understanding with respect to all issues (the "Securities") that Issuer shall request he made eligible fo~ deposit.by The Depository Trust Company (MDTC"), To induce pTe to accept the Securities as eligible for deposit at DTe. and to act in accorda. ce \l.ith DTC's Rules v.ith respect to the Securities. Issuer represents to DTe that Issuer will comply with the requirements stated in DTe'~ Operational Arrangements, as they may be amended from time to time. Note: Schedule A contains statements that DTC believes accurately describe DTC, the method of eff~ bookentrv ttailsfers of securities distributed through D'tC, and certam related matteIlh ' ,-Received and Accepted: THE DEPOSrrORYTRUST eOMP~ ~.:J~ . Very truly yours, City of Sal ina, Kansas (Typt!"'rite Name ts: Title) 300 w. Ash Street Salina (Ctty) 913-826-7240 (Street Address) KS (State) (Phone Nmuber) 67402-0736 (Zip) ... -~ , SCHEDULE A (To Blanket Issuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY -ONLY ISSUANCE (Prepared by DTC-bmcketed material may be applicable only to cenain issues) l~ The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued' as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each Issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of sUch issue.] . 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Conunercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange' Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade Settlement among Direct Participants 'of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear thrQugh or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.eom and www.dtc.org. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details. of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will Dot receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name ofDTC's partnership nominee, Cede & Co., or such other name'as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, 'which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. BLOR 03125108 SCHEDULE A (To Blanket Issuer Letter of Representations) 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. (Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults. and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be' provided directly to them.] '[6. Redemption notices shall be sent to DTC. lfless than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] . 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will c~nsent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Onmibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credlted on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will'be made to Cede & Co., or such other nominee as lIlay be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers m bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption'proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. [9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [TenderlRemarketing] Agent, and shall effect delivery of such Securities. by caUsing the Direct P!lrticipant to transfer the Participant's interest in the Securities, on DTC's records, to [IenderlRemarketing] Agent. The requirement for physical delivery 'of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to [TenderlRemarketing] Agent's DTC account.] 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances. in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DIC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DIC and DTC's book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. BLOR 03/25108 MOODY'S INVESTORS SERVICE New Issue: Moody's assigns Aa2 rating to (KS) Improvement Bonds, 2mA and $3.8 million 201 1 rating to $1 million GO Global Credit Research -03 Jul 2012 GO Bonds, Notes, Series Aa2 rating applies to $63.5 million of post-sale long-term general obligation debt outstanding SALINA(CfTYOF) KS Cities (including Towns, Villages and Townships) KS Moody's Rating ISSUE General Obligation Refunding Bonds, Series 2012-B Sale Amount $3,840,000 Expected Sale Date Rating Description 07/09/12 General Obligation RATING Aa2 General Obligation Internal Improvement Bonds, Series 2012-A Aa2 Sale Amount $2,365,000 Expected Sale Date 07/09/12 Rating Description General Obligation General Obligation Temporary Notes, Series 2012-1 MIG 1 Sale Amount $1,485,000 Expected Sale Date 07/09/12 Rating Description Note: Bond Anticipation Moody's Outlook NOO Opinion NEW YORK, July 03, 2012 --Moody's Investors Service has assigned a Aa2 rating to the City of Salina's (KS) $2.4 million General Obligation Internal Improvement Bonds, Series 2012-Aand $3.8 million General Obligation Refunding Bonds, Series 2012-B; and a MIG 1 rating to the city's $1.5 million General Obligation Temporary Notes, Series 2012-1. Concurrently, Moody's has affirmed the Aa2 rating on the city's outstanding long-term general obligation debt. Post-sale, the city will have $63.5 million of long-term general obligation debt outstanding. SUMMARY RATINGS RATIONALE Both the bonds and notes are secured by the city's general obligation unlimited tax pledge. Proceeds of the Series 2012-Abonds will finance a variety of special assessment infrastructure projects as well as provide long-term takeout financing for the city's outstanding General Obligation Temporary Notes, Series 2011-1. Proceeds of the Series 2012-B bonds will current refund portions of the city's outstanding General Obligation Internal Improvement Bonds, Series 2003-A, General Obligation Internal Improvement Bonds, Series 2004-B, and General Obligation Internal Improvement Bonds, Series 2005-A, for an estimated savings. Proceeds of the Series 2012-1 Notes will provide interim financing for the city's share of road capital improvement projects. The Notes mature on August 1, 2013, and the MIG 1 rating is based on expected market access for the takeout financing, the city's demonstrated ability to access the market through its previous bond and note sales, and the underlying credit quality reflected by the city's long-term />a2 rating. The />a2 rating reflects the city's moderately-sized tax base; satisfactory financial operations characterized by a trend of declining reserves somewhat mitigated by positive operations in fiscal 2011; and manageable debt burden. STRENGTHS -Strong history of market access -Lack of levy limits provides flexibility to increase property tax levy for operations CHALLENGES -Multi-year trend of operating shortfalls leading to reduced reserve and liquidity levels -Dependence on an economically sensitive sales tax revenues for General Fund operations DETAILED CREDIT DISCUSSION EXPECTED MARKET ACCESS FOR REFINANCING The city's demonstrated ability to access the market includes multiple issues of bonds and notes borrowing in the last several years. The city expects to either repay the notes with an issuance of long-term bonds or roll over the notes for another year. City management is expected to make adequate provisions to address potential market disruptions at the time of the takeout finanCing, by planning to take out debt well in advance of final maturity and considering alternate back up plans if necessary. MODERATELY SIZED TAX BASE SERVES AS REGIONAL ECONOMIC CENTER We believe that due to its position as a regional retail hub, Salina should continue to enjoy relative economic stability. Located in Saline County 95 miles north of Wichita (GO rated />a1/stable outlook), the City of Salina's 2.9 billion tax base has experienced declines in recent years associated with the broader economic recession, as well as the state's exemption of machinery and new equipment from valuations. Despite these declines in fiscal years 2009 and 2010, full value increased at an average annual rate of 1.2% from 2006 to 2011. Located at the intersection of 1-70 and 1-135, the city serves as a regional retail, commercial, industrial, and medical hub for the largely agricultural communities of north central Kansas (long-term rated />a1/negative outlook). Residential income indices track slightly below state and national benchmarks, with 2006 -2010 median family income at 87.3% and 86.5% of state and national levels for the same time period, respectively. At 6.0% in May 2012, the city's unemployment rate tracked near the state rate (5.8%) and below the national rate (7.9%) for the same time period. STABILIZED FINANCIAL OPERATIONS IN FISCAL 2011 FOLLOWING TREND OF RESERVE DECLINES The city's restoration of positive operations in fiscal 2011 and its expectation of balanced operations moving forward pOints to the continuation of satisfactory financial operations. The city's General Fund balance declined steadily from fiscal 2007 to fiscal 2010 due to budgetary pressures in a variety of areas, including increased fuel costs, increased salary and benefit costs, and declines in economically sensitive sales tax revenues in fiscal 2010. Another factor in the General Fund balance decline is state legislation that increased property tax exemptions for new machinery and equipment. From $7.3 million in fiscal 2007, the city's General Fund reserves fell to $3.6 million in fiscal 2010. Favorably, as a result of a multi-year implementation of cost reductions such as a reduction In positions, changes to overtime policies and increased service fees, the city achieved a modest $63,000 operating surplus in fiscal 2011. The increase, combined with a fund balance restatement, increased reserves to $3.8 million, or a satisfactory 10.8% of revenues. Included in the positive fiscal 2011 results, the city executed a purchase of eight police vehicles due to available cost savings. As a result, the city will not need to purchase additional police vehicles for the next two fiscal years. Based on year to date trends, the city currently expects balanced operations in a worst-case scenario for the current fiscal year 2012. Looking ahead, the city has implemented additional cost savings measure such as contracting out the operations of its concert center in an effort to reduce the facility's reliance on General Fund support. The facility currently requires a General Fund subsidy of $600,000, and the city expects to reduce this reliance over the next several years. Typical of Kansas cities, sales tax receipts represent the city's primary operating revenue source, comprising 33% of fiscal 2011 General Fund revenues. Several different sales taxes are collected, including a 1 % Countywide Local Option Sales Tax and a 0.5% Citywide Local Option Sales Tax and do not sunset. In addition, the city passed a 0.4% local sales tax effective April 1 , 2009 which replaced a .25% local sales tax that was scheduled to sunset on June 1, 2010. Like all Kansas cities, Salina also benefits from the revenue raising flexibility due to the lack of levy limits. Future credit reviews will take into account the city's ability to maintain balanced operations, as well maintain and rebuild its reserve and liquidity levels. AVERAGE DEBT LEVELS EXPECTED TO REMAIN MANAGEABLE The city's debt burden is expected to remain manageable given average principal amortization and moderate future borrowing plans. At 2.2% and 4.5% of full value, respectively, the city's direct and overall debt burdens are average. Principal amortization is average, with 79.8% of general obligation debt retired in ten years. The city generally issues long term and short term debt once or twice per year to fund projects outlined in its Capital Improvement Plan. Looking further ahead, the city expects to issue revenue debt associated with the replacement of its wastewater treatment plant in approximately five years. All of the city's debt is fixed rate, and the city is not a party to any interest rate swap agreements. WHAT COULD CHANGE THE RATING -UP -Substantial growth in the city's tax base -Substantial improvement in General Fund reserves WHAT COULD CHANGE THE RATING -DOWN -Further reductions to reserve levels due to operating deficits -Erosion of the city's tax base KEY STATISTICS 2010 Population: 47,707 (4.4% increase since 2000) 2011 Full value: $2.9 billion City of Salina unemployment rate (May 2012): 6.0% Fiscal 2011 General Fund balance: $3.8 million (10.8% of General Fund revenues) Direct debt burden: 2.2% (4.5% overall) Payout (10 Years): 79.8% Post-sale long term general obligation debt outstanding: $63.5 million PRINCIPAL METHODOLOGY The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com. For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com. Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, and public information. rvtoody's considers the quality of inform ation available on the rated entity, obligation or credit satisfactory for the purposes of Issuing a rating. rvtoody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources rvtoody's considers to be reliable including, when appropriate, independent third-party sources. However, rvtoody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests. Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entitles that hold ratings from MIS that have also publicly reported to the SEC an ownership Interest In MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of rvtoody's Corporation; however, rvtoody's has not independently verified this matter. Please see rvtoody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery. Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before rvtoody's ratings were fully digitized and accurate data may not be available. Consequently, rvtoody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see www.moodys.com for any updates on changes to the lead rating analyst and to the rvtoody's legal entity that has issued the rating. Analysts Thomas Aaron Lead Analyst Public Finance Group rvtoody's Investors Service Tatiana Killen Backup Analyst Public Finance Group rvtoody's Investors Service Rachel Cortez Additional Contact Public Finance Group rvtoody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 rvtoody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 USA MOODY'S INVESTORS SiERVICE © 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MN INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MN NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FPCT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIALADVlCE,AND CREDIT RATINGSAND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EPCH INVESTOR WILL MAKE ITS OVIIN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORI'v1ATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORI'v1ATION I'v1AY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable, including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORI'v1ATION IS GNEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MeO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -Corporate Governance -Director and Shareholder Affiliation Policy." Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty LimitedABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761 G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761 G of the Corporations Act 2001. Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. This credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser. CLOSING CERTIFICATE $2,365,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 15, 2012 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), make this Certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described bonds (the "Bonds"); and certify as of July 26, 2012 (the "Issue Date"), as follows: 1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Bond Resolution (defined below) authorizing the Bonds. 2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and issuance of the Bonds (the "Transcript"), furnished to the Purchaser of the Bonds, is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated July 9, 2012 are true and correct as of this date and are incorporated in this Certificate by reference. 3. The Bond Resolution. The Issuer is issuing and delivering the Bonds simultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 12-6aOl et seq., as amended, Ordinance No. 12-10642 and Resolution No. 12-6917 of the Issuer duly adopted by the governing body of the Issuer on July 9, 2012 (collectively, the "Bond Resolution"). 4. Purpose of the Bonds. The Bonds are being issued pursuant to the Bond Resolution for the purpose of: (a) paying a portion of the costs of certain street, water and sewer improvements (the "Improvements"); and (b) retmng on August 1, 2012 the following temporary notes of the Issuer, issued to temporarily fmance the Improvements (the "Refunded Notes"): Description General Obligation Temporary Notes Series 2011-1 Dated Date July 15, 2011 Maturity Date August 'I, 2012 Amount $3,400,000 5. Security for the Bonds. The Bonds are general obligations of the Issuer payable in part from special assessments levied upon the property benefited by the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, with the balance payable,] from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are pledged under the Bond Resolution to the payment of the principal of and interest on the Bonds. In the Bond Resolution, the governing body of the Issuer has covenanted to annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. 6. Sale of Bonds. The Bonds have been sold at rates not in excess of the limitations set forth in K.S.A. 10-1009. The Notice of Bond Sale dated June 11, 2012 and included in the Transcript constitutes a full true and correct copy thereof. A copy of such Notice of Bond Sale and Preliminary Official Statement was sent to prospective purchasers of the Bonds, and to all other persons and firms requesting copies of such Notice of Bond Sale and Preliminary Official Statement. 7. Official Statement. The Official Statement contained in the Transcript constitutes a full, true and correct copy of the Official Statement relating to the Bonds. To the best of our knowledge, the Official Statement, other than the sections entitled ':The Depository Trust Company," "Ratings," "Legal Matters," "Tax Matters," and Appendices A and B, about which the Issuer expresses no opinion, is true in all material respects, and does not contain any untrue statement of a material fact or does not omit to state a material fact, necessary in order to make the statements made therein, in light of the circulllstances under which they were made, not misleading. As of this date there has been no material adverse change in the financial condition or the financial affairs of the Issuer since the date of the Official Statement. No other event has occurred which is necessary to be disclosed in the Official Statement in order to make the statements therein not misleading in any material respect as of the date of this Certificate. The Issuer has previously caused to be delivered to the Purchaser copies of the Official Statement. 8. Continuing Disclosure Instructions. The Issuer, in the Bond Resolution, has covenanted to disseminate such information as is required in accordance with the provisions of the SEC Rule and the Continuing Disclosure Instructions, which are attached to this Certificate as Exhibit A, and incorporated in this Certificate by reference. 9. Non-Litigation. There is no controversy, action, suit, proceeding, or to the best of our knowledge, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; (d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; (e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; (f) the levy and collection of an ad valorem property tax to pay the principal of and interest on the Bonds; or (g) the federal or state tax-exempt status of the interest on the Bonds; wherein any unfavorable decision, ruling or finding would adversely affect the Issuer, the transactions contemplated by the Bond Resolution or the Official Statement, or the validity or enforceability of the Bonds, which are not disclosed in the final Official Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 (SEAL) WITNESS our hands and the seal of the Issuer. Signature Official Title Mayor Clerk (Signature Page to Closing Certificate -Series 2012-A Bonds) EXHIBITA CONTINUING DISCLOSURE INSTRUCTIONS CITY OF SALINA, KANSAS $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULy 15, 2012 THESE CONTINUING DISCLOSURE INSTRUCTIONS (the "Disclosure Instructions") are executed and delivered by the Issuer in connection with the issuance of the above-described bonds (the "Bonds") which are being issued simultaneously herewith as of July 26, 2012, pursuant to the Bond Resolution, in which the Issuer covenants to enter into this undertaking to provide certain financial and other information with respect to the Bonds in order to assist the Participating Underwriter in complying with the provisions of the SEC Rule. The Issuer is the only "obligated person" with responsibility for continuing disclosure with respect to the Bonds. Section 1. Definitions. In addition to the defmitions set forth in the Bond Resolution, which apply to any capitalized term used in these Disclosure Instructions, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described in, Section 2 of these Disclosure Instructions. "Beneficial Owner" means any registered owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Bond Resolution" means collectively, the ordinances and the resolutions of the governing body of the Issuer authorizing the issuance of the Bonds. "CAFR" means the Issuer's Comprehensive Annual Financial Report. "Designated Agent" means Gilmore & Bell, P.C. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of these Disclosure Instructions. "Dissemination Agent" means any entity designated in wntlllg by the Issuer to serve as dissemination agent pursuant to these Disclosure Instructions and which has filed with the Issuer a written acceptance of such designation substantially in the form attached hereto as Exhibit B. A-I "EMMA" means the Electronic Municipal Market Access system for municipal secuntles disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Information" means the financial information of the Issuer described m Section 2(a)(J) hereof. "Fiscal Year" means the one year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units, as in effect at the time of the preparation of the Financial Information. "Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any of the events listed in Section 3(a) hereof. "MSRB" means the Municipal Securities Rulemaking Board. "Official Statement" means the Issuer's Official Statement for the Bonds. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the SEC Rule in connection with offering of the Bonds. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission ofthe United States. "SEC Rule" means Rule lSc2-12(b)(S) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 2. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ended in 2012, file with the Repository the Issuer's CAFR, which will contain the Financial Information and Operating Data (collectively, the "Annual Report"), as follows: (1) Financial Information. The financial statements of the Issuer for such prior Fiscal Year, accompanied by an audit report resulting from an audit conducted by an Independent Accountant in conformity with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all governmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accounting basis is contained in Appendix A to the Official Statement. If such audit report is not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain unaudited financial statements and the audit report and accompanying financial statements shall be filed in the same manner as the Almual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Information may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of A-2 such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as of the end of the Fiscal Year of substantially all of the information and data contained in the following sections of Appendix A to the Official Statement: (i) Debt Summary (ii) Tax Levies (iii) Assessed Valuation (iv) Estimated Actual Valuation (v) Tax Collections (vi) Largest Taxpayers. together with any material adverse changes 1ll the other portions of the section entitled "FINANCIAL INFORMATION." Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the MSRB via EMMA. The Issuer shall clearly identify each such other document so included by reference. In each . case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(b). (b) If no Dissemination Agent has been appointed, the Issuer shall file the Annual Report as specified by Section 2(a) hereof; or if the Annual Report is not filed within the time period specified in Section 2(a) hereof, the Issuer shall send a notice to each Repository in substantially the form attached as Exhibit A within 10 Business Days after the date the Annual Report is required to be filed as set forth herein. Section 3. Reporting of Material Events. (a) Pursuant to the provisions of this Section, the Issuer shall give, or cause the Dissemination Agent, if any, to give, to the Repository within 10 Business Days after the occurrence of any of the following events with respect to the Bonds, notice of the following events: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting fmancial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; A-3 (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or [mal detenninations of taxability, Notices of Proposed Issue (IRS Ponn 5701-TEB) or other material notices or deternlinations with respect to the tax status of the Bond, or other material events affecting the tax-exempt status ofthe Bonds; (7) modifications to rights of Owners, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer; (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the tennination of a definitive agreement relating to any such actions, other than pursuant to its tenns, if material; and (14) appointment of a successor or additional Paying Agent or the change of name of the Paying Agent, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. Section 4. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under these Disclosure Instructions, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. (b) Annual Reports. If a Dissemination Agent is appointed, not later than 15 Business Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemipation Agent or the Repository. The Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to these Disclosure Instructions, stating the date it was filed, or that the Issuer has certified to the Dissemination Agent that the Issuer has filed the Annual Report with the Repository. If the Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has ftled an Annual Report with the Repository, by the date required in Section 2(a) , the Dissemination Agent shall send a notice to the Repository in substantially the fonn attached as Exhibit A. (c) Material Event Notices. (1) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall A-4 designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) Whenever the Issuer obtains knowledge of the occurrence of an event, because of a notice from the Dissemination Agent pursuant to Section 4(c)(J) or otherwise, the Issuer shall promptly determine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent of such determination. If appropriate, such writing shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. (d) Duties, immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in these Disclosure Instructions, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or ill the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim ofliability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to these Disclosure Instructions. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to these Disclosure Instructions. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under these Disclosure Instructions shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as permitted in the Bond Resolution, such person shall be responsible for compliance with under these Disclosure Instructions in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3 (b) . Section 6. Amendment; Waiver. Notwithstanding any other provision of these Disclosure Instructions, the Issuer and the Dissemination Agent, if any, may amend of these Disclosure Instructions (and the Dissemination Agent shall not unreasonably refuse to execute any amendment so requested by the Issuer) and any provision of these Disclosure Instructions may be waived, provided that: (a) Bond Counselor other counsel experienced in federal securities law matters provides the Issuer and the Dissemination Agent, if any, with its opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current A-5 amendments thereto and interpretations thereof that are applicable to these Disclosure Instructions; (b) if the amendment or waiver relates to Sections 2(a) or 3(a), it may only be made in connection with a change in circumstances that arises from a change in law or legal requirements, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; and (c) the amendment or waiver is either (1) approved by the Owners of the Bonds in the same manner as provided in the Bond Resolution with consent of the Owners, or (2) does not in the opinion of Bond Counsel materially impair the interests of the Owners or Beneficial Owners of the Bonds. If there is an amendment or waiver of a provision of these Disclosure Instructions, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of Financial Information or Operating Data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (a) notice of such change shall be given in the same manner as for a Material Event under Section 3(h), and (b) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in these Disclosure Instructions shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in these Disclosure Instructions or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by these Disclosure Instructions. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by these Disclosure Instructions, the Issuer shall have no obligation under these Disclosure Instructions to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of these Disclosure Instructions, the Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under these Disclosure Instructions. Noncompliance with the provisions of these Disclosure Instructions shall not be deemed an Event of Default under the Bond Resolution, and the sole remedy under these Disclosure Instructions in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with these Disclosure Instructions shall be an action to compel performance. Section 9. Notices. Any notices or communications to or among any of the parties referenced in these Disclosure Instructions may be given as follows: (a) To the Issuer at: 300 West Ash Salina, Kansas 67402 Fax: (785)309-5738 Attention: Clerk A-6 (b) To the Participating Underwriter(s) at the address set forth in the Bond Resolutions or such other address as is furnished in writing to the other parties referenced herein. (c) To the Dissemination Agent at the address set forth on Exhibit B attached hereto. Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Section 11. Beneficiaries. These Disclosure Instructions shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, the Participating Underwriter and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 12. Severability. If any provision in these Disclosure Instructions, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13. Governing Law. These Disclosure Instructions shall be governed by and construed in accordance with the laws of the State of Kansas. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] A-7 CITY OF SALINA, KANSAS (SEAL) (Signature Page to Continuing Disclosure Instructions -2012-A&B Bonds) EXHIBIT A NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Name of Bond Issue: Name of Obligated Person: Date of Issuance: City of Salina, Kansas $2,365,000 General Obligation Internal Improvement Bonds, Series 2012-A and $3,785,000 General Obligation Refunding Bonds, Series 2012-B, dated as of July 15, 2012 City of Salina, Kansas July 26,2012 NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Instructions dated as of July 26, 2012. The Issuer anticipates that the Annual Report will be filed by ________ _ Dated: --------------CITY OF SALINA, KANSAS By ______________________ _ By ______________ ,as Dissemination Agent cc: City of Salina, Kansas A-I Name of Issuer: Name of Bond Issue: Dissemination Agent: EXHIBITB ACCEPTANCE OF DISSEMINATION AGENT City of Salina, Kansas $2,365,000 General Obligation Internal Improvement Bonds, Series 2012-A and $3,785,000 General Obligation Refunding Bonds, Series 2012-B, dated as of July 15, 2012 Notice Address of Dissemination Agent: _---,--_----::-________ ' having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Continuing Disclosure Instructions to which this acceptance is attached, accepts such duties and responsibilities set forth therein. Dated: FEDERAL TAX CERTIFICATE Dated as of July 26, 2012 OF CITY OF SALINA, KANSAS $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Section 1.01 Section 2.01 Section 2.02 Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Section 3.09 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section 5.01 Section 5.02 Section 5.03 Section 5.04 Section 5.05 Section 5.06 Section 5.07 FEDERAL TAX CERTIFICATE TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Tenns .............................................................................. ...... 1 ARTICLE n GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer ................................................................ 7 Continuing Application of Representations and Covenants ........................................ 10 ARTICLE In ARBITRAGE CERTIFICATIONS AND COVENANTS General. ............................................................... ........................................................ 10 Reasonable Expectations ............................................................................................. 1 0 Purpose of Financing ................................................................................................... 1 0 Funds and Accounts ............................. : ....................... ................................................ 11 Amount and Use of Bond Proceeds and Other Money ................................................ l1 Multipurpose Issue ............................ .......................................................................... 12 Refunding ............................................................................................................... ..... 12 Completion of Financed Improvements ...................................................................... 13 Sinking Funds .................................................................. ............................................ 13 Reserve, Replacement and Pledged Funds .................................................................. 13 Purpose Investment yield ............................................................................................ 13 Offering Prices and Yield on Bonds .................................................................... ........ 13 Miscellaneous Arbitrage Matters ................................................................................ 14 Conclusion ............................................................ ....................................................... 14 ARTICLE IV TAX COMPLIANCE POLICIES AND PROCEDURES General. ................................................................................. ...................................... 14 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements .......... .15 Restrictions on Investment Yield ....................................... ......................................... 15 Procedures for Establishing Fair Market Value of Investments .................................. 16 Certain Gross Proceeds Exempt from the Rebate Requirement. ................................. 1 g Computation and Payment of Arbitrage Rebate .......................................................... 19 ARTICLE V MISCELLANEOUS PROVISIONS Tenn of Tax Certificate ............................................................................................... 20 Amendments ...................................................... .......................................................... 20 Opinion of Bond CounseL ........................................................................................... 21 Reliance ....................................................................................................................... 21 Severability ............................................................... ................................................... 21 Benefit of Certificate ................................................................................................... 21 Default, Breach and Enforcement. .............................................................................. 21 (i) Section 5.08 Governing Law ............................................................................................................ 21 Section 5.09 Electronic Transactions ....................... ........................................................................ 21 LIST OF EXHIBITS TO FEDERAL TAX CERTIFICATE A. IRS FORM 8038-G Schedule -Attachment to Fonn 8038-G Evidence of filing B. RECElPT FOR-PURCHASE PRICE C. RECElPT AND REPRESENTATION D. DESCRIPTION OF FINANCED IMPROVEMENTS; FINAL ALLOCATION Schedule -Attachment to Final Allocation E. SAMPLE ANNUAL COMPLIANCE CHECKLIST F. ALLOCATION OF BONDS -MULTlPURPOSE ISSUE Schedule 1 Debt Service Schedule and Proof of Yield *** (ii) FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the :'Tax Certificate") is executed as of July 26,2012 (the "Issue Date"), by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Tax Certificate is being executed and delivered in connection with the issuance by the Issuer of $2,365,000 principal amount of General Obligation Internal Improvement Bonds, Series 2012-A (the "Series 2012-A Bonds") and $3,785,000 General Obligation Refunding Bonds, Series 2012-B (the "Series 2012-B Bonds," and together with the Series 2012-A Bonds, the "Bonds"), under the Bond Resolutions (as herein defined), for the purposes described in this Tax Certificate and in the Bond Resolutions. 2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Bond proceeds and of certain other money relating to the Bonds and set forth the conditions under which the interest on the Bonds will be excluded from gross income for federal income tax purposes. 3. The Issuer is executing this Tax Certificate in order to set forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the property financed or refinanced with those proceeds and the investment of the Bond proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes and to provide guidance for complying with the arbitrage rebate provisions of Code § 148(f). 4. The Issuer adopted a Tax and Securities Compliance Procedure on June 11, 2012 (the "Tax Compliance Procedure") for the purpose of setting out general procedures for the Issuer to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. This Tax Certificate is entered into as required by the Tax Compliance Procedure to set out specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Certificate, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Bond Resolutions, and certain other words and phrases have the meanings assigned in Code §§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: 1 "Adjusted Gross Proceeds" means the Gross Proceeds of the Project Portion or the Current Refunding Portion, as applicable, reduced by allocable amounts: (a) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund; (b) that as of the Issue Date, are not expected to be Gross Proceeds, but which arise after the end ofthe applicable spending period; and (c) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Advance Refunding Portion" means the sale proceeds of the Series 2012-B Bonds identified in Section 3.06, together with the remaining Gross Proceeds of the Series 2012-B Bonds properly allocable to the refunding of the Refunded Series 2003-ABonds and the Refunded Series 2005-ABonds. "Annual Compliance Checklist" means a checklist for each of the Financed Improvements designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date as further described in Section 4.02 and substantially in the form attached as Exhibit E. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) one-twelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. "Bond" or "Bonds" means any bond or bonds of the Series 20 12-A Bonds or the Series 2012-:8 Bonds described in the recitals, authenticated and delivered under the Bond Resolutions. "Bond Compliance Officer" means the Issuer's Director of Finance and Administration or other person named in the Tax Compliance Procedure . . "Bond Counsel" means Gilmore & Bell, P.C., or other firm of nationally recognized bond counsel acceptable to the Issuer. "Bond Resolutions" means, with respect to the Series 2012-A Bonds, Ordinance No. 12-10642 and Resolution No. 12-6917 and, with respect to the Series 2012-B Bonds, Ordinance No. 12-10644 and Resolution No. 12-6918, duly adopted by the governing body of the Issuer on July 9, 2012, as originally executed by the Issuer, as amended and supplemented in accordance with the provisions of the applicable Bond Resolution. "Bond Year" means each one-year period (or shorter period for the first Bond Year) ending October 1 or another one-year period selected by the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date on which arbitrage rebate for the Bonds is computed. The Issuer may treat any date as a Computation Date, subject to the following limits: (a) The first rebate installment payment must be made for a Computation Date not later than 5 years after the Issue Date; (b) Each subsequent rebate installment payment must be made for a Computation Date not later than 5 years after the previous Comput,ation Date for which an installment payment was made; and 2 (c) The date the last Bond is discharged is the final Computation Date. The Issuer selects October 1, 2016 as the first Computation Date but reserves the right to select a different date consistent with the Regulations. "Current Refunding Portion" means the sale proceeds of the Series 2012-B Bonds identified in Section 3.06 together with the remaining Gross Proceeds of the Series 2012-B Bonds properly allocable to the refunding of the Refunded Series 2004-B Bonds. "Escrow Agent" means UMB National Bank of America, as escrow agent under the Escrow Agreement, and its successors and assigns. "Escrow Agreement" means the Escrow Trust Agreement, dated as of July 15, 2012, between the Issuer and the Escrow Agent, as amended and supplemented in accordance with the provisions thereof. "Escrow Fund" means the Escrow Fund for General Obligation Internal hnprovement Bonds, Series 2003-A, General Obligation Internal hnprovement Bonds, Series 2004-B, and General Obligation Internal hnprovement Bonds, Series 2005-A, established under the Escrow Agreement. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate. "Financed Improvements" means the portion of the hnprovements fmanced or refinanced with the proceeds of the Bonds as described in the Bond Resolutions and by the Original Obligations, all as described on Exhibit D. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Bonds, including amounts used to pay underwriting discount or fees, but excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds or other Investment proceeds), (c) any amounts held in a sinking fund for the Bonds, (d) any amounts held in a pledged fund or reserve fund for the Bonds, (e) any other replacement proceeds and (f) any transferred proceeds. Specifically, the term Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1) hnprovement Fund; (2) Escrow Fund; (3) Debt Service Accounts (for Series 2012-ABonds and for Series 2012-B Bonds); (4) Rebate Fund (for Series 2012-A Bonds and for Series 2012-B Bonds) to the extent funded with sale proceeds or Investment proceeds of the Bonds; (5) Costs ofIssuance Account. "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on two or more future dates (e.g., a forward supply contract). 3 "Improvements" means all of the property acquired, developed, constructed, renovated, and equ~pped by the Issuer using proceeds of the Bonds or the Original Obligations and other money contributed by the Issuer, as described on Exhibit D. "Investment" means any security, obligation, annuity contract or other investment-type property that is purchased directly with, or otherwise allocated to, Gross Proceeds. This term does not include a tax-exempt bond, except for "specified private activity bonds" as defined in Code § 57(a)(5)(C), but does include the investment element of most interest rate caps. "IRS" means the United States Internal Revenue Service. "Issue Date" means July 26, 2012. "Issuer" means the City of Salina, Kansas, and its successors and assigns, or any body, agency or instrumentality of the State succeeding to or charged with the powers, duties and functions of the Issuer. "Management Agreement" means a legal agreement defined in Regulations § 1.141-3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or a portion of any function of the Financed Improvements, such as a contract to manage the entire Financed Improvements or a portion of the Financed Improvements. However, contracts for services that are solely incidental to the primiuy governmental function of the Financed Improvements (for example, contracts for janitorial, office equipment repair, billing, or similar services) are not treated as Management Agreements. "Measurement Period" means the period beginning on the later of (a) the applicable issue date of the Original Obligations or (b) the date the property was or will be placed in service, and ending on the earlier of (1) the final maturity date ofthe Bonds or (2) the expected economic useful life of the property. "Minor Portion" means the lesser of $1 00,000 or 5% of the sale proceeds of the Bonds. "Net Proceeds" means, when used in reference to the Bonds, the sale proceeds of the Bonds (excluding pre-issuance accrued interest), less any proceeds deposited in a reasonably required reserve or replacement fund, plus all Investment earnings on such sale proceeds. "Non-Qualified Use" means use of Bond proceeds or the Financed Improvements in a trade or business carried on by any Non-Qualified User. The rules set out in Regulations § 1.141-3 determine whether Bond proceeds or the Financed Improvements are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement with respect to the Financed Improvements, will constitute use under Regulations § 1.141-3. "Non-Qualified User" means any person or entity other than a Qualified User. "Opinion of Bond Counsel" means the written opinion of Bond Counsel to the effect that the proposed action or the failure to act will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. "Original Obligations" means the following debt obligations of the Issuer, which were the initial issues of tax-exempt governmental obligations that financed or refinanced a portion of the Financed Improvements: (a) the Series 2011-1 Notes, (b) the Series 2003 Bonds (including temporary notes refinanced by the Series 2003-A Bonds), (c) the Series 2004-B Bonds (including temporary notes 4 refinanced by the Series 2004-B Bonds) and (d) the Series 2005-A Bonds (including temporary notes refinanced by the Series 200S-A Bonds). "Output Contract" is defmed in Regulations § 1.141-7 and generally includes any contract with a Non-Qualified Usetthat provides for the purchase ofihe output of Financed Improvements. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Bonds, the use of the Financed Improvements and the investment of Gross Proceeds after the Issue Date of the Bonds. "Preliminary Expenditures" means, with respect to each issue compnsmg the Original Obligations: (a) costs incurred for architectural, engineering, surveying, soil testing, costs of issuance, and similar costs prior to commencement of acquisition, construction, or rehabilitation of the Financed Improvements, other than land acquisition, site preparation, and similar costs incident to commencement of construction of the Financed Improvements up to an amount not in excess of 20% of the sale proceeds of such issue of Original Obligations; and (b) costs incurred in an amount not in excess of the lesser of $100,000 or 5% of the sale proceeds of such issue comprising of Original Obligations. "Project Portion" means the sale proceeds of the Series 2012-A Bonds identified in Section 3.06, together with the remaining Gross Proceeds of the Bonds properly allocable to the refunding of the Refunded Series 2011-1 Notes. "Proposed Regulations" means the proposed arbitrage regulations REG 106143-07 (published at 72 Fed. Reg. 54606 (Sept. 26, 2007)). "Purchaser" means UMB Bank, N.A, Kansas City, Missouri, the original purchaser of the Bonds, and any successor and assigns. "Qualified Use Agreement" means any of the following: (a) A lease or other short-term use by members of the general public who occupy the Financed Improvements on a short-term basis in the ordinary course of the Issuer's governmental purposes. (b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Improvements under the same or similar arrangements is predominantly by natural person.s who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Improvements was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any 5 portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Improvements, was not constructed for a principal purpose of providing the property for use by that person. "Qualified User" means a state, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality ofthe United States. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor rebate analyst selected pursuant to this Tax Certificate. "Refunded Obligations" means, collectively, the Refunded Series 2003-A Bonds, the Refunded Series 2005-ABonds, the Refunded Series 2004-B Bonds and the Refunded Series 2011-1 Notes. "Refunded Series 2003-ABonds" means $1,125,000 principal amount of the outstanding Series 2003-ABonds maturing in the years 2014 through 2018, inclusive. "Refunded Series 2004-B Bonds" means $1,010,000 principal amount of the outstanding Series 2004-B Bonds maturing in the years 2013 through 2019, inclusive. "Refunded Series 2005-A Bonds" means $1,535,000 principal amount of the outstanding Series 2005-A Bonds maturing in the years 2014 through 2020, inclusive. "Refunded Series 2011-1 Notes" means that portion of the Series 2011-1 Notes refunded by the Series 2012-ABonds. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code §§ 103 and 141 through 150 and applicable to the Bonds. .. "Series 2003-A Bonds" means the Issuer's General Obligation Internal Improvement Bonds, Series 2003-A, issued in the original principal amount of $4,350,000, of which $1,765,000 principal amount remains outstanding. "Series 2004-B Bonds" means the Issuer's General Obligation Internal Improvement Bonds, Series 2004-B, issued in the original principal amount of $4,053,000, of which $1,010,000 principal amount remains outstanding. "Series 2005-A Bonds" means the Issuer's General Obligation Internal Improvement Bonds, Series 2005-A, issued in the original principal amount of $4,210,000, of which $2,200,000 principal amount remains outstanding. "Series 2011-1 Notes" means the Issuer's General Obligation Temporary Notes, Series 2011-1, dated July 15, 2011. "Series 2012-A Bonds" means the Issuer's General Obligation Internal Improvement Bonds, Series 20l2-A, dated July 26,2012. 6 "Series 2012-B Bonds" means the Issuer's General Obligation Refunding Bonds, Series 2012-B, dated July 26,2012. "State" means the State of Kansas. "Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and . supplemented in accordance with its terms. "Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and Procedure, dated June 11,2012, as amended and supplemented in accordance with the terms of the Tax Compliance Procedure. "Tax-Exempt Bond File" means documents and records for the Bonds and the Original Obligations, maintained by the Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Bonds. "Verification Report" means the verification report of Robert Thomas CPA, LLC, Certified Public Accountants, relating to the Bonds and the Refunded Obligations. "Yield" means yield on the Bonds, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations § 1.148-5. ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.01 Representations and Covenants of the Issuer. The Issuer represents and covenants as follows: (a) Organization and Authority. The Issuer: (1) is a city of the first class, duly created, organized and existing under the Constitution and laws of the State, (2) has lawful power and authority to issue the Bonds for the purposes set forth in the Bond Resolutions, to enter into, execute and deliver the Bond Resolutions, the Bonds, and this Tax Certificate and to carry out its obligations under this Tax Certificate and under such documents, and (3) by all necessary action has been duly authorized to execute and deliver the Bond Resolutions, the Bonds, and this Tax Certificate, acting by and through its duly authorized officials. (b) Tax-Exempt Status of Bonds-General Covenant. The Issuer (to the extent within its power or direction) will not use any money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other source, in a manner that would cause the Bonds to be "arbitrage bonds," within the meaning of Code § 148, and will not (to the extent within its power or direction) otherwise use or permit the use of any Bond proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Bonds to be included in gross income for federal income tax purposes. 7 (c) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: (1) all of the Financed Improvements have been and are expected to be owned by the Issuer or another Qualified User; (2) no portion of the Financed Improvements has been or is expected to be used in a NonQualified Use; and (3) the Issuer will not permit any Non-Qualified Use of the Financed Improvements without first obtaining an Opinion of Bond Counsel. (d) Governmental Obligations-Private Security or Payment. As of the Issue Date, the Issuer expects that none of the principal of and interest on the Bonds will be, and the payment of principal of and interest on the Original Obligations has been, (under the terms of the Bonds or any underlying arrangement) directly or indirectly: (1) Secured by (i) any interest in property used or to be used for a private business use, or (B) any interest in payments in respect of such property; or (2) Derived from payments (whether or not such payments are made to the Issuer) in respect of property, or borrowed money, used or to be used for a private business use. For purposes of the foregoing, taxes of general application, including payments in lieu of taxes, are not treated as private payments or as private security. The Issuer will not permit any private security or payment with respect to the Bonds without first obtaining an Opinion of Bond Counsel. (e) No Private Loan, Special Assessments. Not more than 5% of the Net Proceeds of the, Bonds will be loaned directly or indirectly to any Non-Qualified User. The payment of principal of and interest on the Bonds will be funded, and the payment of principal of and interest on the Original Obligations has been funded, in whole or in part from mandatory special assessments against the property benefiting from the Financed Improvements. The use of the proceeds of the Bonds and the Original Obligations is not treated as a "loan" because: (1) the special assessments are enforced contributions for the purpose of raising revenue for specific capital improvements; (2) the assessments do not include any fee for services; (3) the imposition and collection of the assessments is not dependent upon, and does not vary depending on, whether the taxpayer engaged, or the property is used, in a trade or business; (4) the assessments are imposed to pay for an essential governmental function; and (5) the terms of payment of the assessments are the same for all owners of property benefitting from the Improvements on which the assessments are imposed. (f) Management Agreements. As of the Issue Date, the Issuer has no Management Agreements with Non-Qualified Users. During the Measurement Period, the Issuer will not enter into or renew any Management Agreement with any Non-Qualified User without first obtaining an Opinion of Bond Counsel. (g) Leases. As of the Issue Date, the Issuer has not entered into any leases of any portion of the Financed Improvements other than Qualified Use Agreements. During the Measurement Period, the Issuer will not enter into or renew any lease or similar agreement or arrangement other than a Qualified Use Agreement without first obtaining an Opinion of Bond Counsel. (h) Output Contracts. As of the Issue Date, the Issuer does not have any Output Contract. During the Measurement Period, the Issuer will not enter into any Output Contract without first obtaining an Opinion of Bond Counsel. (i) Limit on Maturity of Bonds. A list of the assets included in the Financed Improvements and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Bonds of 5.704 years, as 8 computed by Bond Counsel, does not exceed 120% of the average reasonably expected economic life of the Financed hnprovements. (j) Reimbursement of Expenditures; Official Intent. The governing body of the Issuer· adopted several resolutions declaring the intent of the Issuer to fmance the Financed hnprovements with tax-exempt bonds and to reimburse the Issuer for expenditures made for the Financed hnprovements prior to the issuance of those bonds. The resolutions are contained in the transcripts for the Original Obligations. Except for Preliminary Expenditures or as otherwise described in the federal tax certificate or similar document for the Original Obligations, no proceeds of the Original Obligations were used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the applicable resolution . was adopted, no reimbursement allocation has been or will be made for an expenditure made more than 3 years before the date of the reimbursement allocation, and no reimbursement allocation has been or will be made more than 18 months following the later of the date of the expenditure or the date that portion of the Financed hnprovements was placed in service. (k) Registered Bonds. The Bond Resolutions require that all of the Bonds will be issued and held in registered form within the meaning of Code § 149( a). (1) Bonds Not Federally Guaranteed. The Issuer will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code § 149(b). (m) IRS Form 8038-G. Bond Counsel will prepare IRS Fonn 8038-G (Information Return for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038-G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of filing will be included in Exhibit A of Tax Certificate. (n) Hedge Bonds. At least 85% of the Net Proceeds (the sale proceeds less any sale proceeds invested in a reserve fund) of each issue comprising the Original Obligations were used to carry out the governmental purpose of the Original Obligations within 3 years after the applicable issue date thereof, and not more than 50% of the proceeds of each issue comprising the Original Obligations were invested in Investments having a substantially guaranteed Yield for four years or more. (0) Single Issue; No Other Issues. The Bonds constitute a single "issue" under Regulations § l.150-1(c). No other debt obligations of the Issuer: (1) are being sold within 15 days of the sale of the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid . from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). For purposes ofthe foregoing, the Issuer sold and issued its General Obligation Temporary Notes, Series 2012-1 simultaneously with the Bonds, but the Series 2012-1 Notes are not expected to be paid from substantially the same source of funds as the Bonds, and therefore are not part of the same "issue" as the Bonds under Regulations § 1.150-1(c). A separate Federal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance of the Series 2012-1 Notes. (p) Interest Rate Swap. As of the Issue Date, the Issuer has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Bonds. The Issuer will not enter into any such arrangement in the future without obtaining an Opinion of Bond Counsel. 9 (q) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enter into a Guaranteed Investment Contract for any Gross Proceeds of the Bonds. The Issuer will be responsible for complying with Section 4.04(d) hereof if it decides to enter into a Guaranteed Investment Contract at a later date. (r) Bank Qualified Tax-Exempt Obligation. The Issuer designates the Bonds as "qualified tax-exempt obligations" under Code § 265(b)(3), and with respect to this designation certifies as follows: (1) the Issuer reasonably anticipates that the amount oftax-exempt obligations (other than (A) private activity bonds that are not qualified 501(c)(3) bonds and (B) current refunding bonds to the extent not exceeding the refunded bonds) that will be issued by or on behalf of the Issuer (and all subordinate entities of the Issuer) during the calendar year that the Bonds are issued, including the Bonds, will not exceed $10,000,000; and (2) the Issuer (including all subordinate entities of the Issuer) will not issue taxexempt obligations (other than (A) private activity bonds that are not qualified 501(c)(3) bonds and (B) current refunding bonds to the extent not exceeding the refunded bonds) during the calendar year that the Bonds are issued, including the Bonds, in an aggregate principal amount or aggregate issue price in excess of $10,000,000, without first obtaining an Opinion of Bond Counsel that the designation of the Bonds as "qualified tax-exempt obligations" will not be adversely affected. Section 2.02 Continuing Application of Representations and Covenants. All representations, covenants and certifications contained in this Tax Certificate or in any certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution and delivery of such documents and the issuance of the Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Bonds. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.01 General. The purpose of this Article is to certify, under Regulations § 1.148-2(b), the Issuer's expectations as to the sources, uses and investment of Bond proceeds and other money, in order to support the Issuer's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Bonds. Section 3.02 Reasonable Expectations. The facts, estimates and expectations set forth in this Article are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.03 Purpose of Financing. The Bonds are being issued for the purpose of providing funds to pay a portion of the costs of refunding the Refunded Obligations. The purpose of the Series 10 2012-A Bonds is provide permanent financing for certain of the Financed Improvements originally financed by the Series 2011-1 Notes, and the purpose of the Series 2012-B Bonds is to refund the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds in order to achieve interest cost savings through early redemption thereof. Section 3.04 Funds and Accounts. The following funds and accounts have been established under the Bond Resolutions: (a) Improvement Fund. (b) Debt Service Accounts (for Series 2012-ABonds and for Series 2012-B Bonds). (c) Rebate Fund (for Series 2012-ABonds and for Series 20l2-B Bonds). In addition to the Funds and Accounts described above, the Escrow Agreement establishes the following funds and accounts to be held and administered by the Escrow Agent in accordance with the provisions of the Escrow Agreement: (a) Escrow Fund. (b) Costs of Issuance Account. Section 3.05 Amount and Use of Bond Proceeds and Other Money. (a) Amount of Bond Proceeds. The total proceeds to be received by the Issuer from the sale of the Bonds are as evidenced in Exhibit B attached to this Tax Certificate. (b) Use of Series 2012-A Bond Proceeds and Other Money. The Series 2012-A Bond proceeds and other money contributed by the Issuer are expected to be allocated to expenditures as follows: (1) All accrued interest ($1,242.85) will be deposited in the 2012-A Debt Service Account and allocated to pay interest on the Series 2012-ABonds. (2) The sum of $2,365,000.00 will be deposited in the Improvement Fund, of which $23,735.80 will be used to pay costs of issuing the Series 2012-A Bonds, and the balance of $2,341,264.20, along with other amounts contributed by the Issuer (consisting of $664,452.1 0 from prepayments on special assessment and $408,488.14 from the debt service account for the Series 2011-1 Notes), will be paid and transferred to the paying agent for the Refunded Series 2011-1 Notes, with irrevocable instructions to apply such amount to the payment of the Refunded Series 2011-1 Notes. (c) Use of Series 2012-B Bond Proceeds and Other Money. The Series 2012-B Bond proceeds and other money contributed by the Issuer are expected to be allocated to expenditures as follows: (1) All accrued interest ($1,200.15) will be deposited in the 2012-B Debt Service Account and allocated to pay interest on the Series 2012-B Bonds. (2) The sum of $38,884.04 will be deposited in the Costs of Issuance Account and used to pay costs of issuing the Series 2012-B Bonds. 11 (5) The sum of $3,761,587.39, along with $67,372.50 from the debt service accounts for the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds, will be transferred to the Escrow Agent for deposit in the Escrow Fund to be applied as provided in the Escrow Agreement to pay the principal of and interest on the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds through and including the respective redemption dates thereof. Section 3.06 Multipurpose Issue. The Issuer is applying the arbitrage rules to separate financing purposes of the issue that have the same initial temporary period as if they constitute a single issue for purposes pursuant to Regulations § 1. 148-9(h)(3)(i). Under Regulations § 1. 148-9(h), the Bonds will be treated as three separate issues (an Advance Refunding Portion, a Current Refunding Portion and a Project Portion) for purposes of applying certain of the arbitrage restrictions under Code § 148. Pursuant to the debt-service-savings allocation method under Regulations § 1.148-9(h)(4)(v)(B) and as shown on Exhibit F attached to this Tax Certificate, the Series 2012-B Bonds are allocated to the Advance Refunding Portion and the Current Refunding Portion, and the Series 2012-A Bonds are allocated to the Project Portion. Section 3.07 Refunding. (a) Escrow Fund. The remaining debt service requirements on the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds are set forth in the Verification Report. Money in the Escrow Fund aggregating $3,828,954.00 will be used to purchase United States Treasury Securities (the "Escrowed Securities,") as described in the Verification Report, and $5.89 will be held uninvested as the initial cash balance in the Escrow Fund. The maturing principal of and interest on the Escrowed Securities and the initial cash deposit in the Escrow Fund will be expended to pay principal of and interest on the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds. (1) Allocation of Sources to Investments. In addition to Bond proceeds, other money deposited in the Escrow Fund was derived from the debt service accounts for the Refunded Series 2003-A Bonds, the Refunded Series 2005-A Bonds and the Refunded Series 2004-B Bonds. As shown in the Verification Report, these amounts have been allocated to the earliest maturing Escrowed Securities in the Escrow Fund. (2) Yield On The Escrowed Securities. The Yield on the Escrowed Securities purchased with Bond proceeds (0.18335%) does not exceed the Yield on the Bonds (1.39895%), and the Yield on the Escrowed Securities allocable to other money does not exceed the Yield on the respective series of Refunded Obligations from which derived, all as shown in the Verification Report. (3) Market Prices. All of the Escrowed Securities are United States Treasury Securities State and Local Government Series purchased directly from the United States Treasury. (b) Advance Refunding -Refunded Series 2003-A Bonds; Refunded Series 2005-A Bonds (1) Limit on Number of Advance Refunding Issues. The issuance of the Advance Refunding Portion constitutes the first advance refunding of the Refunded Series 2003-A Bonds and the Refunded Series 2005-A Bonds. 12 (2) No Transferred Proceeds; Series 2003-A Bonds, Series 2005-A Bonds. There are no unspent proceeds (sale proceeds, Investment proceeds or transferred proceeds) of the Series 2003-A Bonds or the Series 2005-A Bonds, and therefore no transferred proceeds of the Advance Refunding Portion. (c) Current Refunding-Refunded Series 2004-B Bonds (1) Refunded Series 2004-B Bonds. Proceeds of the Current Refunding Portion will be used to pay principal of and interest on the Refunded Series 2004-B Bonds. All such proceeds shall be spent not later than 90 days after the Issue Date. (2) Refunded Series 2011-1 Notes. Proceeds of the Series 2012-A Bonds will be used to pay principal of and interest on the Refunded Series 2011-1 Notes. All such proceeds shall be spent not later than 90 days after the Issue Date. (3) No Transferred Proceeds; Series 2004-B Bonds, Series 2011-1 Notes. There are no unspent proceeds (sale proceeds, Investment proceeds or transferred proceeds) of the Series 2004-B Bonds or the Series 2011-1 Notes, and therefore no transferred proceeds of the Current Refunding Portion or the Series 2012-A Bonds. (d) Excess Gross Proceeds. There will be no "excess gross proceeds" of the Bonds (within the meaning of Regulations § 1.148-10(c». Section 3.08 Completion of Financed Improvements. The Financed Improvements have previously been completed. Section 3.09 Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Bonds. Such payments will be deposited into the Debt Service Accounts. Except for the Debt Service Accounts, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds has been established or is expected to be established. The Debt Service Accounts are used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Issuer expects that the Debt Service Accounts will qualify as a Bona Fide Debt Service Fund. Section 3.10 Reserve, Replacement and Pledged Funds. (a) No Reserve Fund. No reserve fund has been or will be established for the Bonds. (b) No Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements, and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt Service Accounts, there are no other funds pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Bonds if the Issuer encounters financial difficulty. Section 3.11 Purpose Investment Yield. The proceeds of the Bonds will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.12 Offering Prices and Yield on Bonds. 13 (a) Offering Prices. On Exhibit C, the Purchaser has certified that (1) all of the Bonds have been the subject of an initial offering to the public at prices no higher than those shown on such Exhibit C, plus accrued interest (the "Offering Prices"); and (2) the Purchaser expects that at least 10% of the Bonds of each maturity will be sold to the public at initial offering prices no higher than said Offering Prices. The aggregate initial offering price of the Bonds is $6,201,010.55, plus $2,443.00 of accrued interest. (b) Bond Yield. Based on the Offering Prices, the Yield on the Bonds is 1.39895%, as shown in the Verification Report. The Issuer has not entered into an interest rate swap agreement with respect to any portion of the proceeds of the Bonds. Section 3.13 Miscellaneous Arbitrage Matters. (a) No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between taxexempt and taxable interest rates to gain a material fmancial advantage, and (2) overburdening the taxexempt bond market. (b) No Over-Issuance. The sale proceeds of the Bonds, together with expected Investment earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Bonds as described above. Section 3.14 Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Certificate, the Issuer does not expect that the Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code § 148 and the Regulations. ARTICLE IV TAX COMPLIANCE POLICIES AND PROCEDURES Section 4.01 General. (a) Purpose of Article. The purpose of this Article is to supplement the Tax Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Issuer recognizes that interest on the Bonds will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post-Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with taxexempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to the Post-Issuance Tax Requirements that the Issuer has established or establishes in the future. The provisions of this Tax Certificate are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern. 14 (c) Future Action. The Issuer will, when necessary to fulfill the Post-Issuance Tax Requirements, sign Form 8038-T in connection with the payment of arbitrage rebate or yield reduction payments, participate in any federal income tax audit of the Bonds or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a remedial action procedure pursuant to Regulations § 1.141-12. In each case, all costs and expenses incurred by the Issuer shall be treated as a reasonable cost of administering the Bonds and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Bond Resolutions or State law. Section 4.02 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements. (a) Record ](eeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File for the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of the Bonds or any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (1) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (2) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (3) exhibit a high degree of legibility and readability both electronically and in hardcopy, (4) provide support for other books and records of the Issuer and (5) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Issuer's premises. (b) Accounting and Allocation of Bond Proceeds to Expenditures. The Bond Compliance Officer will account for the investment and expenditure of proceeds of the Bonds and the Original Obligations in the level of detail required by the Tax Compliance Procedure. Bond proceeds and other money contributed by the Issuer are expected to be used as described in Sections 3.05 and 3.07 hereof. The Bond Compliance Officer will maintain accounting records showing the investment and expenditure of this money as part of the Tax-Exempt Bond File. The Bond Compliance Officer has prepared written substantiation records of the allocation of proceeds of the Original Obligations to the Financed Improvements through requisitions from the improvement funds established under the bond resolutions for the Original Obligations. This allocation is summarized on Exhibit D and is intended to constitute the final allocation of proceeds of the Original Obligations to expenditures for the Financed Improvements. (c) Annual Compliance Checklist. Attached as Exhibit E is a sample Annual Compliance Checklist for the Bonds. The Bond Compliance Officer will prepare and complete one or more Annual Compliance Checklists for the Financed Improvements at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer will take the actions identified in an Opinion of Bond Counselor Section 4.4 of the Tax Compliance Procedure to correct any deficiency. (d) Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining and delivering to the Issuer any Opinion of Bond Counsel required under the provisions of this Tax Certificate or the Annual Compliance Checklist. Section 4.03 Restrictions on Investment Yield. Except as described below, Gross Proceeds must not be invested at a Yield greater than the Yield on the Bonds: 15 (a) Improvement Fund; Current Refunding. Series 2012-A Bond proceeds deposited in the Improvement Fund allocable to a current refunding of the Refunded Series 2011-1 Notes may be invested without Yield restriction for 90 days after the Issue Date. (b) Escrow Fund; Current Refunding. Series 2012-B Bond proceeds deposited in the Escrow Fund allocable to a current refunding of the Refunded Series 2004-B Bonds may be invested without Yield restriction for up to 90 days after the Issue Date. (c) Escrow Fund; Advance Refunding. Series 2012-B Bond proceeds deposited in the Escrow Fund allocable to an advance refunding of the Refunded Series 2003-ABonds and the Refunded Series 2005-A Bonds are being invested at a Yield less than the Yield on the Bonds. (d) Cost of Issuance Account. Bond proceeds deposited in the Cost of Issuance Account and Investment earnings on those proceeds may be invested without Yield restriction for 13 months after the Issue Date. (e) Debt Service Accounts. To the extent that the Debt Service Accounts qualify as a Bona Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for 1 year after the date of receipt of such earnings. (f) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. Section 4.04 Procedures for Establishing Fair Market Value of Investments. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with Regulations § 1.148-5. (b) Established Securities Market. Except for Investments purchased for a yield-restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code § 1273), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using one of the paragraphs below. The fair market value of Investments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations § 1.148-5. (c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. (d) Guaranteed Investment Contracts. The Issuer is applying Regulations § 1.148-5(d)(6)(iii)(A) as amended by the Proposed Regulations (relating to electronic bidding of Guaranteed 16 Investment Contracts) to the Bonds. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: (A) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (B) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the yield or the cost of the Guaranteed Investment Contract. (C) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (i) that the potential provider did not consult with any other potential provider about its bid, (ii) that the bid was determined without regard to any other formal or infOlmal agreement that the potential provider has with the Issuer, or any other person (whether or not in connection with the bond issue), and (iii) that the bid is not being submitted solely as a courtesy to the Issuer, or any other person, for purposes of satisfying the requirements of the Regulations. (D) The tenns of the bid specifications are "commercially reasonable." A tenn is commercially reasonable if there is a legitimate business purpose for the tenn other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (E) The tenns of the solicitation take into account the Issuer's reasonably expected deposit and draw-down schedule for the amounts to be invested. (F) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (G) At least 3 "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of investments being purchased. (2) Bids Received. The bids received by the Issuer must meet all of the following requirements: (A) The Issuer receives at least 3 bids from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (i) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the issue date of the issue, (ii) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers 17 has a material financial interest in the issue, and (iii) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (B) At least 1 of the 3 bids received is from a reasonably competitive provider, as defined above. (C) If the Issuer uses an agent or broker to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. (3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. (5) Records. The Issuer retains the following records with the bond documents until 3 years after the last outstanding Bond is redeemed: (A) A copy of the Guaranteed Investment Contract. (B) The receipt or other record of the amount actually paid by the Issuer for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Issuer, and the certification as to fees paid, described in paragraph (d)( 4) above. (C) For' each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (D) The bid solicitation form and, if the terms of the Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: (1) At least 3 bids on the Investment must be received from persons with no financial interest in the Bonds (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.05 Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. A portion of the Gross Proceeds of the Bonds may be exempt from rebate pursuant to one or more ofthe following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Bonds and will not otherwise affect the application of the Investment limitations described in Section 4.03. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4.06 applies even if a portion of the Gross Proceeds of the Bonds is exempt from the rebate requirement. To the extent all or a portion of the Bonds is exempt from rebate, the Rebate Analyst may account for such fact in connection with its preparation of a rebate report 18 described in Section 4.06. The Issuer may defer the final rebate Computation Date and the payment of rebate for the Bonds to the extent permitted by Regulations §§ 1.1 48-7(b )(1) and l.l48-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. The following optional rebate spending exceptions can separately apply to the Project Portion, the Advance Refunding Portion and the Current Refunding Portion: (1) Project Portion: 6-month spending exception JCode § l48(f)(4)(B) and Regulations § 1.148-7(c)). (2) Current Refunding Portion: 6-month spending exception (Code § 148(f)(4)(B) and Regulations § 1.148-7(c)). (3) Advance Refunding Portion: None (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. (d) Bona Fide Debt Service Fund. To the extent that the Debt Service Accounts qualify as a Bona Fide Debt Service Fund, Investment earnings therein cannot be taken into account in computing arbitrage rebate. (e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Issuer must continue to comply with Section 4.06. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met. (1) Using Adjusted Gross Proceeds to pay principal of any Bonds is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The 6-month spending exception generally is met if all Adjusted Gross Proceeds of the Project Portion or the Current Refunding Portion, as applicable, are spent within 6 months following the Issue Date. The test may still be satisfied even if up to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within 1 year of the Issue Date. Section 4.06 Computation and Payment of Arbitrage Rebate. (a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment reports relating to each fund held by it that contains Gross Proceeds of the Bonds together with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other thanthe Issuer annually as of the end of each Bond Year and not later than 10 days following each Computation Date. 19 Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Bonds, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and (10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Issuer together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate was determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. (c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to the United States the rebate amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 (d) Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst, then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counselor a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. (e) Filing Requiremf!nts. The Issuer will file or cause to be filed with the IRS such reports or other documents as are required by the Code in accordance with an Opinion of Bond Counsel. (f) Survival after Defeasance. Notwithstanding anything in the Bond Resolutions to the contrary, the obligation to pay arbitrage rebate to the United States will survive the payment or defeasance of the Bonds. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.01 Term of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Bonds and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Bonds have been fully paid and all such Bonds are cancelled; provided that the provisions of Section 4.06 of this Tax Certificate regarding payment of arbitrage rebate and all related penalties and interest will remain in effect until all such amounts are paid to the United States and the provisions in Section 4.02 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.02 Amendments. This Tax Certificate may be amended from time to time by the Issuer without notice to or the consent of any of the Bond owners, but only if such amendment is in writing and is accompanied by an Opinion of Bond Counsel to the effect that, under then existing law, 20 assuming compliance with this Tax Certificate as so amended and the Bond Resolutions, such amendment will not cause any Bond to be an arbitrage bond under Code § 148 or otherwise cause interest on any Bond to be included in gross income for federal income tax purposes. No amendment will become effective until the Issuer receives an Opinion of Bond Counsel, addressed to the Issuer that the amendment will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 5.03 Opinion of Bond Counsel. The Issuer may deviate from the provisions of this Tax Certificate if furnished with an Opinion of Bond Counsel to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. The Issuer further agrees to comply with any further or different instructions provided in an Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Bonds or the exclusion from gross income of interest on the Bonds. Section 5.04 Reliance. In delivering this Tax Certificate the Issuer is making only those certifications, representations and agreements as are specifically attributed to them in this Tax Certificate. The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations are reasonable. The Issuer understands that its certifications will be relied upon by Bond Counsel in rendering its opinion as to the validity of the Bonds and the exclusion from federal gross income of the interest on the Bonds. Section 5.05 Severability. If any prOVisIOn in this Tax Certificate or in the Bonds is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired . . Section 5.06 Benefit of Certificate. This Tax Certificate is binding upon the Issuer, its respective successors and assigns, and inures to the benefit of the Issuer and the owners of the Bonds. Nothing in this Tax Certificate, the Bond Resolutions or the Bonds, express or implied, gives to any person, other than the Issuer, its successors and assigns, and the owners of the Bonds, any benefit: or any legal or equitable right, remedy or claim under this Tax Certificate. Section 5.07 Default, Breach and Enforcement. Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the Bond owners pursuant to the terms of the Bond Resolutions or any other document which references this Tax Certificate and gives remedies for a misrepresentation or breach thereof. Section 5.08 Governing Law. This Tax Certificate will be governed by and construed in accordance with the laws of the State. Section 5.09 Electronic Transactions. The transaction described in this Tax Certificate may be conducted, and related documents may be stored, by electronic means. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 21 THE UNDERSIGNED, Mayor, Clerk and Finance Director of the Issuer, by their execution of this Tax Certificate hereby make the foregoing certifications, representations, and agreements contained in this Tax Certificate on behalf of the Issuer, as of the Issue Date. By: (Signature Page to Federal Tax CertifIcate -Series 20 12-A) EXHIBITA IRS FORM 8038-G A-I 816-221-1000 fAX: 816-221-1018 WWW.GILMOREBELL.COM GILMOREBELL A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 2405 GRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 ST. LOUIS, MISSOURI WICHITA. KANSAS LINCOLN, NEBRASKA 8.87 1.20 0.00 10.07 SHIPPING· SPECIAL: . HANDLING· 0.00 TOTAL: . Date: 290ct 12 Wet; 1.00 LBS DV: Svcs: ** 2DAY ** TReK: 5319 3048 7128 ?ef: 600596.050 GMR )ep; October 29,2012 VIA FEDERAL EXPRESS Internal Revenue Service Center Ogden, Utah 8420 I Re: City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2012-A and General Obligation Refunding Bonds, Series 2012-B Ladies and Gentlemen: Enclosed for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986 is Form 8038-G, Information Return for Tax-Exempt Governmental Obligations, being filed witb respect to the above-captioned transaction. If you have any questions, please do not hesitate to contact me. Very truly yours, Gina M. Riekhof GMR:jac Enclosure FedEx Express Customer Support Trace 3875 Airways Boulevard Module H, 4th Floor Memphis, TN 38116 U.S. Mail: PO Box 727 Memphis, TN 38194-4643 Telephone: 901-369-3600 October 31 ,2012 Dear Customer: The following is the proof-of-delivery for tracking number 531930487128. Delivery Informatioh: Status: Signed for by: Service type: Delivered D.CHEN FedEx 2Day Envelope Delivered to: Delivery location: Delivery date: Shipping/Receiving 1973 N RULON WHITE BLVD OGDEN, UT 84201 Oct 30,201210:14 Shipping Information: Tracking number: 531930487128 Ship date: Weight: Oct29,2012 0.5 IbslO.2 kg Recipient: INTERNAL REVENUE SERVICE CENTER 1973 N. RULON WHITE BLVD. OGDEN, UT 84201 US Reference Thank you for choosing FedEx Express. FedEx Worldwide Customer Service 1.800.GoFedEx 1.800.463.3339 Shipper: GILMORE & BELL, P.C. Gilmore & Bell, P.C. 2405 Grand Blvd. Suite 1100 KANSAS CITY, MO 64108 US 600596.050 GMR Reporting Authority OMS No_ 1545--{)720 Fo<m 8038-G (Rev. September 2011) Department of the Treasury Int~a1 Revenue Service Information Return for Tax-Exempt Governmental Obligations .,.. Under Internal Revenue Code $ection 149(e) ~ See separate instructions. Cautio"n: If the issue pn"ce is under $100.000, use Form 8038-GC. .If Amended Return, Check. here..... 0 1 Issuer's name City_of salina. KansaS 2 Issuer's employer idenlificatlofl number (EIN) -48-6017288 3a Name of persbn (other than issuer) with whom the IRS may cominunicate about this rel:Um (see instructions) 3b Telephone number of other person shown on 3a 4 Number and stre;et (~P.O. box if mail is not delivered to Street address) 300 W. Ash Street IRoom/suite 5 Report number (For fRS Use Only) 13~ 6 Cit14 to'Nn, or post OffICe, state, and ZIP code Salina. Kansas 67402. 7 Date of issue07/2(';/2012 8 Name of isSue General Obligation Internal frnprovemeht Bonds, series 2012-A & General Obligation R~fu~in9 BOt.t_~s> S~ries 2012·B 9 GUSIP number 7-9-4743388 10a Name and title of officer or other empfoy€e of the issuer whom the IRS may call for more information {see instructions) . 1tlb Telephone number of officer orofher employee shown OIl lOa Rodney Franz, Finance oireet~r 785-309-5735 • • Type of.lssue (!>nter the issue price). See the instructions and attach schedule. 11 Education . f-:;1:;;1+ ~--+__ 12 Heatth and hospital ~124 f~~ 1~ Transportation ~134 -+~_ 14 Public safety. • . . r14::--J ~-+__ 15 Environment (including sew-age bonds) r1c:5+__~_-r__ 16 Housing • 16 17 Utilities • r17=--t-----+-~ 18 Other. Descnbe ~ streets, sewer system. water system, public buildings, other public improvements 18 6.201.011 19 If obligations are TANs or RANs, check only box 19a >--0II )Y If obligations are BANs, check only box 19b ° ""',11},,,,,:;;;,[; 20 If obligations are in the form of a lease or installment sale, check box 0 ..".-j~/:~};-/i',r, Description of Obligations. Complete for the entire issue for which this form is beinR. filed. (a) Final mafuritydate (b) Issue price (e) Stated redemption Cd) Weighted price at maturity average maturitY (e) Yield o 1.3989 % 2,443 6.201.011 6,201,011 22 23 29 30 oovears . 98,159 3,350.943 5.704 25 24 27 28 26 10/0112027 . $ 6.201.011' $ 5,150,000 Uses of Proceeds of Bond Issue Oncluding underwriters' discount) . Proceeds used for accrued interest '. Issue pric:e of entire issue (enter amouht from line 21, column (b» Proceeds used for bond Issuance costs ~ncluding underWriters' discount) . Proceeds uSed for credit enhancement Proceeds allocated to reasonably required reserVe or replacement fund Proceeds used to -currently refund prior issues Proceeds used to advance refund prior issues Total (add Jines 24 through 28) Nonrefunding proceeds ,of the issue (subtract line 29 from line 23 arid €oilter amou'!t "here) Description of Refunded Bonds. Complete 1hjs part only for refunding bonds. 21 22 23 24 25 26 27 28 29 30 31 Enter the remaining weighted. average maturity of t~e bonds to be currently refunded. 32 Enter the remaining weighted average maturity of the bonds to be advance refunded. 33 Enter the last date on which the refunded bonds will be called (MMlDDIYYYY) 34 Enter the date(s) the refunded bonds were issued ~ (MMIDD!YYYY) see attachment years see attachment years see attachment see attachment For Paperwork Reduction Act Notice, see -separate instructions. Cat. No. 63T13S Form 8038-G (Rev. 9-2011) ATTACHMENT TO IRS FORM 8038-G CITY OF SALINA, KANSAS $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A Part V: Description of Refunded Bonds $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B Line Description Series Series Series Series 2003-A 2004-B 2005-A 2011-1 Bonds Bonds Bonds Notes 31 Remaining weighted average maturity of N/A 2.538 years N/A 0.014 years Bonds to be currently refunded 32 Remaining weighted average maturity of 4.181 years N/A 4.676 years N/A Bonds to be advance refunded 33 Last date on which refunded Bonds will be 10/01/2013 10/01/2012 10/0112013 08/0112012 called 34 Dates Refunded Obligations were issued 07/29/2003 07/28/2004 07128/2005 07/28/2011 A-2 EXHIBITB RECEIPT FOR PURCHASE PRICE $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 26,2012 $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULY 26, 2012 The undersigned Director of Finance and Administration of the City of Salina, Kansas, this day received from UMB Bank, N.A., Kansas City, Missouri, the original purchaser of the above-described bonds (the "Bonds"), the full purchase price of the Bonds, said purchase price and net amount received by the Issuer being calculated as follows: Series 2012-A Bonds Series 2012-B Bonds Principal Amount ............................ $2,365,000.00 Principal Amount ........................... $3,785,000.00 Plus Accrued Interest ...................... 1,242.85 Plus Accrued Interest ..................... 1,200.15 Less Underwriting Discount ........... (18,902.80) Less Underwriting Discount .......... (16,636.32) Plus Net Original Issue Premium.... 18,902.80 Plus Net Original Issue Premium... 32,107.75 Total Purchase Price........... $2,366,242.85 Total Purchase Price........... $3,800,471.43 Less Good Faith Deposit................. (47,300.00) Less Good Faith Deposit................ (75,200.00) Net Amount Received ........ $2,318,942.85 Net Amount Received ....... $3,725,271.43 DATED: July 26, 2012. CITY OF SALINA, KANSAS B-1 EXHIBITC RECEIPT AND REPRESENTATION $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULy 26,2012 $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULy 26,2012 This certificate is being delivered by UMB Bank, N.A., Kansas City, Missouri (the "Purchaser") in connection with the issuance of the above-described bonds (the "Bonds"), being issued on the date of this Receipt by the City of Salina, Kansas (the "Issuer"). Based on its records and information available to the undersigned which the undersigned believes to be correct, the Purchaser represents as follows: 1. Authorized Representative. The undersigned is the duly authorized representative of the Purchaser. 2. Receipt for Bonds. The Purchaser acknowledges receipt by the Depository Trust Company on behalf of the Purchaser on the Issue Date consisting of fully registered "book-entry-only" bonds in Authorized Denominations in a form acceptable to the Purchaser. 3. Public Offering. All of the Bonds have been the subject of an initial offering to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers), at prices no higher than the prices set forth on Schedule I attached to this Certificate, without accrued interest (the "Offering Prices"). On the basis of information available to us which we believe to be correct, we expect that at least 10 percent of the Bonds of each maturity" will be sold to the public at offering prices no higher than said Offering Prices. 4. Reliance. The Issuer may rely on the foregoing representations in executing and . delivering its Federal Tax Certificate with respect to its certification as to issue price of the Bonds under the Internal Revenue Code of 1986, as amended (the "Code"), and Gilmore & Bell, P.C., Bond Counsel, may rely on the foregoing representations in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds under the Code. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] C-1 Dated: July 26,2012. UMB BANK, N.A. KANSAS CITY, MISSOURI (Signature Page to Purchaser's Receipt) SCHEDULE I TO PURCHASER'S RECEIPT AND REPRESENTATION $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A DATED JULY 26,2012 Type of Maturity Dollar Maturity Bond Coupon Yield Value Price Price 10/01120]3 Serial Coupon 1.000% 0.401% 130,000.00 100.705% 130,916.50 10/01/2014 Senal Coupon 1.000% 0.450% 140,000.00 101.191% 141,667.40 10/0112015 Serial Coupon 1.250% 0.550% 145,000 00 102.203% 148,194.35 10/01/2016 Serial Coupon 1.500% 0.700% 150,00000 103.290% 154,935.00 10/0112017 Senal Coupon 1.500% 0850% 150,000.00 103.287% 154,93050 10/01/2018 Serial Coupon 1.500% 1.050% 155,000.00 102685% 159,161.75 10/0112019 Serial Coupon 1.500% 1.200% 155,000.00 102.057% 158,188.35 10/0112020 Serial Coupon 1.400% 1.400% 155,000.00 100.000% 155,000.00 10/0112021 Senal Coupon 1650% 1.650% 160,000.00 100.000% 160,00000 10/01/2022 Serial Coupon 1.850% 1.850% 160,000.00 100.000% 160,000.00 10/0112023 Serial Coupon 2000% 2.000% 165,000.00 100.000% 165,000.00 10/01/2024 Serial Coupon 2.100% 2.150% 170,000.00 99.465% 169,090.50 10/01/2025 Serial Coupon 2.200% 2.250% 175,000.00 99.431% 174,00425 10/01/2026 Serial Coupon 2.350% 2.400% 175,000 00 99.400% 173,95000 10101/2027 Serial Coupon 2.450% 2.500% 180,000.00 99.369% 178,864.20 Total S2,365,OOO.00 $2,383,902.80 $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULY 26,2012 Type of Maturity Dollar Maturity Bond Coupon Yield Value Price Price 10/0112013 Serial Coupon 1.000% 0401% 385,00000 100.705% 387,71425 10/0112014 Serial Coupon 1000% 0450% 940,000.00 101.191% 95/,195.40 10101/2015 Serial Coupon 1.000% 0.550% 625,000.00 101.416% 633,850.00 10/0112016 Serial Coupon 1.000"10 0700% 460,000.00 101.233% 465,671.80 10/01/2017 Serial Coupon 1.000% 0850% 485,000.00 100.758% 488,676.30 10/0112018 Senal Coupon 1.050% 1.050% 475,000.00 100.000% 475,00000 10/01/2019 Serial Coupon 1.200% 1200"10 235,000 00 100.000% 235,000.00 10/0112020 Senal Coupon 1.400% 1.400% 180,000.00 100.000% 180,000 00 Total S3,785,OOO.00 $3,817,107.75 EXHIBITD DESCRIPTION OF FINANCED IMPROVEMENTS; FINAL ALLOCATION $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULy 26, 2012 ISSUE DATE: JULy 26, 2012 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain categories of assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. The Tax Compliance Procedure requires the Bond Compliance Officer to complete a Final Written Allocation of the proceeds of the Bonds, in substantially the following form, when all proceeds (including Investment earnings on proceeds) are expended, but not later than 18 months after the Financed Improvements are placed in service. A completed copy of this Final Written Allocation should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. The undersigned is the Bond Compliance Officer of the City of Salina, Kansas (the "Issuer") and in that capacity is authorized to execute federal income tax returns required to be filed by the Issuer and to make appropriate elections and designations regarding federal income tax matters on behalf of the Issuer. This allocation of the proceeds of the bond issue referenced above (the "Bonds") is necessary for the Issuer to satisfy ongoing reporting and compliance requirements under federal income tax laws. Purpose. This document, together with the schedules and records referred to below, is intended to memorialize allocations of Bond proceeds to expenditures for purposes of §§ 141 and 148 of the Internal Revenue Code (the "Code"). All allocations are or were previously made no later than 18 months following the date the expenditure was made by the Issuer or, if later, the date the "Financed Improvements" were "placed in service" (both as defined below), and no later than 60 days following the 5th anniversary of the issue date of the Bonds. Definitions. Capitalized terms not otherwise defmed herein shall have the meanings ascribed thereto in the Federal Tax Certificate, relating to the Bonds, dated July 26, 2012 (the "Issue Date"). Background. The Bonds were issued pursuant to the Bond Resolutions in order to provide funds needed to finance the Financed Improvements and refund the Refunded Obligations. Proceeds of the Bonds were deposited into the Funds and Accounts as described in the Federal Tax Certificate. Sources Used to Fund Improvements and Allocation of Proceeds to Costs of Financed Improvements. A portion of the costs of the Improvements were paid from sale proceeds of the Bonds, earnings from the investment of those proceeds and from other money of the Issuer as shown on the attached Schedule to this Final Written Allocation. The portions of the Improvements financed with proceeds of the Bonds and from other money of the Issuer are also shown on the attached Schedule to this Final Written Allocation. D-1 Identification and Timing of Expenditures for Arbitrage Purposes. For purposes of complying with the arbitrage rules, the Issuer allocates the proceeds of the Project Portion to the various expenditures described in the invoices, requisitions or other substantiation supporting the Schedule to this Final Written Allocation. In each case, the cost requisitioned was either paid directly to a third party or reimbursed the Issuer for an amount it had previously paid or incurred. Amounts received from the sale of the Project Portion and retained as underwriters discount are allocated to that purpose and spent on the Issue Date. Amounts allocated to interest expense are treated as paid on the Interest Payment Dates for the Project Portion. Placed In Service. The Financed Improvements were "placed in service" on the dates set out on the Schedule to this Final Written Allocation. For this purpose, the assets are considered to be "placed in service" as of the date on which, based on all the facts and circumstances: (a) the constructing and equipping of the asset has reached a degree of completion which would permit its operation at substantially its design level; and (b) the asset is, in fact, in operation at that level. This allocation has been prepared based on statutes and regulations existing as of this date. The Issuer reserves the right to amend this allocation to the extent permitted by future Treasury Regulations or similar authorities. D-2 SCHEDULE TO FINAL WRITTEN ALLOCATION SOURCES AND USES; IMPROVEMENTS EXHIBIT D TO THE FEDERAL TAX CERTIFICATE City of Salina, Kansas _I Fin_I AUocation of Bond Proceeds (Origin.1 Obfigations) 2002~1 Temp Notes 2003·1 Temp Notes 2003~3 Temp Notes Senes 2003A 2004-2 Temp Notes 2004-3 Temp Notes Senes 2004B $enes lDOSA Senes 2011-A Senes 20 12-A dnd B Tot,li Sources' P,lI AmOlUll 4,865,000 00 3,800,00000 1,750,00000 4,350,00000 775,00000 2,150,00000 4,053,00000 4,210,00000 3,400,00000 6,215,000 00 S 35,568,00000 OngtndllSSLle Prenllltm (DIscount) 28,55755 37,77200 51,04405 3,472 00 14,19000 23,04647 27,57385 25,18055 210,83647 :\ccruedlnterest 3,95281 2,95556 13125 5,042 19 55972 1,25417 4,83447 5,44682 491 11 2,40793 27,07603 P1IQf Issue Debt Sen ICC Flmds 67,372 50 67,372 50 Pre-P did Assessments 145,78643 625,00000 770,78643 Unspent Refunded Noles Proceeds 201,88148 441,15454 643,03602 Tot.11 4,897,510 36 3,840,72756 1,750,131 25 4,406,08624 779,031 72 2,165,44417 4,080,88094 4,590,68858 3,400,491 11 7,376,11552 5 37,287,10745 Uses Project Fund 4,839,373 65 3,794,51705 1,729,29500 6,24455 772,72600 2,143,00400 135,73282 32,13424 3,387,60100 16,840,62831 Escrow Fund 4,350,000 00 3,879,377 78 4,488,784 72 491 11 7,243,48186 19,962,13547 Debt Sen Ice Fund 3,95281 36,927 56 13125 5,042 19 2,90797 15,06792 4,92069 5,44682 2,40793 76,805 14 C05tsofissu.mce 50,000 00 5,48295 15,00000 2,27400 6,99600 37,88940 36,74895 8,03000 68,07573 230,49703 Unden\nter's DIscount 4,18390 3,80000 5,70500 25,79950 1,12375 37625 22,96025 27,573 85 4,36900 62,15000 158,04150 Bond insurJnce PremIUm 19,00000 19,00000 TotAl 4,897,51036 3,840,72756 1,750,131 25 4,406,086 24 779,031 72 2,165,44417 4,080,88094 4,590,688 58 3,400,491 11 7,376,11552 S 37,287,10745 £\/ttbir D to Federal Tax Certificate D-l July 26,2012 Exhibit D to FTC EXHIBIT D TO THE FEDERAL TAX CERTIFICATE Descri· tion.ofPro ert -Corn risin the Financed Facili Sene~ 2002-1 Temporar), Notes Project Estimated Elapsed E'ltim3ted Original Placed in Time Remaining Economic Service from Economic Asset DC'icription Life Date Issue Date Life Cost AcqUIre Land lmpro"ements to City's roads. sewer system, water system and other utilities 30 March-02 000 3000 4,839,374 4,839,374 Less land costs Net costs, c'(cludmg land 4,839,374 Senes 2002~ I Temporary Notes Ongmal Average, Reasonably Expected EconomIC Life 3000 years 120% ofOngmal ECOnOlnlC Life 120% 3600 years Issue Date ofScnes 2002-1 Temporary Notes 3/28/2002 Issue Date of2003A Bonds 7/29/2003 Less Years elapsed (134) Rematntng permitted \\elghted a\eroge bond manmty 34.66 years Serle,\ 200JA Project Estimated Elapsed Estimated Original Placed in Time Remaming Economic Service from Economic Asset Description Life Date Issue Date Life Cost Land Vanous bUlldmg, street, and sewer lInprovements 30 Ju1y-03 000 3000 6,245 6,245 Less land costs Net co~ts, e,cludmg land 6,245 A H~rage, Reasonably E"pected EconomiC LIfe 3000 years 120% ofOngmai Economic Life 12000% 3600 years c ------Series 2003A -Determination of Average, Reasonably Expected Economic Life of Financed FacilitieS Refund 2002-1 Temporary Notes Senes 2003A ProJect Total Net Uses Description 120% of Senes 2003A E"pected EconomiC Life of Facilities Financed: Use of 120% of Series 2003A Average Proceeds Life (yrs) 4,350,000 3466 6,245 3600 4,356,245 Issue Date of Senes 2003A Bonds 7/29/2003 Issue Date ofSenes 2012 Bonds 7/2612012 Less Years elapsed Remaining permitted weighted average bond maturity D-2 Proceeds " Lite 150,771,000 224,804 150,995,804 34,66 @22l.years 25.67 years Economic Cost Paid Cost Paid Life x from Bond from Other Financed Proceeds Sources Cost 4,839,374 145,181,210 4,839,374 145,181,210 4,839,374 Economic Cost Paid Cost Paid Llfex from Bond from Other Financed Proceeds Sources Cost 6,245 187,337 6,245 187,337 6,245 J ul)26, 2012 Exhibit D to FTC Descri tion of Pro ertv Com risin the Financed Facilit Serle:.. 2003-1 TempO/aI)' Note!, Project!, Estimated Elapsed Estimated Original Placed in TIme Remaining Economic Service from Economic Asset DCSl'ription Life Date Issue Date Life Cost AcqUlre Land Itnpro\cments to Schll1mg Road and Centenmal Road 20 July-03 000 2000 670,032 Impro\ements to Watel"\\ell Road 20 July-03 000 2000 649,062 Improvements to City's So\1d Waste Facility 40 July-03 000 4000 2,475,423 3,794,517 Lcs~ !.md costs Net costs, e,cludmg land 3,794,517 Senes 2003-1 Temporary Notes Ongmal Average, Reasonably E ... pected Economic LIfe 3305 years 120% ofOngmal Econom1c Life 120% 3966 years Issue Ddte oCSenes 2003-1 Temporary Notes 7/29/2003 Issue Date 0[20048 Bonds 7/28/2004 Less Years elapsed (100) Remallll11g pemlltted \velgilted average bond matunty 38.66 years SerU!~ 2004B Projea Estimated Elapsed Estimated Original Placed in Time Remaining Economic Service frolll Economic Asset Description Life Date Issue Date Life Cost Land LIberty AddItion 30 July-04 000 3000 135,733 135,733 Less l<lnd costs Net costs, e,c1udmg land 135,733 A \-erage, Reasonably E'pcctcd EconomIC Life 3000 years 120% of Ongmal EconoOllC Life 12000% 3600 years Series 2004B -Determination of Average, Reasonably E'-pected Economic Life of Financed Facilities Refund 2003-1 Temporary Notes Senes 2004B Project Total Net Uses Description 120~},;) of Series 2004B E,-pected EconomiC Life of Facilities Financed: Use of 120% of Series 2004B Average Proceeds Life (yrs) 3,879,378 3866 135,733 3600 4,015,111 Issue Date of Senes 20048 Bonds 7/28/2004 Issue Date ofSenes 2012 Bonds 7/26/2012 Less Years elapsed Remaining permitted weighted average bond maturity DJ Proceeds x Life 149,964,494 4,886,382 154,850,876 38.57 Q,22J. years 30.58 years Economic Cost Paid Cost Paid Life x from Bond from Other Financed Proceeds Sources Cost 670,032 13,400,637 649,062 12,981,243 2,475,423 99,016,924 3,794,517 125,398,803 3,794,517 Economic Cost Paid Cost Paid Life x from Bond from Other Financed Proceeds Sources Cost 135,733 4,071,990 135,733 4,071,990 135,733 ju/y26,2012 Exhib,t D to FTC Descri tion of Pro er Com risin the Financed Facili Serie, 2011-1 Temporary Notes Pro)ec.t "-'set Description Acquuc Land tViagnoim Commons-Street/Water/Sewer Less land costs Net costs, excludmg land Sem:s 2011-\ Temporary Notes Ongmal Average, Reasonably Expected EconomIc LIfe Original Economic Lite 40 120% ofOngmal EconomIc Life 120% Issue Date ofSenes 2011-1 Temporary Notes 7/2812011 Issue Date ofSenes 2012 Bonds 7/2612012 Less Years elapsed Remammg pemlltted \ .... elghted average bond matunty Estimated Placed in Service Date July-II D-4 Elapsed Time from Issue Date 3992 years 4790 years (099) 46.91 years -008 Estimated Economic Remaining Cost Paid Cost Paid Life x Economic from Bond from Other Financed Lite Cost Proceeds Sources Cost 3992 3,387,601 3,387,601 135,233,032 3,387,601 3,387,601 135,233,032 3,387,601 3,387,601 July26, 2012 Descri tion of Pro er Com risin the Financed Facilit Series 2003-3 Tempormy Note~ Project Asset DescriptIOn AcqUire Land Rn er Run Subdl\ lS1011 Less land costs Net costs, excludmg ldnd Senes 2003-31 empOnlry Notes Ongmal Average, Reasonably Expected Economic Life Original Economic Life 30 120% ofOngmul Economic LIfe 120% hsue Date of Series 2003-3 Temporary Notes 12/17/2003 Issue Date ofSencs 2005A Bonds 7/28/2005 Less Years elapsed Remammg pennltted \\ elghted average bond matunty Sene'i 2004-2 Temporar,,V Notes Project AS'ict DC'icription AcqUire Land North NlI1th Street Bndge Lakewood Bndge Soccer Fields. Bill Burke Park Less land cost::. Net costs. exc1udlllg land Senes 2004-2 Temporary Notes Ongmal Average, Reasonably Expected EconomIc LIfe Original Economic Life 30 30 30 120% ofOngmal EconomIc Life 120% Issue Date of Series 2004-2 Temporary Notes 7/28/2004 Issue Date ot Scnes 2005A Bonds 7/28/2005 Less Years elilpsed Remammg pennltted weighted average bond matunty Estimated Placed in ServIce Date Elapsed Time from Issue Date December-03 000 Estimated Placed in ServIce Date July-04 July-04 July-04 3000 years 3600 years (161) 34.39 years Elapsed Time from Issue Date 3000 years 3600 years (l00) 35.00 years 000 000 0.00 E.,hibit D to FTC D-5 Estimated Economic Remaining Cost Paid Cost Paid Life x Economic from Bond from Other Financed, Life Cost Proceeds Sources Cost 3000 1,729,295 1,729,295 51,878,850 1,729,295 1,729,295 51,878,850 1,729,295 1,729,295 Estimated Economic Remaining Cost Paid Cost Paid Life x Economic from Bond from Other Financed Life Cost Proceeds Sources Cost 3000 373,900 373,900 11,216,990 3000 149,560 149,560 4,486,796 3000 249,266 249,266 7,477,994 772,726 772,726 23,181,780 772,726 772,726 J uly26, 2012 Exhibit D to FTC Descri tion of Pro ert Com risin the Financed FaciIi Serle!.1004~3 Temporary Note,' Project Estimated Elapsed Estimated Original Placed in Time Remaining Economic Service from Economic Ao;sct DescriptIOn Life Date Issue Date Life Cost AcqUIre Land Cedar Ridge Dnve Project 30 December~04 0.00 3000 408,666 Cedar RIdge AddltlOn Project 30 December~04 000 3000 588,080 Watcmorks Improvements ~ SchIlling and OhIO 30 December-04 000 3000 299,024 Yost Subdl\'lslOn Project 30 December-04 000 3000 174,431 Holly Lane Project 30 December-04 000 3000 124,593 Salina Blcentenmal Center Project 30 December~04 000 3000 299,024 South Marymount Road Project 30 December~04 000 3000 249,187 2,143,004 Less land costs Net costs, exc1udmg land 2,143,004 Senes 2004~3 Temporary Notes Onglnal Average, Reasonably Expected Economic Life 3000 years 120% of Ongmal Economic LIfe 120% 3600 years Is:>ue Date ofSenes 2004-3 Temporary Notes 1212212004 Issue Date ofSenes 200SA Bonds 712812005 Less Years elapsed (060) Remammg permitted \velghted average bond matunty 35.40 years Serle~ JOOSA Project Estimated Elapsed Estimated Original Placed in Time Remaining Economic Service from Economic Asset Description Life Date Issue Date Life Cost ~ Rl\ er Meadows 30 July-OS 000 3000 32,134 32,134 Less land costs Net costs, cxcludmg land 32,134 A vcrage, Reasonably Expected EconomIc LIfe 3000 years 120% ofOngmal Economic Life 12000% 3600 years Series 2005A -Determination of Average, ReasonabI;, Expected Economic Life of Financed Facilities Refund 2003-3 Temporary Notes Refund 2004-2 Temporary Notes Refund 2004-3 Temporary Notes 200SA Project Total Net Uses DescriptIOn 120% of Series 2005A E-xpected Economic Life of Facilities Fmanced: Use of 120% of Series ZOOSA Average Proceeds Lite (yrs) 1,637,730 3439 725,280 35.00 1,778,107 3540 32,134 3600 4,173,251 Issue Date of Senes 200SA Bonds 712812005 Issue Date ofSenes 2012 Bonds 712612012 Less Years elapsed Remaining permitted neighted average bond maturity IJ.6 Proceeds x Life 56,321,528 25,384,812 62,944,976 1,156,833 145,808,148 34.94 ~years 27.95 years Economic Cost Paid Cost Paid Life ). , from Bond from Other Financed Proceeds Sources Cost 408,666 12,259,976 588,080 17,642,405 299,024 8,970,714 174,431 5,232.917 124,593 3,737,798 299,024 8,970,714 249,187 7,475,595 2,143,004 64,290,120 2,143,004 Economic Cost Paid Cost "aid Life x from Bond from Other Financed Proceeds Sources Cost 32,134 964,027 32,134 964,027 32,134 J u!y26, 2012 Exhibit D to FTC Descri lion of Pro er Com risin the Financed Facili Series 2012AB-=-Oeter~i~ation o(A~e-rage, Reasonably Expected Economic Life of Financed Facilities ------~ Refund 20! 1-1 Temportlry Notes Refund 2003A Bonds Refund 2005A Bonds Refund 200 .. J.B Bonds Total Net Uses Description 120°;() of Series 2012AB E'\pcctcd Economic Life of Facilities Financed: Use of Series 2012AB Proceeds 3,414,204 1,173,825 1,601,619 1,053,834 7,243,482 D-7 120% of Average Life (yrs) 4691 2567 2795 3058 Proceeds x Life 160,173,987 30,134,338 44,763,232 32,223,105 267,294,662 36,90 J uly26, 2012 EXHIBITE FORM OF ANNUAL COMPLIANCE CHECKLIST $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULy 26, 2012 ISSUE DATE: JULy 26,2012 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for working with other Issuer officials, departments and administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the extent necessary to carry out the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete this checklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions or need assistance in completing the checklist, please contact Bond Counsel at the address below. A completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Bond Compliance Officer Name: L-[ ____ -'1 Bond Compliance Officer Signature: [L-____ ---J Date of Report: [ 1 Annual Period Covered by Report: L-[ _____ ---'] **If the answers to any of the following questions identify any compliance deficiencies, the Bond Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax Compliance Procedure. ** Item Question Response 1 Were all of the Financed Improvements owned by the Issuer during the DYes Ownership entire Annual Period? DNo If answer above was "No," was an Opinion of Bond Counsel obtained DYes prior to the transfer? DNo If Yes, include a copy of the Opinion in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. E-l Item Question Response 2 During the Annual Period, was any part of the Financed Improvements DYes Leases & leased at any time pursuant to a lease or similar agreement for more than DNo Other Rights 50 days? to Possession If answer above was "Yes," was an Opinion of Bond Counsel obtained DYes prior to entering into the lease or other arrangement? DNo If Yes, include a copy of the Opinion in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 3 During the Annual Period, has the management of all or any part of the DYes Management operations of the Financed Improvements (e.g., cafeteria, gift shop, etc.) DNo or Service been assumed by or transferred to another entity? Agreements If answer above was "Yes," was an Opinion of Bond Counsel obtained DYes prior to entering into the management agreement? DNo If Yes, include a copy of the Opinion in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 4 Was any other agreement entered into with an individual or entity that DYes Other Use grants special legal rights to the Financed Improvements? DNo If answer above was "Yes," was an Opinion of Bond Counsel obtained DYes prior to entering into the agreement? DNo If Yes, include a copy of the Opinion in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 5 Have any Gross Proceeds of the Bonds been invested in a Guaranteed DYes Proceeds & Investment Contract? DNo Investments Has the Issuer entered into an Interest Rate Swap Agreement with DYes respect to the Bonds? DNo Has any sinking or reserve fund for the payment of the Bonds been DYes established (other than funds and accounts created in the Bond DNo Resolutions)? Have any of the Bonds been redeemed or refunded in advance of their DYes scheduled maturities? DNo If answer to any of the above questions was "Yes," notifY Bond Counsel with such information and place a copy of documentation in the Tax-Exempt Bond File. E-2 Item 6 Arbitrage & Rebate Bond Counsel: Question Have all rebate and yield reduction calculations mandated in the Federal Tax Certificate or Compliance Agreement been prepared for the current year? If No, contact Rebate Analyst and incorporate report description of resolution in the Tax-Exempt Bond File. Gilmore & Bell, P.C. 2405 Grand Blvd., Suite 1100 Kansas City, MO 64108 Phone: (816) 221-1000 Fax: (816)221-1018 Attn: Gina Riekhof Email: griekhof@gilmorebell.com E-3 or include Response DYes DNo EXHIBITF ALLOCATION OF BONDS -MULTIPURPOSE ISSUE F-l ~ity_<>-tSali~~ Kan~~_~ ____ ~ ____ ~ __ ~ __ .~~~~ General Obligation Improvement and Refunding Bonds Series 2012-A and 2012-B Total Issue Sources And Uses Dated 07/15/2012 I Delivered 07/26/2012 New Money Sources Of Funds Par Amount of_B_0I_1d_s__ $2,365,000.00 Reoffenng Premium 18,902.80 Accrued Interest from 07115/20 12 ;.:to-'°..:.7:.=/2c.::.6:.=/2:.:.°.::c12=____ _________ ---=1-'C,2:...4_2.c.::.8.::..5 _____ =-=-:..::.:.::.:....._ Transfers from Prior Issue Debt Service Funds 408,488.14 Assessment Prepay #1 625,00_0_0_0 __________ ~ ~ssessm~tPr~~y~#_2_ _________________3 9~,4_5_2._1_0 ____________ _ Total SOUl'ces $3,458,085,89 Uses Of Funds 18,902.80 Costs ofIss::.:u=a.::.nc::.:e'--:-_----:-______________ ---=2:.::3-'-',7~3-='5.~80=____ ___ ___==_==_:__:_.:.::.-:' ____ ___=_ Deposit to Debt Service Fund 1,242,85 Deposit to Project Cons:c::tl:..:.,u-'-ct:.::.i0c::.nc..::F.c::uc:::nd-=-____________ 3'-',_41,_4-'--,2'---0_4_.4_4 ____________ '----'---=-=-:.._-'-Deposit to Net Cash Escrow Fund Total Uses $3,458,085,8_9 _____ ~ ______ _ Senes2012AandB 1 Issue Summary 17/11/2012! 1018AM ~J~ o(S~-!!!!_~,j(an~ ___ General Obligation Improvement and Refunding Bonds Series 2012-A (Project Portion) Debt Service Schedule Date Principal Coupon 10101/2012 04/0112013 10101/2013 130,000.00 1.000% 04/0112014 10/01/2014 140,000.00 1.000% 04/01/2015 10/0112015 145,000.00 1.250% 04/01/2016 10/0112016 150,000.00 1.500% 04/0112017 10/0112017 150,000.00 1.500% 04/01/2018 10/0112018 155,00000 1.500% 04/0112019 10/0112019 155,000.00 1.500% 04/0112020 10/01/2020 155,000.00 1.400% 04/0112021 10/01/2021 160,000.00 1.650% 04/01/2022 10/0112022 160,00000 1.850% 04/0112023 10/0112023 165,000.00 2.000% 04/0112024 10/0112024 170,000.00 2.100% 04/0112025 10/01/2025 175,000.00 2.200% 04/0112026 10/0112026 175,000.00 2350% 04/0112027 -------------~-1010112027 180,00000 2.450% Total $2,365,000.00 Yield Statistics Accrued Interest from 07/1512012 to 07126/2012 Bond Year Dollars Interest 28,924.44 20,337.50 19,687.50 19,687.50 18,987.50 18,987.50 18,081.25 18,081.25 16,956.25 16,956.25 15,831.25 15,831.25 14,668.75 14,668.75 13,506.25 13,506.25 12,421.25 12,421.25 11,101.25 11,101.25 9,621.25 9,621.25 7,971.25 7,971.25 6,186.25 6,186.25 4,261.25 4,261.25 2,205.00 2,205.00 $392,234.44 Total P+I 28,924.44 150,337.50 19,687.50 159,687.50 18,987.50 163,987.50 18,081.25 '168,081.25 16,956.25 166,956.25 15,831.25 170,831.25 14,668.75 169,668.75 13,506.25 168,506.25 12,421.25 172,421.25 11,101.25 171,101.25 9,621.25 174,621.25 7,97125 177,971.25 6,186.25 181,186.25 4,261.25 179,261.25 2,205.00 182,205.00 $2,757,234.44 _______ ! ,242.85_ __ .!~,269.2~ ~~~~l'~L..'!~ __ ._ __ _ 8.571 Years -------------------Aver<lge_Coupon _. 1.9351180% 1.9351180% 2.0532088% IRS Form 8038 Net Interest Cost 1.8374440% WeIghted Average Matunt), __ 8.495 Years Senes 2012A and B I New Money I 7111/2012 I 1015 AM City_ofSalina, K~nsa_s ~~~~~~~~_~~~_ General Obligation Improvement and Refunding Bonds Series 2012-A (Project Portion) Pricing Summary Type of Maturity Bond 10101/2013 Serial Coupon 1010112014 Serial Coupon 1010112015 Serial Coupon 10/0112016 Senal Coupon 10101/2017 Senal Coupon 10/0112018 Serial Coupon 1010112019 Serial Coupon 10/01/2020 Senal Coupon 10/0112021 Senal Coupon 1010112022 Serial Coupon 10/0112023 Senal Coupon 1010112024 Senal Coupon 10101/2025 Serial Coupon 10/0112026 Serial Coupon 10101/2027 SerIal Coupon Total Bid Information Par Amount of Bonds Reoffering P!~mlu.'l.:1 or (Discol!..nt) Gross Productio"'n'---__ _ J:otaU:J.i1derwriter's DIscount (0.799%) BId (100.000%) _ Coupon 1.000% 1000% 1.250% 1.500% 1.500% 1500% 1500% 1.400% 1.650% 1.850% 2000% 2.100% 2.200% 2.350% 2450% Yield 0.401% 0.450% 0.550% 0.700% 0850% 1.050% 1.200% 1.400% 1.650% 1.850% 2.000% 2.150% 2.250% 2.400% 2.500% Maturity Value Price 130,000.00 100.705% 140,000.00 101.191% 145,000.00 102.203% 150,00000 103.290% 150,000.00 103.287% 155,00000 102.685% 155,000.00 102057% 155,000.00 100.000% 160,00000 100000% 160,00000 100.000% 165,000.00 100.000% 170,000.00 99.465% 175,000.00 99.431% 175,000.00 99400% 180,000.00 99.369% $2,365,000.00 Dollar Price 130,916.50 141,667.40 148,194.35 154,935.00 154,930.50 159,161.75 158,188.35 155,000.00 160,00000 160,000.00 165,000.00 169,090.50 174,004.25 173,95000 178,864.20 $2,383,902.80 $2,365,000.00 _----: ____ -1 8-"-,902 80 $2,383,902.80 $(18,902.80) 2,365,000._QCl Ac_cr_u_ed_l~nt~r~~_irom 07j.l5/20 12 to 07/26/2012_ __________________________---:_~1, ,-242.85 Total Purchase Pnce $2,366,242.85 Bond Year Dollars _~~0g~-'::,1ft: _. ______ . ______ .... ______________ 8.571 Years Av~ag~_<;::().lJP~I!... ____________ ~ _ . __ . ___________ ~ _ . ________________ ._. ____________ 1.93~~Q.'!'::"_ 19351180% 1.9226828% Senes 2012A and B I New Money I 7/11/2012 I 1015 AM i I ~ _~i!:t of Salin~) Ka~~ ________________ ~ ___________________ ~ ____ ~ _______________ _ General Obligation Improvement and Refunding Bonds Series 2012-B Debt Service Schedule Date Principal Coupon Interest Total P+I 1010112012 04/0112013 27,930.67 27,930.67 1010112013 385,000.00 1.000% 19,638.75 404,638.75 04/01/2014 17,713.75 17,713.75 10/0112014 940,000.00 1.000% 17,713.75 957,713.75 04/01/2015 13,013.75 13,013.75 --~----10/0112015 625,000.00 1.000% 13,013.75 638,013.75 04/0112016 9,888.75 9,888.75 10101/2016 460,000.00 1.000% 9,888.75 469,888.75 04/0112017 7,588.75 7,588.75 10/0112017 485,00000 1000% 7,588.75 492,588.75 04/0112018 ~ -----------------5,163.75 _____ ~Jii3.75 10/0112018 475,000.00 1.050% 5,163.75 480,163.75 04/01/2019 2,670.00 2,670.00 10/0112019 235,000.00 1.200% 2,670.00 237,670.00 04/0112020 1,260.00 1,260.00 1010112020 180,000.00 1400% 1,260.00 181,260.00 Total $3,785,000.00 $162,166.92 $3,947,166.92 Yield Statistics Accrued Interest from 07/15/2012 to 07/26/2012 ~--------------------------------------------------1,200.15 Bond Year Dollars $15,139.06 Average Life 4.000 Years Average CO:.:uLP-=-=on"----________ ~ ____________________________________________________ . 1.0711825% Net Interest Cost (NIC) True Interest Cost (TIC~) ___________ _ Bond YIeld for ~bItrage PU!pos~ _ ~ __ ~lllnc1l12.Ive Cost (AIC) IRS Form 8038 Net Interest Cost Senes 2012A and B I Refunding 17/11/2012 I 1016AM 0.9689871% 0.9646257% 1.3989592% 1.2311605% 0.8521338% 3.962 Years _Ciry of S~linaL~ansas _____________ ~ ________ _ General Obligation Improvement and Refunding Bonds Series 2012-B Debt Service Comparison Date Total P+I Net New DIS Old Net DIS Savings 10/0112012 67,372.50 67,372 50 10/0112013 432,569.42 432,569.42 514,745.00 82,175.58 10/0112014 975,427.50 975,42750 1,056,445.00 81,017.50 10/01/2015 651,027.50 651,027.50 693,540.00 42,512.50 10/01/2016 479,777.50 479,777 50 516,962.50 37,185.00 10/0112017 500,177.50 --------~------_______50 ,0, 177.,c...50'----_____---C.5--'--00'--',:.....31_2-=.5-=-0_ ______--=--13=--:5:..:..: c.00 10/0112018 485,327.50 10/0112019 240,34000 10/0112020 182,520.00 Total $3,947,166.92 PV Analysis Summary (Net to Net) ~~tJV_~~Jlflow Savmgs @1.231 %(AIC) Accrued Interest Credit to Debt Service Fund Transfers from Prior Issue Debt Service Fund Net Present Value Benefit 485,327.50 483,312.50 (2,015.00) 240,340.00 240,912.50 572.50 182,520.00 182,00000 (520.00) $3,947,166.92 $4,255,602.50 $308,435.58 302,646.87 302,646.87 _ 1,200.1_~ (67,372.50) $236,474.52 Net PV Benefit 1 $3,670,000 _R_efl_u"'-nd'---'e---'--d_P_n_nc_ipLa_I _______,_ __________________6,-- ,-.4-,---4-=-3..:.::...% Net PV ~l1efiy $3,785,000 Refu,,-,-nd-,-i~ng,,,--P_r_m_c---,ip_a_l ______________________ 6.248% Refunding Bond Information _Refundmg Dated Date _ _~.ti~I1QiJ1.£Deli.v_~~)' l2.<l~e __ Senes 2012A and B I Refunding I 7/11/2012 I 1016 AM 7/15/2012 712612012 ----- _~itY.Qfl'alina, Kansa~ General Obligation Improvement and Refunding Bonds Series 2012-B Pricing Summary Maturity 10/0112013 10/0112014 Type of Bond Serial Coupon Senal Coupon 10/0112015 Senal Coupon 10/01/2016 Serial Coupon 10/0112017 Serial Coupon ~y20 18 ~_~2:!al Coupon 10/0112019 1010112020 Total Bid Information Serial Coupon Serial Coupon Par Amount of Bonds Reoffenng Premium or (Discount) Gross Production .Coupon 1.000% 1.000% 1.000% 1.000% 1.000% 1.050% 1.200% 1.400% Yield 0.401% 0.450% 0550% 0.700% 0.850% 1.050% 1.200% 1.400% Maturity Value 385,000.00 940,000.00 625,000.00 460,000.00 485,000.00 475,000.00 235,000.00 180,000.00 $3,785,000.00 Price 100.705% 101.191% 101.416% 101.233% 100.758% 100.000% 100.000% 100.000% Dollar Price 387,714.25 951,195.40 633,850.00 465,671.80 488,676.30 475,000.00 235,000.00 180,000.00 $3,817,107.75 $3,7~~~gO.o.Q. 32,107.75 $3,817,107.75 Total Underwriter~ DiscouE.!J9 ___ 440,--o/t--,-o,---) ~~~_.~~~~~_.~~~~~~~~~~~~~~~~~~~_$,,-,(,-,1.-,-,6'c:.6-=--36-=--.-=-32=-,-) Bld (100.409%) ~_~~~~~ __________ ~~~~ ___ .c..2C3,800,471 43 Accrued Interest fi·om 07/1512012 to 07/26/2012 1,20011. Total Purchase Pnce $3,801,671.58 Bond Year Dollars Average Llfe Average Coupon $15,13.9.0j_ ._~~~~~~ _ ~~~~~~~~~~~~~~~ _ ~_~~_---,-4.000 Years 1.0711825% Net Interest Cost (NIC)~~~_~~~~_~ __~ ~_~_~~~~~_~~~ __~ ~~ __~ --,-0--,-.9--,-6-=--89_8 7_ 1-,---,--% True Interest Cost (TIC) ~~~ _~ 0_ ._9 _6_46257% Senes2012AandB I Refunding 17/11/2012 I 1016AM SCHEDULE 1 DEBT SERVICE SCHEDULE AND PROOF OF YIELD S-l I r----I I I I I City of Salina, Kansas General Obligation Improvement and Refunding Bonds Series 2012-A and 2012-B Debt Service Schedule Date Principal Coupon 10/01/2012 04/01/2013 10/0112013 515,00000 1.000% 04/0112014 10/0112014 1,080,000 00 1000% 04/0112015 -------~---~---------------10{01/2015 770,000.00 1.047% 04/0112016 10/0112016 610,00000 I 123% 04/0112017 10/0112017 635,000.00 1.118% 04/01/2018 10/01/2018 630,000.00 1.161% 04/0112019 1010112019 390,000.00 1319% 04/0112020 10101/2020 335,000.00 1.400% 04/0112021 -------------10101/2021 160,000.00 1.650% 04/01/2022 1010112022 160,000.00 1850% 04/0112023 10/0112023 165,000.00 2.000% 04/0112024 1010112024 170,00000 2.100% 04/0112025 10/01/2025 175,000.00 2.200% 04/0112026 10101/2026 175,000.00 2.350% 04101/2027 .-----------------~~~---1010112027 180,000.00 2.450% Total $6,150,000.00 Yield Statistics Accrued Interest from 07/1512012 to 0712612012 ---------------------- --------Bond Year Dollars ------------------------Interest Total P+I 56,855.11 56,855.11 39,976.25 554,976.25 37,401.25 37,401.25 37,40\.25 1,117,401.25 32,001.25 32,001.2~ 32,001.25 802,001.25 27,970.00 27,970.00 27,970.00 637,970.00 24,545.00 24,545.00 24,545.00 659,545.00 20,995.00 20,995.00 20,995.00 650,995.00 17,338.75 17,338.75 17,338.75 407,338.75 14,766.25 14,766.25 14,766.25 349,766.25 12,421.25 12,421.2~ 12,421.25 172,421.25 11,101.25 11 ,101.25 11,10\.25 171,101.25 9,621.25 9,621.25 9,621.25 174,621.25 7,971.25 7,97125 7,971.25 177,971.25 6,186.25 6,186.25 6,186.25 181,186.25 4,261.25 4,261.25 4,261.25 179,26125 2,205.00 2,205.00 2,205.00 182,205.00 $554,401.36 $6,704,401.36 __ ~2,-,,4.43.00 ________________ ~35,4Q?~ Ave~geJ-J!(! ____ 5757 Years ----~----------------------------------------------------~--------------~------A "erage_ C;:0llP()I1_ IRS Form 8038 Net Interest Cost Weighted Average MatUrIty Senes2012AandB 1 Issue Summary 17/11/2012 11018AM 1.5657370% 1.4162161% 5704 Years Gilmore & Bell, p.e. i Tax and Financial Analysis Page 2 --------1 I I ~itYQ(§al!l!~dfans~s ___ ~~~~_ ~ ____ ~ _ ~ __ ~ _ ~_~ _ ~ _ ~_~ _____ ~ _________ _ General Obligation Improvement and Refunding Bonds Series 2012-A and 2012-B Proof Of Bond Yield @1.39895920/0 Cumulative Date Cashflow PV Factor Present Value PV 0712612012 1.0000000x 04/0112013 56,855.11 0.9905573x 56,318.25 56,318.25 1 0/0 1120 l3 554,976.25 0.9836767x 545,917.20 602,235.45 04/0112014 37,401.25 0.9768439x 36,535.18 638,770.63 10/0112014 1,117,401.25 0.9700585x 1,083,944.59 1,722,715.22 04/0112015 32,001.25 0.9633203x 30,827.45 1,753,54268 ---~---.--------.--10/0112015 802,001.25 0.9566289x 767,217.54 2,520,760.22 04/01/2016 27,970.00 0.9499839x 26,571.05 2,547,331.27 10/01/2016 637,97000 0.9433851x 601,85141 3,149,182.68 04/01/2017 24,54500 0.9368322x 22,99455 3,172,177.22 10/0112017 659,545.00 0.9303247x 613,591.04 3,785,768.26 04/0112018 20,995.00 0.9238625x 19,396.49 3,805,164.75 10/0112018 650,995.00 0.9174452x 597,252.22 4,402,416.97 04/0112019 17,338.75 0.9110724x 15,796.86 4,418,213.83 10/01/2019 407,338.75 0.9047439x 368,537.25 4,786,751.08 04/01/2020 14,766.25 0.8984594x 13,266.88 4,800,01796 10/0112020 349,76625 0.8922185x 312,067.91 5,112,085.87 04/0112021 12,421.25 0.8860209x 11,005.49 5,123,09136 10/0112021 172,421.25 0.8798665x 151,707.68 5,274,799.04 04/0112022 11,101.25 0.8737547x 9,699.77 5,284,498.81 10/0112022 171,101.25 0.8676854x 148,462.06 5,432,960.87 04/0112023 9,621.25 0.8616583x 8,290.23 5,441,251.1 0 10/0112023 174,621.25 0.8556731x 149,418.70 5,590,669.80 04/0112024 7,971.25 0.8497294x 6,773.41 5,597,443.20 10/0112024 177,971.25 0.8438270x 150,176.94 5,747,620.15 04/0112025 6,186.25 0.8379656x 5,183.86 5,752,804.01 10/0112025 181,186.25 0.8321449x 150,773.21 5,903,577.22 04/0112026 4,261.25 0.8263646x 3,521.35 5,907,098.57 10/0112026 179,26125 0.8206245x 147,106.18 6,054,204.75 04/0112027 2,205.00 0.8149243x 1,796.91 6,056,001 66 -----~-----~------------10/0112027 182,205.00 0.8092637x 147,451.89 6,203,453.55 Total $6,704,401.36 $6,203,453.55 Derivation Of T, arget Amount _()ligmal ~ssueProcee.cts Senes2012AandB I Issue Summary I 7/11/2012 I 10.18AM I Gilmore & Bell, P.C. Tax and Financial Analysis Page 4 CERTIFICATE OF FINANCIAL ADVISOR CITY OF SALINA, KANSAS $1,485,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2012-1 $2,365,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2012-A $3,785,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2012-B DATED JULY 15, 2012 George K. Baum & Company, Kansas City, Missouri, is employed as financial advisor to the City of Salina, Kansas (the "Issuer") with respect to the above captioned notes (the "Notes"). 1. Duties. The Financial Advisor rendered certain professional services to the Issuer, including advising the Issuer with respect to the sale of the Notes, and assisting the Issuer with the preparation of the Preliminary Official Statement dated June 11, 2012 and the Official Statement dated July 9, 2012, (both documents referred to collectively herein as the "Official Statement"). 2. Official Statement. The Financial Advisor has read the Official Statement, but has not, however, independently verified the factual and financial information contained in the Official Statement, including the appendices attached thereto, nor have we participated in the drafting for the appendices to the Official Statement. 3. Certification. Based on the foregoing, the Financial Advisor certifies, to the best of our knowledge, information and belief, the information contained in the Official Statement (except for Appendices A and B attached to the Official Statement) are, as of its date and as of the date hereof, true and correct in all material respects, and the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact where necessary to make a statement not misleading in light of the circumstances under which it was made. DATED: July 26, 2012. GEORGE K. BAUM & COMPANY KANSAS CITY, MISSOURI By:~~~~~~~~~ Title: --'='-==-"--~~"':-=":==---+1 816-221-1000 FAX: 816-221-1018 WWW.GllMOREBELL.COM Governing Body City of Salina, Kansas UMB Bank, N_A. Kansas City, Missouri GILMORE & BELL A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 2405 GRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 July 26,2012 ST_ LOUIS, MISSOURI WICHITA, KANSAS LINCOLN, NEBRASKA Re: $2,365,000 General Obligation Internal Improvement Bonds, Series 20 12-A, of the City of Salina, Kansas, Dated July 15,2012 We have acted as Bond Counsel in connection with the issuance by the City of Salina, Kansas (the "Issuer"), of the above-captioned bonds (the "Bonds"). In this capacity, we have examined the law and the certifIed proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer prescribing the details of the Bonds. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and mterest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, wlthm the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the prinCIpal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3. The interest on the Bonds (including any original issue discount properly allocable to an owner of a Bond) is: (a) excluded from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax Imposed on individuals and corporations, but is taken into account in determimng adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinions set forth in this paragraph are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order to preserve the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds are "qualified tax-exempt obligations" wIthin the meanmg of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b )(5) of the Code), a deduction is allowed for 80 percent of that portIOn of such financial institution's interest expense allocable to interest on the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, GILMORE & BELL, P.C. DEREK SCHfIIi:EDT ATTORNEY GENERAL The Honorable Ron Estes State Treasurer July 23,2012 Landon State Office Building, Room 201 N Topeka, KS 66612 Dear Mr. Estes: i'JiEI/IORI!.\L 120 SVV 10TH AVE 2ND FLOOR TOPEY,A KS 66612-1597 ,785) 296-2215 < FA;, (785: 296-6296 'II'\VW KSAG ORG Pursuant to K.S.A. 10-108, basic or supplemental transcript material is hereby approved and you may register the following: Municipality: City of Salina, Kansas Description: General Obligation Internal Improvement Bond Series: 2012-A Dated: Ju!y 15, 2012 Aggregate Amount: $2,365,000.00 Date of First Payment: April 1, 2013 Fiscal Agent: Kansas State Treasurer RDS: cc: Lieu Ann Elsey, City Clerk J3i1more & Bell, Kansas City Numbered: Registered Sincerely, OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT ./7 --/~////. f/t c:::..~ .. ' [~~&. ~$f--"---~'" kssistcmt Attorney General July 19,2012 MEMORANDUM TO: SEE DISTRIBUTION LIST FROM: DAVID ARTEBERRY TODD BURRUS RE: BOND ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER: AMOUNT, NAME AND DATE OF ISSUE: CIty of Salina, Kansas $6, 150,000 (Aggregate) City of Salina, Kansas $2,365,000 General Obligation Internal Improvement Bonds Series 2012-A $3,785,000 General ObligatIOn Refunding Bonds Senes 2012-B All Dated July 15, 2012 TIME AND DATE OF CLOSING: 10:00 a.m. SETTLEMENT NUMBERS: Par Amount Thursday, July 26,2012 Via Telephone Plus Accrued Interest (July 15 to July 26) Plus Bid Premium 2012-A $2,365,000.00 1,242.85 0.00 Net Amount Due at Closing $2,366,242.85 METHOD OF FUNDS TRANSFER: WIre Transfer of Federal Funds 2012-B $3,785,000.00 1,200.15 15,471.43 $3,801,671.58 4801 Main Street. Suite 500 • Kansas City, Missouri 64112 • 816.474.1100 Total $6,150,000.00 2,443.00 15,471.43 $6,167,914.43 TRANSFER INSTRUCTIONS: (UMB Bank) (City) DISBURSEMENT OF FUNDS: (City) On Thursday, July 26, 2012, UMB Bank will wire transfer an amount of $2,367,443.00 to Sunflower Bank, ABA #1011-0062-1, AC #102187275, for credit to Salina, Kansas. Attn: DenDlS ZImmerman On Thursday, July 26, 2012, UMB Bank will transfer an amount of $3,800,471.43 to UMB National Bank of America, Trust Department Account #9800 006823 for further credit to City of Salina. Attn: Bonnie Mosher. On or before Thursday, July 26, 2012, the City will wire transfer an amount of $67,372.50 to UMB National Bank of America., ABA #1010-0069-5, for credit to Trust Department Account #9800006823, for further credit to the Salina, Kansas. Attn: BonDle Mosher. Upon receipt of $2,367,443.00 from UMB Bank, plus $664,452.10 on hand from prepaid assessments, plus $408,488.14 from the debt servICe account ($3,440,383.24 total), the City will apply such funds as follows as established in the Bond Resolution: 2012-B Deposit to Improvement Account Deposit to Debt ServIce Account Total 2012-A $3,437,940.24 1,242.85 $3,439,183.09 $ 0.00 1,200.15 $1,200.15 Total $3,437,940.24 2,443.00 $3,440,383.24 (UMB National Bank of America) Upon receipt of $3,800,471.43 from UMB Bank, plus $67,372.50 from the City ($3,867,843.93 total), UMB National Bank of America will apply such funds as follows as established in the Bond Resolution: Deposit to Escrow Fund Deposit to Costs of Issuance Account Total 2012-B $3,828,959.89 38,884.04 $3,867,843.93 DELIVERY OF TRANSCRIPT AND LEGAL OPINION: DELIVERY INSTRUCTIONS: COSTS OF ISSUANCE: Upon receiving confirmation of receipt offunds Gilmore & Bell will authorize the release ofthe Bonds and e-mail a signed legal opinion to the City, George K. Baum & Company, UMB Bank, and UMB National Bank of America. Completed transcripts with original signed legal opinions will be sent to the respectIve partIes when completed. Upon registration, the Bonds will be delivered to the Depository Trust Company, New York, New York at least one business day prior to closmg. All costs related to the Issuance of the Bonds will be paid by either the City or UMB National Bank of America upon presentation ofthe proper invoices. CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2012-1 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2012-A GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012-B ISSUER City Hall 300 West Ash Salina, Kansas 67402-0736 785-309-5735 785-309-5738 (fax) Jason Gage, City Manager jason.gage@salina.org Mike Schrage mike.schrage@salina.org Rod Franz, Finance Director rod. franz@salina.org Lieu Ann Elsey, City Clerk lieuann.elsey@salina.org CITY ATTORNEY Clark, Mize & Linville 129 South 8th P. O. Box 380 Salina, Kansas 67402-0380 785-823-1868 (fax) Greg Bengtson 785-823-6325 gabengtson@cml-law.com BOND COUNSEL Gilmore & Bell, P. C. 2405 Grand Boulevard -Suite 1100 Kansas City, Missouri 64108-2521 816-221-1000 816-221-1018 (fax) Randy Irey rirey@gilmorebell.com Gina Riekhof griekhof@gilmorebell.com DISTRIBUTION LIST CITY'S BANK Sunflower Bank, N.A. 2090 S. Ohio Salina, Kansas 67402 785-826-2240 (fax) Dennis Zimmerman 785-827-5564 dennisz@sunflowerbank.com PAYING AGENT Office of the Kansas State Treasurer 900 S. W. Jackson -Room 201N Topeka, Kansas 66612-1235 785-296-7950 (fax) Carmen J. Klopping, Dir. of Bond Services 785-296-4144 carmen@treasurer.state.ks.us ESCROW TRUSTEE UMB National Bank of America 130 N. Market Street Wichita, Kansas 67202 316-267-1301 (fax) Bonnie Mosher 316-266-6015 bonnie.mosher@umb.com MATHEMATICAL VERIFICATION Robert Thomas CPA, LLC 360 Lakeshore Drive West Shawnee Mission, Kansas 66217-8523 913-962-1312 (fax) Robert Thomas 913-362-3555 bthomas@rthomascpa.com RATING AGENCY Moody's Investors Service 100 North Riverside Plaza -Suite 2220 Chicago, Illinois 60606 312-706-9999 (fax) Thomas Aaron 312-706-9967 thomas.aaron@moodys.com NOTES UNDERWRITER Country Club Bank 9400 Mission Road Prairie Village, Kansas 66206 913-385-0105 (fax) Lisa Roberts 816-751-1420 lroberts@countryclubbank.com BONDS UNDERWRITER UMB Bank, n.a. 1010 Grand P. O. Box 419226 Kansas City, Missouri 64141-6226 816-843-4325 (fax) Kristin Koziol 816-860-7223 kristin.koziol@umb.com FINANCIAL ADVISOR George K. Baum & Company 4801 Main Street -Suite 500 Kansas City, Missouri 64112 816-283-5326 (fax) David Arteberry 816-283-5137 arteberry@gkbaum.com Todd Burrus 816-283-5138 burrus@gkbaum.com CA55MEYER. JULIE From: WILSON, DENISE Sent: To: Thursday, July 12, 2012 1 :23 PM CASSMEYER, JULIE Subject: FW: New Bond Issued -----0 riginal M essage-----From: Rosalyn@treasurer.state.ks.us [mailto:Rosalyn@treasurer.state.ks.us] Sent: Thursday, July 12, 2012 12:14 PM To: WILSON, DENISE Cc: carmen@treasurer.state.ks.us Subject: New Bond Issued 07/12/201212.14:53 A new bond issue has been created in the KST Bond Registration 2.0 System. Below is the information. Registration #: Municipality: Bond Counsel: 0322-085-071512-425 SALINA GILMORE & BELL/DENISE Paying Agent: STATE Purpose & Series: G OINT IMP BD SR 2012-A Principal: 2,365,000.00 Closing Date: 07/26/2012 Please consider this notice to be your confirmation of the registration number assigned by this office to the above mentioned bond issue/temp note issue. Notify our office immediately of any correction or revision to the above information. 1