The URL can be used to link to this page

Audit Report - 1989 I ~/ SALINA AIRPORT AUTHORITY Salina, Kansas FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORTS Years Ended December 31, 1989 and 11388 ~ ~ ~ Î Î I HARRISON & ARNETT, CHARTERED Certified Public Accountants Salina, Kansas I I . I . I I I I I I I I I I I I I I I 8 I I 8 - SALINA AIRPORT AUTHORITY Salina, Kansas CONTENTS INDEPENDENT AUDITORS' REPORTS REPORT ON FINANCIAL STATEMENTS 1 REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS A PART OF AN AUDIT OF THE BASIC FINANCIAL STATEMENTS 2-3 REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS THAT MAY HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS 4 REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 5 REPORT ON INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS 6-7 REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS 8 SCHEDULE OF FINDINGS 9 FINANCIAL STATEMENTS Balance Sheets State.ents of Operations and Changes in Retained Earnings State.ents of Cash Flows Notes to Financial Statements 10-11 12 13 14-20 SUPPLEMENTAL INFORMATION Financial State.ents-Airport Revolving Account: Balance Sheets State.ents of Operations and Changes in Retained State8ents of Cash Flows Capital Expenditures-Airport Revolving Account Financial State.ents-Building Revenue Account: Balance Sheets Statements of Operations and Changes in Retained Statements of Cash Flows Capital Expenditures-Building Revenue Account Bonds of Indebtedness Building Revenue Bonds-Series 1984 Building Revenue Bonds-Series 1985 Insurance in Force Schedule of Federal Assistance Sum.ary of Federal Assistance Earnings 21-22 23-24 25 26-27 Earnings 28-29 30 31 32 32 33 34 35 36 37-38 I I HARRISON & ARNEIT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS I EUGENE 0 HAnn/SON, CPA THOMAS G AnNETT, CPA , AH. LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS I I The Board of Directors Salina Airport Authority Salina, Kansas I We have audited the accompanying financial state~ents of the Salina Airport Authority,' f:3alina, Kansas, as of December 31, 1989 and Decellbl~r 31, 1988 and for the years then ended as listed in the t~ble of contents. These financial statements are the responsibility of the Salina Airport Authority, Salina, Kansas management. Our responsibility is to express an opinion on these financial statements based on our audit. I We conducted our audit in accordance with generally accepted auditing standards and the Minimum Standard Audit Program approved by the State Municipal Accounting Board. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state'ments are free of material misstatement. 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. I In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Salina Airport Authority, Salina, Kansas, as of December 31, 1989 and December 31, 1988, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements taken as'a whole. The individual account group financial statements and schedules listed in the table of contents are presented for purpose of additional analysis and are not a required part of the financial statements of the Sal ina Airport Authori ty, Sal ina, Kansas. Such informat ion has been subjected to the auditing procedures applied in the examination of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. HARRISON & ARNETT, CHARTERED ~(~ Salina, Kansas February 8, 1990 J~~ CPA Certified Public Accountant in charge of and actively engaged on this audit. Pan~ 1 HARRISON & ARNEIT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGENE 0 HAnnISON, CPA. THOMAS G AnNETT, CPA . AH. LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 INDEPENDENT AUDITORS' REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS PART OF AN AUDIT OF THE BASIC FINANCIAL STATEMENTS The Board of Directors, Salina Airport Authority We have audited the financial statements of Salina Airport Authority, Salina, Kansas, as of and for the years ended December 31, 1989 and December 31, 1988, and have issued our report thereon dated February 8, 1990. We conducted our audit in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and Government AuditinQ Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. In planning and performing our audit of the financial statements of Salina Airport Authority, Salina, Kansas, for the yeat's ended Decemb'~r 31, 1989 and December 31, 1988, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. The management of Salina Airport Authority, Salina, Kansas, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: 1. 2. 3. 4. Receipts Purchases/disbursements Cash and investment balances Financial reporting "j For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. !.,! Page 2 "film"" ^"F""'M' '11""'1/'" "IF ,-"nrlrl"" ""'" Ir MTnlll/l^"'" I I I I Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. I I I We noted other matters involving the internal control structure and its operation that we have reported to the management of Salina Airport Authority, Salina, Kansas, in a separate letter dated February 8, 1990. I This report is intended for the information of the management and Board of Directors. This restriction is not intended to limit the distribution of this report, which is a matter of public record. I I HARRISON & ARNETT, CHARTERED ~i~ I Salina, Kansas February 8, 1990 I I I I I I I I Page 3 I HARRISON & ARN ETT CHARTERED I CERTIFIED PUBLIC ACCOUNTANTS EUGfNE 0 liAlm/SON, CPA TliOMAS G ^IH~E IT, CPA. AH LECKBAtJD, C PA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS THAT MAY HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS I The Board of Directors, Salina Airport Authority I We have audited the financial statements of Salina Airport Authority, Salina, Kansas, as of and for the years ended December 31, 1989 and December 31, 1988, and have issued our report thereon dated February 8, 1990. I We conducted our audit in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Account ing Board, and Government Audit inQ Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. I I Compliance with laws, regulations, contracts, and grants applicable to Salina Airport Authority, Salina, Kansas, is the responsibility of Salina Airport Authority, Salina, Kansas management. As part of obtaining reasonable assurance about whether the financial statements are free of matet'ial misstatement, we performed tests of the Authority's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. I I I The results of our tests indicate that, with respect to the items tested, Salina Airport Authority, Salina, Kansas, complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Salina Airport Authority had not complied, in all material respects, with those provisions. I I This report is intended for the information of the management and Board of Directors. This restriction is not intended to limit the distribution of this report, which is a matter of public record. I HARRISON & ARNETT, CHARTERED ~f~ I Salina, Kansas February 8, 1990 I I I Page It I .._,.._,..-, '-""""'-'-"-"'-'~-N"'oror"."'~,..'...'""""",~ I I I I I I I I I I I I I I I I I I I HARRISON & ARNElT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGEtJE 0 "Ann/SON, CPA. THOMAS G AfjfJETT, CPA A H. LECKEJANO, CPA (913) 827-7244 719 EAST CnAWFORD SALINA, KANSAS 67401 INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE The Board of Directors, Salina Airport Authority We have audited the financial statements of Salina Airport Authority, Salina, Kansas, for years ended December 31, 1989 and Qecember 31, 19B8, and have issued our report thereon dated February 8, 1990. These financial statements are the responsibility of Salina Airport Authority, Salina, Kansas management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and Government AuditinQ Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was made for the purpose of forming an opinion on the financial statements of Salina Airport Authority, Salina, Kansas, taken as a whole. The accompanying schedule of federal financial assistance is presented for purposes of additional analysis and is not a required part of the financial statements. The information in that schedule has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. HARRISON & ARNETT, CHARTERED ~j~ Salina, Kansas February 8, 1990 Page 5 .,rt.!nrl1~ ^'iE/W:^/ J "ISII II! / F or CEI111nED PUBLiC Accour HAtHS HARRISON & ARNEIT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGftJE 0 HArm/SON, CPA, 1IIOMAS G Ant/Err, CPA . A.H LECKBAND, C PA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 ¡ .~ INDEPENDENT AUDITORS' REPORT ON INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS The Board of Directors, Salina Airport Authority We have audited the financial statements of Salina Airport Authority, Salina, Kansas, for the years ended December 31, 1989 and December 31, 1988, and have issued our report thereon dated February 8, 1990. As part of our audit, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in administering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, Government AuditinQ Standards, issued by the Comptroller General of the United States, the Single Audit Act of 1984, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." For the purpose of this report, we have classified the significant intet'nal accounting and administrative controls used in administering federal financial assistance programs in the following categories: 1. 2. 3. 4. Receipts Purchase/disbursements Cash & Investments Financial reporting The management of Salina Airport Authority, Salina, Kansas, is responsible for establishing and maintaining internal control systems used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource USI~ is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, maintained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and administrative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. - I I I I Page 6 I I I I I I I I Our study included all of the applicable control categories listed above. During the years ended December 31, 1989 and December 31, lCj88, Salina Airport Authority, Salina, Kansas, expended lØØ percent of its total fedel'al financial assistance under major federal financial assistance programs. With respect to internal control systems used in administering major federal financial assistance programs, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance programs of Salina Airport Authority, Salina, Kansas. Accordingly, we do not express an opinion on the internal control systems used in administering the federal financial assistance programs of Salina Airport Authority, Salina, Kansas. Further, we do not express an opinion on the internal control systems used in administering the major federal financial assistance programs of Salina Airport Authority, Salina, Kansas. Also, our audit, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems used solely in administering non-major federal financial assistance programs. There were no non-major federal financial assistance program administered by the Salina Airport Authority in 1989 or 1988. Our study and evaluation and our audit disclosed no condition that we believe to be a material weakness in relation to a federal financial assistance program of Salina, Airport Authority, Salina, Kansas. This report is intended solely for the use of management and Board of Directors and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by Salina Airport Authority, Salina, Kansas, is a matter of public record. HARRISON & ARNETT, CHARTERED ~/a~ Salina, Kansas February 8, 199Ø Page 7 HARRISON & ARNEIT I CHARTERED I CERTIFIED PUBLIC ACCOUNTANTS EUGENE O. HAnnISON, c.p A. THOMAS G AntlE T T, CPA. AH lECKBAND, C FA (913) 827,7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS I The Board of Directors, Salina Airport Authority We have audited Salina Airport Authority, Salina, Kansas, compliance with the requirements governing types of services allowed or unallowed; eligibility matching, level of effort, or earmarking; reporting; claims for advances and reimbursements; and amounts claimed or used for matching that are applicable to each of its major federal financial assistance programs, which ar,e identified in the accompanying schedule of federal financial assistance, far the years ended December 31, 1989 and December 31, lq88. The management of Salina Airport Authority, Salina, Kansas, is responsible for Salina Airport Authority, Salina, Kansas, compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on Ou!~ audit. I I I I We conducted our audit in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the Sta1;e Municipal Accounting Board, Government AuditinQ Standards, issued by the Comptroller General of the United States, and Office of Management and Budget Circular A-128, "Audits of State and Local Governments." Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about Salina Airport Authod t y, Sal i na, Kansas, compli ance wi th those requirements. We believe that our audit provides a reasonable ba,sis for our opinion. I I . The results of our audit procedures disclosed no instances of noncompliance with the requirements referred to above and this is stated in the accompanying schedule of findings and questioned costs. . In our opinion, Salina Airport Authority, Sal ina, Kansas, compl ied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reporting; claims for advances and reimbursements; and amounts claimed or used fot' matching that are applicable to each of its major federal financial assistance programs for the years ended December 31, 1989 and December 31, 1988. . . . HARRISON & ARNETT, CHARTERED ~---- ¥ ~ Page 8 . . . -- Salina, Kansas February 8, 1990 , . ',1f r,Hlrl1~ ^' 'fllIC^, I I' IS '" IJ If or crr1llfiED 1'1J8UC ACI;()\ltJI<\'"" ---- -- _.. "......------.----....-----".---- I I I I I I I I I I II I I 18 I II i II ~ SCHEDULE OF FINDINGS There are no reportable findings Page '3 BALANCE SHEETS Decembet' 31J... 1989 1988 ASSETS CURRENT ASSETS Cash on hand Cash in banks (Note 2) Accounts receivable Prepaid expenses Notes receivable-current $ 50 1, 561, 240 11,821 9,402 56.600 $ 50 591t, 288 15,221 portion 66.730 TOTAL CURRENT ASSETS $ 1.639.113 $ 676.289 RESTRICTED ASSETS Net investment in direct financing leases (Note 3) Certificates of deposit Bond reserve (Note 2) Replacement and depreciation (Note 2) Cash in bank Economic development (Note 2) $ 755,765 $ 875,908 91,424 60,6&4 90,000 60,Ø00 47.959 1%5. 779 985.148 .LLJ362.351 I TOTAL RESTRICTED ASSETS $ FIXED ASSETS Land Buildings Airfield and Equipment other improvements $ 1,018,057 $ 1,Ø&9,057 7,579,285 5,336,157 7,340,075 6,691,492 950.672 B64.538 $16,888,089 $13, ~1&1, 244 (4.367.596) -.Jbl195.098) $12.520.493 $10. ;::&6. 14& I I Less-accumulated depreciation TOTAL FIXED ASSETS I TOTAL OTHER ASSETS $ 5,0&2 $ 236.233 223.031 $ 241.295 $ 223.031 I OTHER ASSETS Bond issue costs Long-term notes receivable I TOTAL ASSETS $15,386,049 $13,027,817 I I ----------- ----------- ----------- ----------- (Continued) I I The notes to financial statements are an integral part of this statement. Page 10 Decembet' 3,h 1989 1988 $ 69,588 $ 177, 115 1,443 9,6&6 130,000 110,000 1, 485 3,719 8,808 9,460 17,849 37,025 25,&51 65,378 $ 266,198 $ 400,989 I I , ~ ~ ~ I I ~ I I (Continued) LIABILITIES CURRENT LIABILITIES Accounts payable Payroll taxes payable Bond payable-current portion Deferred rent income Accrued bond interest Other accrued interest Accrued payroll and benefits Accrued property taxes TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Revenue bonds payable (Note 4) Temporary financing (Note 4> Less-current portion $ 890,000 2,490,000 (130,000> I I I I I I I I I I TOTAL LONG-TERM LIABILITIES $ 3,250,000 TOTAL LIABILITIES $ 3,516, 198 EQUITY CONTRIBUTIONS Federal Aviation Administration (Note I> $ 5,097,121 RETAINED EARNINGS Restricted for revenue bond reserves Restricted for economic development Restricted for investment in direct financing leases Unrestricted retained earnings $ 180,000 47,959 755,7&7 $ 5,789,004 TOTAL RETAINED EARNINGS $ 6,772,730 TOTAL EQU ITY $11,8&9,851 TOTAL LIABILITIES & EQUITY $15,38&,049 ----------- ----------- $ 1,000,0Ø0 (110,000> $ 890,000 $ 1,290,989 $ 4,,880,430 $ 160,000 865, 779 875,908 $ 4,,954, 711 LB..~, 856, 398 !1.L 73&,828 $13,027,817 ------------ ------------ The notes to financial statements are an integral part of this statement. n~..~ 11 STATEMENTS OF OPERATIONS AND CHANGES IN RETAINED EARNINGS I I OPERATING REVENUES Rental revenues Fixed base operator Landing fees Other operating revenues $ 803,058 106,432 5,913 11. 822 $ 794,077 %,133 28,702 9.098 I I I I I I I January 1 to December 31. 1989 1988 ~ TOTAL OPERATING REVENUES $ 927.225 $ 928.010 ~ OPERATING EXPENSES BEFORE DEPRECIATION Office and administration Maintenance Agricultural land expenses OPERATING EARNINGS (LOSS) $ 483,907 $ 4'5&,984 336,117 3,~8, (174 2.376 $ 820.024 $ 7198.334 $ 107,201 $ 1.39,676 $ &80.775 $ 6;::4.925 $ (573.574) $ (4195.249) $ 197,956 $ 239,757 (104,586) «~2, %8) (414) 133.074 $ 92.95& $ 2,~9. 863 $ (480,&18) $ (2~55, 386) $ 39&.951 $ 367.566 $ (83.&&7> $ 112. 180 6,856,398 11,31L0,236 (4.566.018) $ &.856.398 $ 6. 7Lf4. 218 $ &,772,731 $ 6, 8~)&, 398 ----------- ------------ ----------- ______0____- I I I I I I I I I I ~ ~ TOTAL OPERATING EXPENSES BEFORE DEPRECIATION OPERATING EARNINGS BEFORE DEPRECIATION DEPRECIATION OTHER INCOME (EXPENSES) Interest income Interest expense Gain (Loss) on sale of property TOTAL OTHER INCOME (EXPENSES) NET INCOME (LOSS) ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH FEDERAL CONTRIBUTIONS (Note 1) INCREASE (DECREASE) IN RETAINED EARNINGS RETAINED EARNINGS, January 1, AS PREV IOUSL Y REPORTED. ADJUSTMENT APPLICABLE TO PRIOR YEARS (Note 6) RETAINED EARNINGS, January 1, AS RESTATED RETAINED EARNINGS, December 31 The notes to financial statements are an integral part of this statement. n--- .,.., iìL '" ,"" ~. I I I I I I I STATEMENTS OF CASH FLOWS (DIRECT METHOD) (Not e 7) CASH FLOWS FROM OPERATING ACTIVITIES Cash received fro. customers Cash paid to suppliers and employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchase of property, plant and equipment Proceeds fro. federal grants Advance for tenant Proceeds from sale of property NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new borrowing Principal payments on debt Contributions to bond reserves Interest paid Principal received on financing leases Payments received on long-term debt I I ~ NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS CASH BALANCE-January 1 CASH BALANCE-December 31 J an uat'V 1 to December 31. 1989 1988 $ 865,6ØØ $ 962,737 (885.481) (729.&22) $ (19.881> $ 233. 115 $ 2Ø3,794 (3,Ø42,206) 613,642 (1,9ØØ) 5.7ØØ $ 239,757 (1,761,793) 98Ø,985 4Ø7.ØØØ $(2.22Ø.97Ø) $ (134. Ø51> $ 2,490,ØØØ $ (llØ, ØØØ) (145, øøø> (60,ØØØ> (93,226) (93,785> 12Ø,141 107,623 43.828 27 . 396 $ 2.39Ø.743 $ (lØ3.7&6) $ 149,892 $ (4,7Ø2) 1.46Ø.781 1.4&5.483 $ 1,610,673 $ 1,46Ø,781 ----------- --.--------- ----------- --.--------- The notes to financial statements are an integral part of this statement. I NOTES TO FINANCIAL STATEMENTS December 31, 1989 and 1988 '" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Salina Airport Authority (the Authority>, Salina, Kansas is pt'esented to assist in understanding the financial statements. These accounting policies conform to generally accepted accounting principles. , , Principles of AccountinQ The Salina Airport Authority is governed by a board of five directors appointed by the City Commission of the City of Salina, Kansas" The City of Salina is audited by other auditors who issue their separate reports that do not include the financial activities of the Authority. The Authority accounts for its self-supporting activities and employs the accrual basis of accounting in all material respects. ':1 ¡ :~ :J ". h The following directors served during the period of our examination: Kenneth C. Stephenson, Chairman Roger Morrison, Vice-Chairman Charles B. Roth, Secretary Bob Ott, Treasurer, Term commenced March 1, 1989 Charles Walker, Assistant Secretary/Treasurer Thomas J. Kennedy, Term ended February 28, 1989 The following officials, appointed by the Salina Airport Authority Board of Directors, served during the period of our examination: .I Timothy F. Rogers, Executive Director Donald C. Kneubuhl, Director of Operations Account Groups The Authority has established two account groups, th~ Airport Revolving Account group and the Building Revenue Account group. The Building Revenue Account group is for segregation of monies and establishment of reserves as required by revenue bond ordinances. The provisions of the revenue bond ordinances have been complied with. The Airport Revolving Account group includes all financial activity not included in the Building Revenue Account group. I I Fixed Assets Fixed assets are stated at cost. Depreciation is computed using the straight-line method based on estimated useful lives as follows: I Equipment Buildings Airfield and Other Improvements 5 - 10 years 15 - 30 yeat'S I 6 - 20 yeat's I I II 1 (Continued> Page 14 I I I I (Continued) I Grants from the Federal Aviation Administration The Salina Airport Authority has received grants from the Federal Aviation Administration to make capital improvements including runway and taxiway improvements, land acquisition, emergency facilities and equipment, snow removal equipment and airport master plan, studies. These grants are accounted for on a reimbursement basis whereby costs are incurred prior to the actual cash receipt of the grant. Receipts are credited to the Federal Aviation contribution account. Depreciation on the assets acquired with these receipts is charged to the Federal Aviation contribution account. I , Vacation and Sick Leave All permanent full-time employees with one year of employment are eligible for vacation benefits in varying annual amounts. Employees are allowed to accumulate and carry forward unlimited hours of vacation. The vacation benefit liability is accrued as it is incurred. ~ I I I Sick leave benefits accrue to all full-time employees at the rate of one working day per month with no maximum accumulation. Upon termination of employment, employees are paid an amount equal to one-third of the unused and accrued sick pay. An estimated liability for unused sick leave is accrued. I NOTE 2: CASH AND INVESTMENTS Kansas municipalities, such as the Authority, are authorized by Kansas statutes to invest funds in: I I , I I I I, (1) Temporary notes or no-fund warrants issued by the investing governmental unit, (2) Time deposit, open accounts or certificates of deposit, (3) Time certificates of deposit, (4) Repurchase agreements, and (5) United States Treasury bills or notes with maturities not exceeding six months. Deposits or investments with qualified financial institutions are to be secured by a bond or by the pledge of certain types of securities specified by statute. Cash and investments of the Authority deposited with financial institutions were 10Ø~ insured or collateralized by securities provided by such depository financial institution at December 31, 1989 and 1988. Composition of cash in bank balances: Decembet' 3h 1989 1988 Bank IV, Salina, Kansas National Bank of America, Salina, Kansas $1,508, 727 52.513 $1,5&1,240 $ 134,249 4&0.039 594,288 $ ---------- ---------- ---------- ---------- (Continued) n_~- 1C:: I I (Continued) I The Building Revenue Bond agreements for the Series 1984 and Series 1985 Building Revenue Bonds require a set-aside Bond Reserves at December 31,1989 of $50,1211210 and $40,121121121 respectively. I Composition of Bond Reserve certificates of deposit: December 31. 1989 U88 I Bank IV, Salina, Kansas National Bank of America, Salina, Kansas $ 2121,121121121 71.424 91, 424 $ 2121,121121121 4121.&&4 &121,&&4 . $ $ . ---------- ---------- ---------- ---------- The board of directors of the Authority resolved on May 14, 1986 to create a restricted account for economic development. I Composition of economic development account: First National Bank and Trust Co., Salina, Kansas Repurchase Agreements First National Bank and Trust Co., Salina, Kansas December 31. 1989 1988 $ 27,959 $ 45,779 2121.121121121 82121.121121121 $ 47,959 $ 8&5, 779 ---------- ---------- ---------- ---------- I I I The Building Revenue Bond agreements for the Series 1984 and Series 1985 Building Revenue Bonds require a set-aside Replacement and Depreciation Reserve at December 31, 1989 of $ 5121,121121121 and $40,0121121 respectively. I Composition of Replacement and Depreciation Reserve certificates of deposit: . National Bank of America, Salina, Kansas First National Bank and Trust, Salina, KS December' 31. 1989 198~ $ 7121,121121121 $ 4121,121121121 20.121121121 2121.121121121 $ 9121,121121121 $ &ø,øØø ---------- ---------- ---------- ---------- . . . n_..- tL . - ~ (Continued) I ! I I I I I ~ (Continued) NOTE 3: LEASES Buildings Constructed by Tenants The Authority has authorized the construction of buildings on the Authority-owned land by 3 tenants. The Authority has assisted in the financing of these buildings through the issuance of Revenue Bonds. These bonds are payable solely from the rentals of the leased buildings and other leased buildings included in the Building Revenue Account group. The tenants make payments directly to the authot'ity and the Authority makes payment to a trustee. The financing of these facilities by the Authority represents a direct financing lease and accordingly, the net investment in such leases is recorded in the Authority's balance sheet as a restricted asset. The following lists the components of the net investment in direct financing leases as of December 31, 1989 and 1988: I December 31cL 1989 1988 I Total minimum lease payments to be received Less unearned income Net investment in direct financing leases $1 , 061, 083 305,317 $1, 282, 979 407,071 $ 755,766 $ 875,908 ---------- ---------- ---,------- ---,------- I The leases future minimum lease rentals to be received under direct financing are as follows: Year ending December 31, 1989 1990 1991 19132 1993 19134 Thereafter $ 219,8136 219,8136 219,8% 133,813 116,597 150,1385 $1, 061, 083 I ---------- ---------- Rentals Under Operating leases The authority leases facilities and land to various concessionait'es and others. These leases are for varying periods of time from one to years and require the payment of minimum annual rentals. The following is a schedule, by year, of future rental of noncancellable operating leases as of December 31, 1989 : Year ending Decembet' 19130 11391 1992 1993 1994 Thereafter 31, 1989 ~ I $ 655,688 642,461 5138,231 383,610 257,7513 1351,226 $3,488,975 I ---------- ---------- I I The above amounts do not include contingent rentals which may be received under certain leases; such contingent rentals were $ 174,377 in 113813 and $ 204,102 in 1988. (Continued) I (Continued) I NOTE 4 LONG-TERM DEBT Revenue Bonds Building revenue bonds series 1984, originally issued May 1,1984, due in annual installments increasing from $40,000 in 1990 to $50,000 in 1991 through 1993 and to $60,000 in 1994, plus interest at 80~ of the base lending rate of The National Bank of America, Salina, Kansas. I I $250,000 I Building revenue bonds series 1985, originally issued December 1, 1985, due in annual installments increasing from $90,000 in 1990 and 1991 to $110,000 for 1992 through 1993 and to $130,000 in 1995, plus interest at 80~ of the base lending rate of The National Bank of America, Salina, Kansas. I I &40.000 Total Revenue Bonds $890,000 I -------- -------- Temporary Financing City of Salina, Kansas General Obligation Tempot'ary Not es were issued December 1, 1989 and the proceeds of these notes were received by the Authority in December of 1989. These notes are due July 31, 1990 with interest at 8.44~. The Authority expects to retire these notes with proceeds from a general obligation bond issue of the City of Salina. I I I Total Temporary Notes $2,490,000 I ---------- ---------- NOTE 5 DEFINED BENEFIT PENSION PLAN Substantially all employees of the Salina Airport Authority participate in the Kansas Public Employees Retirement System ("System")~ a multiple employer public employee retirement system. The payroll far employees covered by the System for the years ended December 31, 1989 and 1988 was $299,644 and $264,204. The total payroll was $306,719 and $286,4&2 respectively. I I Substantially all employees of the Salina Airport Authority are eligible to participate in the System after one year of employment. Employees who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1 percent of their final average salary for each year of "priot'" set'vice and 1.25 to 1. 5 pet'cent for each yeat' of "participating" service depending upon the number of years of service. Final average salary is the employee's average salary over the highest four years of credited service. Benefits fully vest on reaching 10 years of service. Vested employees may retire at age 55 to 65 with 10 years of credited service and receive reduced retirement benefits. The System also provides death and disability benefits. Benefits are established by State statute. -I I I 8 (Continued) II Page 18 -u.. ........ . . . . (Continued) Covered employees are required by state statute to contribute 4 percent of their salary to the plan. The employer is required by the same statute to contribute the remaining amounts necessary to pay benefits when due. The contribution requirement for the years ended December 31, 1989 and 1988 was $17,939 and $18,557, which consisted of $5,992 and $8,013 from the employer and $11,947 and $10,544 from employees respectively; these contributions represented 4.00' and 3.04' of covered payroll respectively. The "pension benefit obligation" is a standardized disclosure measure of the present value-of pension benefits, adjusted for the effect of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on a going concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employee Retirement Systems and employers. The System does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligation at January 1, 1987 for the System as a whole, determined through an actuarial valuation performed as of that date, was $3.61 billion. The System's net assets available for benefits on that date were $3.03 billion, leaving an unfunded pension benefit obligation estimated at $584 million. The contribution of the Salina Airport Authority for the period covered by this .'apod rlJWluntl .0;:>.1' of cuntdlllltiuni t'(f(plit'ed of all p"wticipatinu Intitin, which totalled .91, lIt9, 121 fot' the y~ar elHJed June 3fl1, II)OC). Other information related to the System can be found in tl\l! (PErm 1<}l)C) Cllfft ftd!> report is available from the Salina Airport Authority. NOTE 6 CHANGES IN ACCOUNTING METHODS During 1989 the Salina Airport Authority changed its method of accounting for grants received by the Federal Aviation Administration, its method of accounting for direct financing leases and its method of accounting for vacation and sick leave. The effect of these changes was to decrease Retained earnings at January 1, 1988 as follows Adjustment to transfer contributions from the Federal Aviation Administration from Retained Earnings to Contributions- Federal Aviation Administration Adjustment in basis of assets under direct financing leases Adjustment to record vacation and sick leave liability $4,267,010 278,574 --.-£0.434 $4,566,018 ---------- ---------- (Continlled) I (Continued) I The financial statements for the year ending December 31, 1988 have been restated to reflect these changes in accounting methods. The Authority believes that the new method more accurately reflects the earnings of the Authority and components of fund equity. I I , A reconciliation of REVENUE LESS EXPENSES as previously reported for the year ended December 31, 1988 to NET INCOME (LOSS) as restated is as follows REVENUE LESS EXPENSES as reported Less proceeds from federal assistance now reported as capital contributions Add loss on building subject to a direct financing lease Less current sick leave and vacation pay accrual Add depreciation on assets subject to direct financing leases Less principal collected on direct financing leases $ 632,502 I (980,985) I 160,938 (5,213) I 45,000 I (107.&26) -------- -------- I NET INCOME (LOSS) as restated $(255,384) NOTE 7 CASH FLOW INFORMATION In 1988 the Authority adopted Statement of Financial Accounting Standard No. 95 which requires a statement of cash flows in the place of a statement of changes financial position. I I The Authority considers all short term investments with an original maturity of three months or less to be cash equivalents. I I I II I II I 81 Page c:ø __n --=' ~ -.~-' ~..-.. AIRPORT REVOLVING ACCOUNT BALANCE SHEETS December 31, 1 989 198E~ ASSETS CURRENT ASSETS Cash on hand Cash in banks Accounts receivable Prepaid expenses Notes receivable-current $ 50 1,508,727 10,783 9,402 43,800 pot't ion TOTAL CURRENT ASSETS $ 1,572,762 RESTRICTED ASSETS $ 47.959 FIXED ASSETS Land Buildings Airfield and Equipment $ other improvements 5,447,059 7,340,075 950.672 Less-accumulated depreciation $13,737,806 (3,307.246) TOTAL FIXED ASSETS $10,430.560 OTHER ASSETS Bond issue costs Long-term note receivable $ 50 134249 9668 53.786 $ 197.753 $ 865.779 $ 51,000 3,098,462 6,691,492 864,538 $10,705,492 (2.695,939) $ 8,009.553 $ 5,062 $ 227.350 200,192 $ 232.412 $ 20Ø.192 $ 69,588 $ 177, 115 1,443 '3',666 1, 185 ~ì, 719 17,849 37,025 2~i, 651 6~¡, 378 $ 127,090 $ 281,529 2,4'1Ø.000 $ 2.617.090 $ 281,529 TOTAL OTHER ASSETS TOTAL ASSETS $12,283,693 ----------- ----------- LIABILITIES CURRENT LIABILITIES Accounts payable Payroll deductions Defert'ed rent Accrued interest Accrued payroll and benefits Accrued property taxes TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Temporary financing TOTAL LIABILITIES (Continued) Paoe 21 $ 9,273,277 ----------- ----------- (Continued) EQUITY CONTRIBUTIONS Federal Aviation Administration RETAINED EARNINGS Restricted for economic development Unrestricted retained earnings TOTAL RETAINED EARNINGS TOTAL EQUITY TOTAL LIABILITIES & EQUITY P~n.. p;;J I I I Decembet' 31.- lq89 j.988 I $ 5.097.121 $ 47,95q 4.521.523 $ 4.5&Q,482 $ 9,666,&Ø3 $12,283,6Q3 ----------- ----------- LiL!\8Ø,43Ø I I $ B65,779 3, ï:~45, 53Q Lisj, 11, 318 I ~IQ1, 748 I $ 9,c~73,277 -----,------ -----.------ I I I I I I I I I I I AIRPORT REVOLVING ACCOUNT STATEMENTS OF OPERATIONS AND CHANGES IN RETAINED EARNINGS January 1 to December ~ 1989 198tt OPERATING REVENUES Building rents Agricultural land rents Other land rents Hangar rents Tank farm rents Fixed base operator Landing fees Col1missions Ramp rents Other operating revenues TOTAL OPERATING REVENUES OPERATING EXPENSES BEFORE DEPRECIATION Office and administration Office salaries Office suppli es Postage Travel expense Agricultural land expense Legal and auditing InsUt'ance Engineering Property taxes Payroll taxes Employees retirement Telephone Industrial development program Promotion Other office and administration TOTAL OFFICE AND ADMINISTRATION Maintenance Building maintenance Runways, taxiways, and ramps Equipment, gas, oil and repairs Utilities Grounds maintenance Maintenance salaries Fire department expense Other maintenance expense TOTAL MAINTENANCE TOTAL OPERATING EXPENSES BEFORE DEPRECIATION <Continued) $ 434,312 16,1211213 5,51211 33,61217 &1210 11216,432 5,913 9,61215 11, 625 2,217 $ &25,815 $ 118,21213 5,81211 2,943 8,775 36,197 77,12110 44,322 1,953 24,944 5,992 5,3&121 37,284 84,731 3121,392 $ 483,91217 $ 32,69121 17,994 21,115 42,1217121 7,845 199,89121 4,12127 1Ø,486 $ 336, 117 $ 82Ø,Ø24 $ 51218,856 37,914 8,265 31,656 600 %, 133 28,71212 8,973 1121, 119 125 $ 731,343 $ 11218,351 3,492 2,909 13,792 5,879 36,251 71,71217 36,915 65,378 32,634 7,377 6,019 20,000 23,549 22,731 $ 456,984 $ 28,714 26,728 24,743 42,945 3,810 183,328 7, ;:::04 11 , ~502 $ 328, '374 $ 785, ~358 (Continued) OPERATING EARNINGS (LOSS) BEFORE DEPRECIATION DEPRECIATION OPERATING EARNINGS (LOSS) OTHER INCOME (EXPENSE) Intet'est income Interest expense Gain (Loss) on sale of property TOTAL OTHER INCOME NET INCOME (LOSS) ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH FEDERAL CONTRIBUTIONS INCREASE (DECREASE) IN RETAINED EARNINGS RETAINED EARNINGS, January 1, AS PREVIOUSLY REPORTED ADJUSTMENT APPLICABLE TO PRIOR YEARS RETAINED EARNINGS, January 1, AS RESTATED TRANSFERS FROM BUILDING REVENUE ACCOUNT RETAINED EARNINGS, DECEMBER 31 0", n " Õ-J I. January 1 to Decembet' 31, 1989 1988 $ (194,209) $ (54,615) $ 612,634 $ 548,923 $ (806,843) $ (603,538) $ 67,157 $ 74,893 <14,508) (414) 83,074 $ 52,235 $ 157, %7 $ <754,608) $ ('~45,571) $ 396,949 $ 367,564 $ (357,659) $ (78, 00n I I I I I I I I I I I I I I I 8 8 II $4,111,318 $8,1:36,243 $ (4, ,~87, 444) $4,111,318 $3,El48,799 $ 815,822 $ 2:40,526 $4,569,481 $4,111,318 ------------ ------------ ---,------ ---,------ AIRPORT REVOLVING ACCOUNT STATEMENTS OF CASH FLOWS WIIŒCT METHOD) CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash paid to suppliers and employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchase of property, plant and equipment Proceeds fro. federal grants Advance for tenant Proceeds from sale of building and land NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new borrowing Interest paid Payments received on long-term debt NET CASH PROVIDED BY FINANCING ACTIVITIES CASH TRANSFERS FROM BUILDING REVENUE ACCOUNT INCREASE IN CASH & CASH EQUIVALENTS CASH BALANCE-January 1 CASH BALANCE-December 31 1).:\f1P ;::or::¡ Januat'Y 1 to DecemQ~~31 , 113813 11388. $ 559,374 $ 763,Ql46 (885,481> (726, ~i86) $ (326.1Ø7> $ 36.4,60 $ 72,996 (3,042,206) 613,642 (1,900) 5,700 $ 74, Elq3 (1,761,793) 980, <3'86 387, QI00 $(2,351,768) $ (318. ~114) $ 2,4130,000 $ (2,496) 29,728 16.Ø22 $ 2.517,232 $ 16,Ø22 $ 717,302 $ 442, ~¡&2 $ 556,658 $ 176, 1.30 1,000.078 823, ~~48 $ 1,556,736 $ 1,000,Ø78 ----------- ------------ ----------- ------------ AIRPORT REVOLVING ACCOUNT CAPITAL EXPENDITURES Januat'Y 1 to Decembet' 31, 1989 ,1988 $ 77,149 $ 13,536 2,922 3,05& 48& 850 431 1,424 2,7% 1. 491 $ 94.524 $ 9.617 EQUIPMENT Runway & ramp sweeper Crack sealing equipment Communication equipment Shop equipment Restaurant equipment Office equipment Portable welder TOTAL EQUIPMENT BUILDINGS Kansas Army National Guard Bldg. Kansas Army National Guard Armory Kansas Highway Patrol Building #959 roofing Water Well Road overpass Ag. ChelR. bui ld i ng i mpt'ovement s Soo Plastics building Palmer Tt'ucking Port-A-Port improvements International Pilot Training building Kansas Color Corporation Airport Industrial Center Building #673 Incubator MMA/FAA/KHP construction Building #509 Terminal bldg. improvement Salina Vortex, Bldg. #217 improvement Tank improvements $ 44,562 58,9&9 14,849 11,500 300,000 47,374 767,108 4,692 15,417 179,820 146,794 84,179 35,701 391,767 140,396 TOTAL BUILDINGS $2.243.128 <Continued) $ ~f75, 574 5,784 23,115 é:23, 073 25,637 43,242 &6,825 23.400 I I I $ I 88&.650 I I I OTHER IMPROVEMENTS AlP 05 Master plan update AlP 07 Lighting project AlP 08 Runway taxiway paving AlP 09 Runway 12/30 paving AlP 10 Lighting project AlP 11 Engineering TOTAL OTHER IMPROVEMENTS TOTAL CAPITAL EXPENDITURES (Continued) January 1 to December 31, 198q li!38 $ 5,484 642,783 316 $ 648.583 $2,986,235 ---------- ---------- $ ~), 370 ,~, 030 1 ,~, 556 98B,2Q0 2E., 495 $1.034,.741 $1,931,008 ---------- ---------- BUILDING REVENUE ACCOUNT BALANCE SHEETS ASSETS December :tL... 1989 1988 $ 52,513 $ 460,039 1, 038 5,553 12,800 12,944 $ 66,351 $ 478,53& CURRENT ASSETS Cash in banks Accounts receivable Notes receivable-current portion TOTAL CURRENT ASSETS RESTRICTED ASSETS Net investment in direct financing leases Certificates of deposit Provision for bond reserve Provision for replacement and depreciat ion TOTAL RESTRICTED ASSETS $ 755,765 $ 875,908 $ 91,424 $ 60,664 90,000 60,000 $ 937,189 $ 9%,572 FIXED ASSETS Land Buildings TOTAL FIXED ASSETS $ 1,018,057 $1 , 018, 058 2,132,22& 2,237,695 $ 3,150,283 $3,255,753 (1,0&0,350> (999, 1&0> $ 2,089,933 $2,256,593 Less-accumulated depreciation OTHER ASSETS Long-term notes receivable $ 8,883 $ 22,839 TOTAL OTHER ASSETS $ 8,883 $ 22,839 TOTAL ASSETS $ 3,102,356 $3,754,540 ----------- ----------- --.-------- --.-------- I I (Continued> I O",no :::on LIABILITIES (Continued> December 311- 1989 1988 $ 130,000 $ 110,000 300 8,808 9,460 $ 139, 108 $ 119,4&0 $ 890,000 $1, Ø00, 000 (130,000> (110,0Ø0> $ 7&0,000 $ a90,00ø $ 899,108 !.LJZl09 , 4&0 CURRENT LIABILITIES Bonds payable-current portion Deferred rent income Accrued bond interest TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Bonds payable Less-current portion TOTAL LONG-TERM LIABILITIES TOTAL LIABILITIES EQU ITY RETAINED EARNINGS Restricted for revenue bond reserves Restricted for investment in direct financing leases Unrestricted retained earnings $ 180,000 $ 1&0,000 755,767 1,267,481 B75,908 -1~]12, 172 TOTAL RETAINED EARNINGS $2,203,248 $2,745,080 TOTAL LIABILITIES & EQUITY $3,102,356 $3,754,540 ---------- ---------- ----------- ----------- """"""'~_4-"'U'--"' -~'~.. ~'.- .-."",,"-,", ,',.0.- Co< ..N. ,.,."'- . "n'", "'"'. .... ... BUILDING REVENUE ACCOUNT STATEMENTS OF OPERATIONS AND CHANGES IN RETAINED EARNINGS . ,>. , ~~ $ I I I I I I I I I I I I I I .1 I I I II REVENUES January 1 to December 31. 1989 1908 OPERATING REVENUES Building rents Agricultural land Other land rents Tank farm rent t'ent s TOTAL OPERATING REVENUES OPERATING EXPENSES BEFORE DEPRECIATION Agricultural land expenses OPERATING EARNINGS BEFORE DEPRECIATION DEPRECIATION OPERATING EARNINGS OTHER INCOME (EXPENSES) Interest income Interest expense TOTAL OTHER INCOME (EXPENSES) NET INCOME RETAINED EARNINGS, January 1, AS PREVIOUSLY REPORTED ADJUSTMENT APPLICABLE TO PRIOR YEARS RETAINED EARNINGS, January 1, AS RESTATED TRANSFERS TO AIRPORT REVOLVING ACCOUNT RETAINED EARNINGS, DECEMBER 31 $ 270,331 10,740 19,890 450 $ 301.411 $ 301,411 $ &8,141 $ 233,270 $ 130,799 (90, 079) $ 40.720 $ 273.990 $2,745,080 $2.745.080 $ (815.822) $2,203,248 ---------- ---------- 149,868 25,004 21,270 <=.--..,<= ..¡,- ;J $ 196,&&7 2,376 $ 194,2CH $ 76,000 $ 118,291 $ 114,273 (92, %8) $ 71,8% $ 190.187 $3,173,993 (278,574) $2..895.419 $ (340.526) $2,745,000 ---.------- ---'------- BUILDING REVENUE ACCOUNT STATEMENTS OF CASH FLOWS (DIRECT METHOD) CASH FLOW FROM OPERATING ACTIVITIES Cash received from customers Cash paid to suppliers and employees NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Interest received Proceeds from sale of building NET CASH PROVIDED BY INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Principal payments on debt Contribution to bond reserve Interest paid Principal received on financing leases Payments received on long-term debt NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES CASH TRANSFERS TO AIRPORT REVOLVING ACCOUNT INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS CASH BALANCE-January 1 CASH BALANCE-December 31 n~"n 71 January 1 to Decembe~ 1989 1188 $ 306,226 $ 199,691 ----13.037> $ 306.226 ~6.&54 $ 130,799 $ 164,864 --É.0.000 $ 130.799 $ 184.864 ( 110, 000) (145,000) (60,000) (90,730) (93,785) 120, 141 107,623 14.100 ---11.374 $ (126.489) LJJ.J.9.788) $ <717. 302) $ (442 5&2) --~ $ (406,7&&) $ (18O,832) $ 460.703 LMl.535 $ 53,937 4&O,703 $ ---------- ---------- ---------- ---------- .~",_,l,""_"."""'.'_"-' <ó. , ,-.... """."'" " ",. ,,'. BUILDING None TOTAL CAPITAL EXPENDITURES Building Revenue Bonds Series 1984 Building Revenue Bonds Series 1985 Building Revenue Bonds Series 1984 Building Revenue Bonds Series 1985 ~ %"",.~""._-'""",..<',. '," "',", I BUILDING REVENUE ACCOUNT CAPITAL EXPENDITURES I January 1 to December 31. 1 989 1 ~~88 I I s $ I I $ $ ----------- ----------- ----.------ ----.------ BONDS OF INDEBTEDNESS December 31, 1989 I I Original Pri nci pal Outstanding Issue Paid Balance $ 400,000 $ 150,000 $ 2::;0, 0Ø0 900.0Ø0 260.000 6"'0. 0Ø0 $1,300,000 $ 410,0Ø0 $ 8()0, 0Ø0 ---------- ---------- ----------- ---------- ---------- ____0____-- I I I I BONDS OF INDEBTEDNESS Decembet' 31, 1988 I I Original Issue Pri nci pal Paid Outstanding Balance I $ 400,000 $ 110,000 190.0Ø0 $ 300,Ø0Ø ---------- ---------- 21)0, ØØØ I I $ 9Ø0.0Ø0 71Ø.ØØ0 $1,3ØØ,0Ø0 $l,ØØØ,ØØØ ---------- ---------- ----------- ----,------ I I 8 I I BUILDING REVENUE BONDS-SERIES 1984 December 31, 198<3 I Date of Issue: Amount of Issue: Interest Rate: Maturity Date: Principal Paid: Outstanding Balance: May 1, 1984 .400,000 * I I May 1,1994 .150,000 .250,000 Schedule of Bond Principal Payments I Due in Year Bond Principal I 1990 1991 1992 1993 1994 . 40,000 50,000 50,000 50,000 60,000 I .250,000 I I I I -------- -------- *The interest rate for each six month payment will be eighty percent (80~) of the National Bank of America, Salina, Kansas base lending rate in effect on the beginning date of each six month period. I I I I I I n~"ð y;¡ ,--------"""",-",~,-",,-,,-,>,~ -""",,"-- -~..~".. "'-'.- . I BUILDING REVENUE BONDS-SERIES 1985 December 31, 1989 I Date of Bonds Date of Issue Int erest Rat e Maturity Date Principal Amount Outstanding Balance December 1, 1985 January 17, 198& * December 1, 1995 $900,000 $640,000 I I I Schedule of Bond Principal Payments I Due in Year Bond Principal I 11390 19131 11392 1993 1994 1995 $ 90,000 130,000 110,000 110,000 110,000 130.000 I I $ 64Ø,ØØØ --------- --------- I *The interest rate for each six _onth payment will be eighty percent (8Ø~) of the National Bank of America, Salina, Kansas base lending rate in effect on the beginning date of each six month period. The rate of interest shall not be less than a rate of eight pet'cent (8~). I I I I I I I I I Workmen's Compensation and Employer's Liability Comprehensive General Liabi I i ty Rental Buildings- Industrial Airport Terminal and Rental Buildings Vehicles and Equipment Public Employees Blanket Bond Public Officials and Employees Liability INSURANCE IN FORCE Decembet' 31, 1989 Type of CoveraQe Bodily injury and property damage Fire and lightning, extended coverage, vandalis. and malicious mischief-loss of rents Fire and lightning, extended coverage, vandalism and malicious mischief Amount of CoveraQe Co-][ nsurance PI!rcentaQe $ 100,000 500,000 1,196,616 2,050,0Ø0 Liability 500,000 Physical damage-equipment 584,747 Medical payments 2,0Ø0 Uninsured motorists 25/50,000 Honesty blanket position bond coverage 90;< 10Ø,0ØØ Errors & omissions excluding asbestos, excluding pollution coverage on a claims made basis 5ØØ,ØØ0 ,...,"'-"--"'-""'--""'-~""" 4__', -- .;-. -,"-"'" "."." ,....:I". ,,- ,~ '~,'~'- .'.0, , - , SCHEDULE OF FEDERAL ASSISTANCE CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106 For the year ended December 31, 1989 I I I I I I I I I ProQram Title Federal ID Number Expenditures During Year Amount of Awat'ds DEPARTMENT OF TRANSPORTATION Federal Aviation Adllinistration 3-20-0072-09 Runway 12/30 paving $ 5,484 $ 29,6&8 Federal Aviation Administration 3-20-0072-10 Light ing pt'oj ect 642,783 583,974 Federal Aviation Adlllinistration 3-20-0072-11 In preapplication stage 316 * $ 648,583 $ 613,642 ---------- ---------- ---------- ---------- * See AIRPORT REVOLVING ACCOUNT, CAPITAL EXPENDITURES at page 27. I I I I I I I I I II SUMMARY OF FEDERAL ASSISTANCE FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106 For the year ended December 31, 1989 Pt~oQram Ti tIe Expend i t IJt'e s Dllt'i nQ Yeat' Federal ID Number Federal Aviation 1985-1991 1985 1986 1987 1988' 1989 Administration Master plan 3-20-0072-05 update . 1,3% 25,808 21,480 5,370 . 54,054 ---------- ---------- TOTAL Federal Aviation Administration Runway overlay, fire station and supporting communications 1985 3-20-0072-06 1986 1987 1988 1989 Amount of ---...-.&' a r c:!L $ 24,189 19,&27 4,514 . 48,330 ---------- ---------- $ 5,480 $ 108,037 10l,781 955,907 75'+, 335 8~5,612 $1,069,424 $ 9411,728 ---------- ----------- ---------- ----------- TOTAL Federal Aviation 1986 1987 1988 1989 Administration Lighting project 3-20-0072-07 $ 26,&53 445,565 2,030 TOTAL $ 474,248 ---------- ---------- Federal Aviation 1986 1987 1988 1989 Administration Runway taxiway paving 3-20-0072-08 $ 5,079 1,087,484 12,556 TOTAL $1, 105, 119 ---------- ---------- Federal Aviation Adlinistration Taxiway overlay 3-20-0072-09 198& 1987 1988 1989 $ 6,580 11,627 982,805 5,48i $1,00&,496 TOTAL ---------- ---------- (Ccontinued) $ 423,723 3;, 100 $ 42&,823 ---------- ---------- $ 983,026 11,581 $ 994" &07 ------,---- ------.---- $ 876,179 _29,&68 $ 905,847 -------,--- -------,--- SUMMARY OF FEDERAL ASSISTANCE FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106 For the year ended December 31, 1989 (Continued) ProQram Ii tIe Ex pend i tlwe s Dud nQ Yeat' Federal ID Number Federal Aviation Adlinistration Lighting project 1988 3-20-0072-10 * $ 1989 TOTAL Federal Aviation Ad8inistration Preapplication 1988 3-20 0072-11 * $ 1989 3-20-0072-11 30,346 642,783 $ 673,129 ---------- ---------- $ 1,634 316 1, 950 ----------- ----------- * In 1989 costs incurred in connection with project 09 were transferred to projects 10 and 11. These costs covered overall design work and the transfer has been approved by the Federal Aviation Adminis- tration Amount of Awards $ 583,974 $ 583,974 ------,---- ------.---- ---------- ------,---- -8 HARRISON & ARNEIT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGrt/E 0 H^nnISON. C PA 1110M^S G AIlIJElT, CPA All LECKßM~D, CPA (913) 827-7244 "19 EAST CRAWFonD SALINA, KANSAS 67401 February 8, 1990 Mr. Timothy Rogers, Executive Director Salina Airport Authority Terminal Building 1120 Salina Airport Industrial Center Salina, Kansas 67401 Dear Mr. Rogers: ~/e have, as part of the annual audit, made a review of the flm, of transactions, documentation of transactions, method of authorizing transactions and in general the internal control over accounting data and administration. The review we have made followed the Minimum Standard Audit Program prescribed by tile State of Kansas Director of Accounts and Reports, Department of Administration and approved by the State Municipal Accounting Board, September 15, 1987. A system of internal control includes the measures and methods employed to safeguard assets, ascertain the accuracy and reliability of the accounting data, promote efficiency and encourage adherence to prescribed managerial policies. In general we found transactions to be well documented, properly authorized and accurately recorded. We understand that much of the time only one staff member will be in the office and that. this prevents much of the separation of duties that would normally be found. It is unlikely that increasing staff size would be a cost effective internal control improvement and we do not believe that this lack of separation of duties constitutes a mateI'ial deficiency in internal can trol. We noted the following items that we believe warrant attention: 1. A check protection is not used. The use of such protection may be warranted, as an alteration in a check could result in a material loss. 2. Petty cash reimbursement vouchers are not cancelled. cancellation would prevent duplication of payment. Such 3. ~e find no written policy regarding which purchases require board approval and which purchases may be approved (authorized) by management. 4. ~e find no written policy regarding which costs will be capitalized as improvements and which costs will be expensed currently. I Page 2 of 2 I I I 5. Our review of lease since the lease was its obligations for coverage. files indicated that it has been some tiRe documented to insure that the lessee has met paYRent of taxes and for adequate insurance I 6. Our review of the lease abstract files indicated that it has been some time since the file was updated. This file will provide 3 list on request of base by expiration date so that will help in- sure that no basis expense unexpectedly. I I We thank you for this opportunity to serve the Airport. further assistance, please let us know. If we may bl? of I Yours very truly, I Thomas G. Arnett, CPA I TGA: Js I I I I I I I I I