Audit Report - 1993
SALINA AIRPORT AUTHORITY
Salina, Kansas
COMPONENT UNIT FINANCIAL REPORT
Years Ended December 31, 1993 and 1992
Prepared by the Management
of the
Salina Airport Authority
SALINA AIRPORT AUTHORITY
TABLE OF CONTENTS
COMPONENT UNIT FINANCIAL REPORT
Years Ended December 31, 1993 and 1992
INTRODUCTORY SECTION Page
Letter of Transmittal 1
Principal Officers 10
Authority Staff Members 11
Organizational Chart 12
Certificate of Achievement 13
Salina Municipal Airport Aerial View 14
FINANCIAL SECTION
Independent Auditor's Report 15
Financial Statements:
Comparative Balance Sheets - Assets 17
Comparative Balance Sheets - Liabilities & Equity 18
Comparative Statements of Operations and Changes
in Retained Earnings 19
Comparative Statements of Cash Flows 20
Reconciliation of Operating Loss to Net Cash Flows
from Operating Activities 21
Notes to Financial Statements 22
Supplemental Information:
Schedules of Operations and Changes in Retained Earnings 40
Capital Expenditures 42
Bonds of Indebtedness 43
Building Revenue Bonds - Series 1984 44
Building Revenue Bonds - Series 1985 45
General Obligation Economic Development Bonds - Series 1990-A 46
General Obligation Economic Development Bonds - Series 1990-B 47
Leasehold Revenue Bonds - Series 1991 48
General Obligation Bonds - Series 1993A 49
General Obligation Bonds - Series 1993B 50
Insurance in Force 51
Schedule of Federal Assistance 52
Comparison of Gross Cash Balances with Depository Security 53
Page
STATISTICAL SECTION
Operating Revenue History
Operating Expense History
Federal Financial Assistance History
Capital Expenditure History
Revenue Bond Coverage
Principal Customers
Local Government Property Tax Rates, Direct & Overlapping
Property Tax Revenue
Air Traffic, Fuel Flowage, Enplanements Trends
Major Employers
Salina Population, Demographic and Labor Statistics
54
55
56
57
58
59
60
61
62
63
64
OTHER INDEPENDENT AUDITOR'S REPORTS
Independent auditor's report on internal control structure
based on an audit of financial statements performed
in accordance with GOVERNMENT AUDITING
STANDARDS
65
Independent auditors's report on compliance based on an audit
of financial statements performed in accordance with
GOVERNMENT AUDITING STANDARDS
67
Independent auditor's report on schedule of federal
financial assistance
68
Independent auditor's report on the internal control structure
used in administering federal financial assistance program
69
Independent auditor's report on compliance with the general
requirements applicable to federal financial assistance programs
72
Independent auditor's report on compliance with specific
requirements applicable to nonmajor federal financial
assistance program transactions
73
Schedule of independent auditor's findings
74
II
~ Salina Airport Autholrity
d.A"~ Salina Municipal Airport I Industrial CEmter
Chairman Vice-Chairman Secretary Treasurer Assistant Secretary I Treasurer
BOB E. OTT DOROTHY W LYNCH RICHARD A. RENFRO CHARLES STEVENS, JR. JOSEPH M. RITTER
Executive Director: TIMOTHY F. ROGERS, A.A.E. Operations Director: DONALD C. KNEUBUHL Board Attorney: L.O. BENGTSON
April 13, 1994
Salina Airport Authority Board of Directors
3237 Arnold Ave.
Salina, KS 67401
To the Board of Directors of the Salina Airport Authority:
The Component Unit Financial Report of the Salina Airport Authority (the "Authority") for the fiscal year
ended December 31, 1993 is hereby submitted in accordance with the Kansas Statutes Annotated
(K.S.A.27-324). Responsibility for both the accuracy of the data presented and the completeness and
fairness of the presentation, including all disclosures, rests with the Executive Director of the Authority.
To the best of my knowledge and belief, the data as presented is accurate in all material aspects, that
it is presented in a manner designed to fairly set forth the fiscal position and results of the operation
of the Authority as measured by its financial activity, and that all disclosures necHssary to enable t~e
reader to gain maximum understanding are included in the report.
ORGANIZATION OF THE REPORT
The Authority applies the standards for preparation of local government financial reports recommended
by the Government Finance Officers of the United States and Canada (GFOA). The Authority's 1993
Component Unit Financial Report is presented in four sections:
Introductory Section - contains this letter of transmittal, a list of the Authority's principal
officers, a listing of Authority staff members, an organizational chart, the GFOA Certificate
of Achievement for Excellence in Financial Reporting for fiscal year 1992, and an aerial
photo of the Salina Municipal and Airport Industrial Center.
Financial Section - includes the independent auditor's report, the Authority's 1993
financial statements and supplemental schedules.
Statistical Section - includes selected financial and demographic information which
highlights economic and demographic trends.
Other Independent Auditor's Reports Section - includes reports concerning the
Authority's internal control structure, compliance with Comptroller General of the United
States government auditory standards and compliance with auditory stanljards due to
receipt of federal financial assistance.
( 1 )
3237 ARNOLD. SALINA, KS 67401-8190. Off: (913) 827-3914. Fax: (913) 82,'-2221
REPORTING ENTITY
The Salina Airport Authority is a body corporate and politic. The Authority was created by the City of
Salina in April, 1965 (Sec. 4-16, Salina City Code) pursuant to the authority granted by the City by the
surplus property and public airport authority act of the State of Kansas (KSA 27-315 et seq.) The
Authority was created for the purpose of accepting as surplus property portions of the former Schilling
A.F.B. which was closed by the United States Department of Defense in June, 196Ei. By quitclaim deed
the Authority received over 3,500 acres of land and numerous buildings 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 Board appoints the Executive Director, who is the chief executive and administrative officer of the
Authority. The Executive Director hires the remaining employees of the Authority. The Executive
Director and his staff of twelve employees manage and operate the Salina Municipal Airport and the
Salina Airport Industrial Center.
Based upon the degree of fiscal and oversight responsibility exercised by the Authority's governing
board, the Authority is considered a component unit of the City of Salina under the criteria set forth by
the Governmental Accounting Standard Board (GAS B) Statement No. 14.
The Salina Municipal Airport is the only commercial service airport serving Salina/Saline County and
the 22-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 the Kansas State University - Salina Aeronautical Technology Department.
The campus of K-State Salina is located adjacent to the airport. The K-State Salina Department of
Aeronautical Technology offers degrees in professional flight training.
The Salina Airport Industrial Center is home for sixty-four businesses and organizations. Forty-four of
the businesses and organizations are tenants of the Authority. One of the primary functions of the
Authority is to facilitate the continued growth of jobs and payroll at the Airport Inclustrial Center. The
Authority works in partnership with the City of Salina, Saline County and the Salina Area Chamber of
Commerce for the retention of existing business and industry and the recruitment of new business and
industry.
ECONOMIC CONDITIONS AND OUTLOOK
Local Economy
The City of Salina has continued to demonstrate economic strength, as compared to other regions of
the nation and state. There are 90 manufacturer/processors in the City/County area. Manufacturing
employment is approximately 6,425. Salina has also developed into a regional health care center and
a retail trade center for the 22 county (365,200 people) area of North Central Kansas. Salina's historic
agricultural industry is still a strong economic contributor.
(2)
Overall, during 1993, Salina/Saline County experienced increases in manufacturin9 employment (6.2%),
retail sales (13.2%), and population (.84%). Salina's manufacturing base remains well-entrenched and
is experiencing steady growth. With the availability of a well-trained labor force, the presence of higher
education, and access to national transportation systems, Salina is a good location for the expansion
of existing business and industry and the location of new businesses and industry. Saline County is
the only county in the state's North Central Kansas Region with a per capita income above that of the
state and has grown consistently at higher rates than the region in terms of both employment and
income. In Saline County, government accounts for a smaller share of economic activity, whereas the
service, retail trade, and manufacturing sectors account for the greater share of Hconomic activity. In
the future Salina and Saline County should maintain steady economic growth.
Economic Condition of the Airport and Airport Industrial Center
As of December 31, 1993 businesses and organizations at the Airport and Airport Industrial Center
employed a.n estimated 4,044 employees. Over 75% of the total number of employees live within the
Salina city limits. Total payroll for 1993 was an estimated $89,437,149. In 1993 local purchases by the
Airport and Airport Industrial Center businesses and organizations totaled an estimated $98,115,974.
Less than 35% of total business volume was local, which means that over 65'% of the goods and
services produced by all businesses are exported outside of the City of Salina.
In 1993 the Airport and Airport Industrial Center attracted an estimated 46,561 visitors whose average
stay was 1.9 days. Airport and Airport Industrial Center visitors expended an estimated $3,830,696
while in Salina.
Future Economic Outlook
The future economic outlook for both Salina and the Authority continues to look favorable. Continued
growth in service, retail and manufacturing sectors is expected. The Salina Area Chamber of
Commerce forecasts that approximately 925 new jobs will be added to the economy during 1994.
Authority tenants, such as Beech Aircraft Corporation, Tony's Pizza, Inc., the Kansas Army National
Guard and Kansas State University - Salina continue to work on facility expansion plans. These
expansions will result in additional jobs, payroll and student enrollment.
INITIATIVES AND DEVELOPMENT
Salina Municipal Airport
Secured a $218,527 Federal Aviation Administration Airport Improvement Program grant for
installation of new airfield guidance signs as required by Federal Aviation F~egulations Part 139.
The grant funds 90% of the project costs. Wilson & Co. of Salina is the project engineer.
Negotiated an engineering design contract with Bucher, Willis and Ratliff of Salina for the
rehabilitation of aircraft parking aprons. This will be a multi-year project Wllich will receive 90%
(3)
funding from the Federal Aviation Administration. It is anticipated that the FAA will award a $1.4
million grant in 1994 for phase 1 construction.
Increased landing fees for commercial aircraft operations.
Adopted a Federal Aviation Regulation, Part 107, Airport Security Program in order to support
new demand for public charter flight activity out of Salina.
Salina Airport Industrial Center
Supported building expansions, new building construction, and manufacturing expansions
completed or started by the following firms:
Salina Vortex
S. P. Plastics
Power Ad
Snak-Atak
Blue Beacon
Palleton
Zany Paint Corporation
KASA Fab
Exide Battery
Building expansion
New machinery
New building/land sale
New building
New hangar
Building lease
Building lease
New machinery/building improvements
Building lease
Financial Affairs
Development of a multi-year financial forecast to assist with long-term planning and goal setting.
Adoption of a 1.90 mill levy to fund airfield improvements ($160,000) and upgrade to airport
industrial center buildings ($150,000) in 1994.
Issuance of $650,000 in Airport Authority general obligation bonds. These bonds were rated "A"
by Moody's Investors Service. Proceeds from the sale of Series 1993-A Bonds ($335,000) will
be used to finance demolition of an aviation fuel pumphouse and associated underground
storage tanks and the preparation of a site for industrial development. Proceeds from the sale
of Series 1993-B Bonds ($275,000) will be used to provide matching funds for $2,345,680 of
Federal Aviation Administration grants.
Change In Accounting
After extensive study and review by the Authority's Board of Directors and staff, the Authority approved
a one-time adjustment to accumulated depreciation. The Authority determinecl that the useful lifes
originally assigned to many fixed assets were too short. As a result, accumulated depreciation was
recalculated based upon more reasonable asset lifes. The useful life was extended on items such as
buildings that are in excellent condition and equipment such as snow plows and aircraft fire and rescue
(4)
vehicles which see limited use. The cumulative effect of the accounting change is $927,219.
During the review of accumulated depreciation, the Authority also approved t~le reclassification of
certain fixed assets from building to land. All assets reclassified were costs incurred in developing the
Authority's 257 acre Airport Industrial Center Subdivision. The costs of water line, sewer line and street
improvements had originally been allocated to buildings. These improvements hav,e since been deeded
over to the City of Salina as public use improvements. The City of Salina will be msponsible for future
maintenance and repairs. The total amount of the reclassification is $676,058.
Details concerning the Authority's changes in accounting are included in bklli~ 13: CHANGE IN
ACCOUNTING ESTIMATE.
Staff Accomplishments
The Airport Authority's executive director was accepted as a professional member of American
Association of Airport Executives (AAAE). The executive director is now permitted to use the
title of Accredited Airport Executive (A.A.E.).
Staff training was enhanced by the Airport News and Training Network which was installed.
Included in the training package was interactive television training equipment.
Environmental
Completion of the first phase of soil and ground water investigations by the U.S. Corps of
Engineers under the Defense Environmental Restoration Program (DERP).
With the U.S. Corps of Engineers, initiation of the engineering design for the removal of former
U. S. Air Force underground fuel storage tanks. This project is also aU. S. Corps DERP project.
INTERNAL CONTROL STRUCTURE AND BUDGETARY CONTROLS
The authority follows generally accepted accounting principles applicable to governmental unit
enterprise funds. Accordingly, the financial statements are prepared on the accrual basis.
Management of the Authority is responsible for establishing and maintaining an internal control structure
designed to ensure that the assets of the Authority are protected from loss, theft, or misuse and to
ensure that adequate accounting data are compiled to allow for the preparation of financial statements
in conformity with generally accepted accounting principles. The internal control structure is designed
to provide reasonable, but not absolute, assurance that these objectives are met. The concept of
reasonable assurance recognizes that: (1) the cost of a control should not exceHd the benefits likely
to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by
management.
(5)
An annual budget is prepared in accordance with the Authority's By-laws. The Authority is specifically
exempt from the budget laws of the State of Kansas (K.S.A. 27-322). The Authority is not required to
demonstrate statutory compliance with its annual operating budget. Accordingly, budgetary data is not
included in the accompanying financial statements.
RESU L TS OF OPERATIONS
Revenues
The operating revenues of the Authority increased 3.8 percent from the previous year. The increase
in rental revenues is the result of increases in industrial building occupancy. The Authority successfully
negotiated a short-term lease for its manufacturing building located at 1655 Wall Street with Exide
Corporation. The decrease in fixed base operator (F.B.O.) fees is due to lower than projected fuel
sales and steep fuel discounting by the Authority's two F.B.O.'s. The increase in landing fees is due
to increased flights by US Air Express and commercial charter operators. Other operating revenues
increased due to increases in Terminal building rental commissions and a one-time $12,400 contract
with A & K Railroad Company.
A summary of operating revenues follows:
Increase Percent
(Decrease) Increase
OperatinQ Revenues .llm3. 1992 From 1992 (Decrec~
Rental revenues $800,575 $791,974 $ 8,601 1.1%
Fixed base operator 78,392 82,345 (3,953) (4.8:)%
Landing fees 7,616 5,565 2,051 36.B%
Other operating revenues 43.744 16.136 27 .608 171 .r&
Total $930.327 $896.020 ~34.307 3.~%
Expenses
Operating expenses before depreciation increased 7.5 percent. Office and administrative expenses
increased 10.4% due to a $37,603 increase in ad valorem taxes paid by the Authority. The Authority's
53,300 sq. ft. manufacturing facility located at 1655 Wall Street accounted for $30,219 of the increase.
All other office and administrative expenses averaged a 3.5% increase. Maintenance expenses
increased 4.0% due to increases in maintenance salaries, building maintenance, airfield maintenance,
equipment repairs, and utilities.
(6)
A summary of operating expenses follows:
OperatinQ Expenses
1993.
$458,918
361 .4 1 2
~
$415,819
347.498
I ncrease Percent
(Decrease) Increase
From 1992 (Decreas.el
Office and Administration
Maintenance
$ 43,099
13.914
10.4%
4.0~
Total
$820.330
$763.317
$ 57.01~
7 .5~(Q
FIDUCIARY OPERATIONS
In 1991 the Authority entered into an Interlocal Cooperative Agreement with the Kansas Board of
Regents, K~nsas State University, and the City of Salina. Under the agreement,. the City transfers to
the Authority the proceeds from a 1/2 cent retail sales tax. The funds are dHsignated for capital
improvements to the campus of Kansas State University--Salina, College of Technology located at the
Airport Industrial Center. In accordance with the terms of the interlocal agreement, the Authority is
responsible for assuring that the sales tax proceeds are expended in a manner consistent with specific
project budgets previously approved by the Salina City Commission.
DEBT ADMINISTRATION
The outstanding long-term debt of the Authority was $4,205,000 at December 31, 1993. This debt
consists of building revenue bonds, general obligation bonds, and leasehold rE~venue bonds of the
Authority. Maturities range from 1994 through 2010 and interest rates range from 3.4% to 8.5%. Both
principal and interest are payable from proceeds of direct financing leases and the general revenues
of the Authority. Details are shown in Note 7: LONG-TERM DEBT.
CASH MANAGEMENT
All cash temporarily idle during 1993 was invested by the Executive Director of the Authority in short-
term investments to attain the highest possible return consistent with the Authority's liquidity needs.
All investments are in compliance with K.S.A. 12-1675 which controls the investment of public funds
by Kansas governmental units. All funds are deposited daily and all accounts are interest bearing.
RISK MANAGEMENT
It is the policy of the Authority to eliminate or transfer risk where possible. The Kansas Tort Claims Act
(K.S.A. 75-6101 et seq.) generally limits tort liability for Kansas governmental en'tities. The maximum
liability for claims as specified by the Act is $500,000 for any number of claims a.rising out of a single
occurrence or accident. For wrongful acts Kansas governmental entities or their employees are
exempted from liability.
(7)
The Authority carries $500,000 of comprehensive general liability insurance which matches the limit
established by the Kansas Tort Claims Act. The Authority also has $4,800,800 of property insurance
on airport properties.
The Authority's commercial property insurance includes $1,758,570 in loss of rents coverage. All
contractors and lessees are required to carry amounts of insurance with limits and deductibles
approved by the Authority. A schedule of insurance in force at December 31, 1993 is included in this
report.
In addition, the Authority uses various risk management techniques. All contractors and lessees are
reviewed by the Authority's legal counsel. All contractors and subcontractors are required to submit
evidence of insurance coverage naming the Salina Airport Authority and the City of Salina as named
additional insureds.
INDEPENDENT AUDIT
Pursuant to K.S.A. 27-324, an audit of the books, accounts and financial statements has been
completed by the Authority's independent certified public accountants, Harrison & Arnett, Chartered.
The independent audit is in accordance with the Kansas Minimum Standard Audit Prooram, the
Government Auditory Standards issued by the Comptroller General of the United States, and the
provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local
Governments" .
GFOA CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the Salina Airport Authority for its
component unit financial report for the fiscal year ended December 31, 1992. The Certificate of
Achievement is a prestigious national award recognizing conformance with the 11ighest standards for
preparation of state and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable
and efficiently organized component unit financial report (CUFR), whose contents conform to program
standards. Such CUFR must satisfy both generally accepted accounting principles and applicable legal
requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current report
continues to conform to the Certificate of Achievement program requirements, a.nd we are submitting
it to GFOA.
(8)
ACKNOWLEDGEMENTS
The support of the Authority's Board of Directors has been instrumental in the preparation of this report.
The Board has been actively involved in the preparation of this report and is committed to responsible
and progressive financial reporting.
Also acknowledged is the assistance of the Authority's auditor, Harrison & Arnett, Chartered, Certified
Public Accountants, Mr. Robert K. Biles, Director of Finance for the City of Salina, and Mr. Gerald Cook,
President of the Salina Area Chamber of Commerce in the preparation of this report.
Respectfully submitted,
Ti2~2~
Executive Director
Salina Airport Authority
(9)
SALINA AIRPORT AUTHORITY
PRINCIPAL OFFICERS AS OF DECEMBER 31. 1993
BOARD OF DIRECTORS
Bob E. Ott
Dorothy W. Lynch
Richard A. Renfro
Charles Stevens, Jr.
Joseph M. Ritter
Chairman
Vice-Chairwoman
Secretary
Treasurer
Asst. Secretary IT reasu rer
AUTHORITY'S COUNSEL
Larry O. Bengtson
Clark, Mize & Linville, Chartered
Salina, Kansas
AUTHORITY'S BOND COUNSEL
Gilmore & Bell
Kansas City, Missouri
AUTHORITY'S FINANCIAL ADVISOR
George K. Baum & Company
Kansas City, Missouri
AUTHORITY'S AUDITOR
Thomas G. Arnett
Harrison & Arnett, Chartered
Salina, Kansas
(10)
Timothy F. Rogers, A.A.E.
Donald C. Kneubuhl
Cathy Lentz
SALINA AIRPORT AUTHORITY
AUTHORITY STAFF MEMBERS
as of December 31. 1993
ADMINISTRATION STAFF
Executive Director
Operations Director
Secretary /Receptio n ist
OPERATIONS, MAINTENANCE, AIRCRAFT RESCUE & FIRE FIGHTING STAFF
John Banninger
Loren Carleton
Kim Colby
Gary Hansen
Dale Mattison
David Nease
Rob Pejsha
Jason Pinnick
Supervisor
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
TERMINAL BUILDING CUSTODIAL STAFF
Vachel Keaton
Francis Vestal
Custodian
Custodian
( 11 )
SALINA AIRPORT AUTHORITY
Organizational Chart
as of December 31, 1993
1
na City Commission
Sal
[
SAA BOARD OF DIRECTORS
Charles Stevens, Jr
Joseph M. Ritter
Dorothy W. Lynch
Richard A. Renfro
Bob E. Ott
BOARD ATTORNEY
L.O. Bengtson
1
SECRET ARY/RECEPTION 1ST
Cathy Lentz
EXECUTIVE DIRECTOR
Timothy F. Rogers. A.A.E
~
....
rv
-
1
("'I IQTrlnl I'd"
"-''-IV I '-"LJlf \I"
V. Keaton
T
CUSTODiAN
F. Vestal
OPERATIONS DIRECTOR
Donald C. Kneubuhl
MAINTENANCE, OPERATIONS & ARFF
SUPERVISOR
John Banninger
1
I ~Pinnick I [D. Mattison l I" L. C;leton l
1
[ R. Pejsha I CR. Col~ I I I" D. Neas.=: I
r l [
1
I
Hansen
G
[
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Salina Airport Authority,
Kansas
For its Component Unit
Financial Report
for the Fiscal Year Ended
December 31, 1992
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose component unit financial
reports (CUFRs) achieve the highest
standards in government accounting
and financial reporting.
~fi~
President
t#7-/~
Executive Director
(\:1 )
SALINA AIRPORT AUTHORITY
SALINA MUNICIPAL AIRPORT & AIRPORT INDUSTRIAL
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON. C.P.A.
THOMAS G. ARNETT. C.P.A.
719 EAST CRAWFORD . SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
INDEPENDENI' AUDI'IDR' S REroRl'
To the Board of Directors
salina Ail:port Authority
salina, Kansas
We have audited the accarpanying financial statements of the salina Airport
Authority, a carrp:>nent rmit of the City of salina, salina, Kansas, as of
December 31, 1993 ani December 31, 1992 am for the years then errled as listed
in the table of contents. '!hese financial stateItE1ts are the responsibility of
the salina Ail:port Authority, salina, Kansas, managerrent. OUr responsibility
is to express an opinion on these financial stateItE1ts based on our audit.
We corrlucted our audit in accordance with generally accepted audit~ing
starrlards, ani the Kansas Minllnum Starrlard Audit Proqram., Govennnent 1luditinq
st:.arrlards, issued by the Carlptroller General of the United states, andl the
provisions of Office of Managerrent am Budget Circular A-US, "Audits of state
ani I.cx:al Goverrments". '!hose starrlards am CMB Circular A-US require that we
plan ani perfonn the audit to obtain reasonable assurance about whethe:r the
financial stateItE1ts are free of material misstateItE1t. An audit includes
examining, on a test basis, evidence supporting the annmts am disclcsures in
the financial statements. An audit also includes assessing the accounting
principles used am significant estimates made by managerrent, as well as
evaluating the overall financial staterrent presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial staterrents :referred to above present fairly,
in all material respects, the financial {XlSition of the salina Airport
Authority, salina, Kansas, as of December 31, 1993 am December 31, 1992, am
the results of its operations am its cash flows for the years then ended in
confonnity with generally accepted accounting principles.
( 1 S)
MeMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
OUr audit was conducted for the purpose of fanning an opinion on the
financial statements taken as a whole. '!he supplemental infonnation listed in
the table of contents is presented for purpose of additional analysis and is
not a required part of the financial statements of the Salina Ail::port
Authority, Salina, Kansas. SUch infonnation has been subjected to th'e 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.
~/~
Salina, Kansas
February 28, 1994
Cert~e
of and actively engaged on this audit.
(16)
(THIS PAGE INTENTIONALLY LEFT BLANK)
SALINA AIRroRI' AUIHORITY
c:x:l1PARATIVE BAIANCE SHEETS
December 31,
1993 19S~
$ 787,118 $ 97,735
1,024 9,570
23,186 22,623
11,115 10,850
822,443 140,778
ASSETS
aJRRENT ASSETS:
Cash (Note 2)
Accounts receivable-net of allowance for
uncollectible accounts of $1,000 and $1,898
Prepaid expenses
Notes recei vable-current portion
Total CUrrent Assets
RES'IRICI'ED ASSETS: (Note 3)
Cash and cash equivalents
InvestIrv:mt securities
Accrued interest receivable
B.1il<iinJ
Assets designated for deferred
compensation benefits
Total Restricted Assets
NEI' INVES'IMENT IN FINANCING IEASES (Note 4)
NEI' INVES'IMENT IN FIXED ASSETS (Note 5)
OIHER ASSETS:
Bond issue costs, less accumulated
amortization of $15,525 and $10,100
IDng-tenn notes receivable, less
current portion of $11,115 and $10,850
Total Other Assets
'IDI'AL ASSETS
( continued)
3,364,177
100,000
45,116
3,509,293
2,570,416
12,350,201
95,684
2,839
98,523
$19,350,876
See notes to financial statements
(17)
3,227,564
1,573,872
18,359
940,631
43,009
5,803,435
2,693,072
11,613,596
8~), 015
13 , 083
98,098
$20,348,979
SALINA AIRFDRI' AUTHORITY
CLMPARATIVE &'\lANCE SHEErS
Total CUrrent Liabilities
D2cember 31,
1993 19~12
$ 10,345 $ 1~" 949
203,344
10,598 12,604
2,736 2,274
227,023 29,827
3,178,681 4,326,565
79,299 81,195
80,170 8!:i,361
350,000 26!:i,000
45,116 43,009
3,733,266 4,801,130
LIABILITIES AND EQUITY
ClJRRENI' LIABILITIES:
Accounts payable-operations
Accounts payable-capi tal
Acx;rued payroll and expenses
Deferred rent
RESTRICI'ED LIABILITIES:
Salina-KSU sales tax liability (Note 3)
~ed interest payable
Deferred interest financing leases
CUrrent maturities of long-tenn debt
Deferred corrpensation payable
Total Restricted Liabilities
LONG-TERM LIABILITIES: (Note 7)
Bonds payable, less current maturities
3,855,000
3 , 55!:i , 000
Total Liabilities
7,815,289
8,38!:i,957
~:
Contributed capital, Federal
Aviation Administration
Retained earrrings
4,394,851
7,140,736
4,720,497
7,242,525
Total Equity
11, 535,587
11,963,022
'IDI'AL LIABILITIES AND EX2UTIY
$19,350,876
$20,348,979
See notes to financial statements
(18)
SALINA AIRroRT AUIHORITY
a:MPARATIVE STATEMENTS OF OPERATIONS AND mANGES
IN RETAINED EARNINGS
OPERATING LOSS
January 1 to~~
1993 199~
$ 800,575 $ 791,974
78,392 82,345
7,616 5, , 565
43,744 16, 136
930,327 896,020
458,918 41~:;, 819
361.412 347,498
820,330 763,317
109,997 132,703
610,254 607,669
(500,257) ( 474,966)
OPERATING REVENUES:
Rental revenues
Fixed base operator
I.arx:lin:J fees
other operatin:J revenues
Total ~tin:J Revenues
OPERATING EXPENSES BEFDRE DEPRECIATION
Office arrl administration
Maintenance
Total ~tin:J Expenses Before
~reciation
OPERATING INcx::t1E BEFDRE DEPRECIATION
DEPRECIATION
NON-0PERATING INcx::t1E (EXPENSE):
Interest on invesbnents arrl
financin:J leases
Interest expense
Net Non-operatin:J Income
309,678 310,128
(267,017) (284,063)
42,661 26,065
(457,596) (448,901)
355,807 35~), 053
(101,789) (93,848)
7,242,525 6,409,154
927,219
$7,140,736 $7,242,525
NEI' LOSS
ADD DEPRECIATION ON ASSETS AWJIREl) 'IHRCVGH
FEDERAL CDNTRIlUI'IONS
DECREASE IN RETAINED EARNINGS
REI'AINED EARNINGS, January 1
Olange in acx:::ountin:J estimate (Note 13)
REI'AINED EARNINGS, December 31
See notes to financial statements
(19)
SALINA AIRFDRI' AUI'HORITY
<X:MPARATIVE STATEMENTS OF CASH F'LCMTS
(DIRECT METHOD)
CASH F'LCMTS FRC11 OPERATING ACI'IVITIES:
Cash received from sales, commissions
fees arrl rents
Cash pa.id employees for services
Cash pa.id to suppliers for goods arrl services
Proceeds from sales tax (Note 3)
Cash pa.id to KSU-Salina project contractors
Net Cash Provided (Used) In
Operati.nJ Acti vi ties
January 1 to December 31,
1993 1992
$ 940,629
(343,745)
(483,758)
493,453
(1, 756,536)
(1, 149,957)
CASH FI.J:MS FRC11 CAPITAL AND REIATED FINANCING ACITVITIES:
Purchase of property, plant arrl equipment (236,001)
Proceeds from capital grants (FAA) 30,161
Born issue costs (16,093)
Proceeds from new borrcMi.nJ 650,000
Principal pa.yments on debt (265,000)
Principal received on financi.nJ leases 154,480
Interest received on financi.nJ leases 280,898
Principal received on long-term notes 9,978
Interest pa.id (263,489)
Net Cash Provided (Used) In Capital And
Related Financi.nJ Activities
CASH FI.J:MS FRC11 INVESTING ACITVITIES:
Sale (purchase) of investments
Interest received
Net Cash Provided (Used)
In rrwesti.nJ Activities
INCREASE (DECREASE) IN CASH & CASH
&.2UIVAilID'S
CASH BMANCE-vanuary 1
CASH BMANCE-D=cernber 31
CASH AND CASH &.2UIVAilID'S
AT END OF YEAR CDNSIS'IS OF:
Unrestricted cash
Restricted cash arrl cash equivalents
( continued)
$ 906,633
(333,750)
(~~42,982)
2 , ~)57 , 906
-G105,525)
2,382,282
(1,325,100)
335,349
(20,426)
(710,000 )
244,344
335,489
158,196
~~98, 529)
344,934 (1, 280 , 677)
1,473,872 (1,373,874)
157,147 170,969
1,631,019 (1,202,905)
825,996 (101,300)
3,325,299 ~26,599
$4,151,295 $3,325,299
$ 787,118
3,364,177
$4,151,295
See notes to financial statements
(20)
$ 97,735
3,227,564
$3,325,299
RECDNCILIATION OF OPERATING I.OSS 'ill NET
CASH F'I.(MS FR.CM OPERATING ACI'IVITIES
December 31,
1993 1992
OPERATING I.OSS
$ (500,257) $ (474,966)
ADJUSIMENTS RECONCILING OPERATING I.OSS
'ill NET CASH PROVIDED BY OPERATING
ACI'IVITIES :
Depreciation
Proceeds from sales tax (KSU)
Payments to contractors (KSU projects)
B3.sis of asset sold
610,254
493,453
(1,756,536)
1,294
607,669
2,557,906
(305,525)
0fANGES IN ASSETS AND LIABILITIES:
~(increase)in
a<XX>UI1ts receivable
Increase (decrease) in
a<XX>UI1ts payable
Increase (decrease) in
acc:rued expenses
~(increase)in
prepaid expense
Increase (decrease) in
deferred rent
NET CASH PROVIDED BY OPERATING ACITVITIES
8,546 8,339
( 4 , 604) (9,557)
(2,006) 1,458
(563 ) (~i,316)
462 2,274
$(1,149,957) $2,382,282
NONCASH CAPITAL TRANSACTIONS
Drring 1993 the Authority sold land having a basis of $1,294. D..rr-ing 1992
the Authority traded a tract of land for another tract of land; no gain or loss
was re<xXJI1ized.
See notes to financial statements
(21)
SALINA AIRroRI' AUIHORITY
NOl'ES TO FINANCIAL STATEMENTS
December 31, 1993 and 1992
Nom 1:
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACXXJUNI'ING roLICIES
A. ORGANIZATION - 'Ihe Salina Airport Authority (the "Authority") is an
authority established by the City of salina, pursuant to Cl1apt:er
27, Article 3, of the Kansas statutes Annotated. 'Ihe Authority was
established for the purpose of acquiring surplus federal government
property specifically the Schilling Air Force Base located near
the City of Salina. 'Ihe Authority administers the airport,
connnercial development and rental of asscx::iated real estate.
B. REFDRl'ING ENTITY - 'Ihe Authority's Board consists of five nembers
appointed by the city canmission of the City of salina.
B:lsed. upon the degree of fiscal and oversight responsibility
exercised. by the Authority's Board, the Authority is considerEd a
component unit of the City of Salina urrler the criteria set forth
by the Goverrnre.ntal Accounting Standards Board (GASB) Staterrent
No. 14.
In reaching the alxwe conclusion, the Authority considered the
following reporting entity definition criteria:
1. Legally Separate organization - 'Ihe Authority has its Clwn
name, has the right to sue and be sued in its own name with-
out recourse to a state or local goverrnre.ntal unit and has
the right to buy, sell, lease and mortgage property in its
own name.
2. J:rrposition Of will - 'Ihe City of Salina, although appoint-
ing all Board members, may not remove appointed members at
will, may not modify or approve the budget of the Authority,
may not modify or approve rates of fees charged, may not
veto, overrule or modify the decisions of the Board arx:l the
City does not have the ability to appoint, hire, reassign
or dismiss persons responsible for the day-to-day operations
of the Authority.
3. Financial Benefit Or Burden - 'Ihe City is not legally
entitled to and cannot otherwise access the resources of
the Authority nor is the City legally obligated to assume
the obligation to finance the deficits or provide financial
support to the Authority. 'Ihe City is not obligated for the
debt of the Authority.
(22)
4. Financial Accountability - 'The Authority detemines its
budget without the city having the authority to approve or
mcxlify that budget.
K.S.A. 27-322 (a) provides that with the consent of the
city, the Authority may annually levy a tax not to exceed
three mills on each dollar of assessed tangible valuation
of the property of the City for the furtherance of the
pw::pose of the Authority. 'Ihe Authority has levied 1. 9 mills
which will provide approximately $310,000 to be used for
capital i1nprovements in 1994.
K.S.A. 27-322 (b) provides that if the Authority is
required to provide matching funds in order to qualify
for any federal or state grant relatin:J to the develop-
ment, improvement, operation of maintenance of the publ ic
airport, am such funds are not otherwise available frem
revenue of the airport facilities, the Authority may levy
a tax of not to exceed one mill for such purposes without
the consent of the governing body of the City. 'Ihe
Authority does not currently levy under this provision.
K.S.A. 27-322 (a) provides that the Authority shall have
the power to issue its own general obligation bonds with
the approval of the governin:J body of the City. once the
approval of the City Carrnnission is granted, the Authority,
by resolution, issues its general obligation bonds which
provides that the Authority will annually levy a tax
sufficient to pay the principal am interest on the bonds
as they become due. '!he statute further provides that'"
"'!he full faith am credit of the Authority
shall be pledged to the paynent of the general
obligation bonds of the Authority, including
principal am interest, am the Authority shall
annually levy a tax on all taxable tangible
property within the City, in addition to all
other levies authorized by law, in an arrount
sufficient to pay the interest on and the
principal of the bonds as the same become due."
'!he Authority does not currently levy under this provision.
C. Bi\SIS OF ACCUJNI'ING - '!he Authority consists of an enterprise furrl.
Enterprise funds are classified as proprietary funds by the G.Z~B
am are accounted for using a total economic resource measurement
focus. 'Ihe enterprise furrl is used to account for operations that
are financed am operated in a manner similar to private business
enterprises. 'Ihe intent of the Board is that the costs of pro-
viding services on a continuing basis be recovered through user
fees am rents. '!he financial statements are prepared on the
accrual basis of accounting. Under the accrual basis, revenUE:!S are
recognized as earned am expenses as incurred.
(23)
D.
CASH AND CASH Ð,2UIVAIENTS - For the purpose of the carnparati ve
statement of cash flCMS, the Authority considers all highly
liquid invesbnents (including restricted assets) with maturities
of three months or less when purchased to be cash equivalents.
At December 31, 1993 and 1992, cash equivalents, which are stated
at cost, include daily repurchase agreements.
E.
INVES'lMENI'S - Ilwesbnents relating to the deferred compensation plan
are reported at market value. All other investments are reported at
cost. '!he Authority's other invesbnents consist of Certificat:es of
Deposit and Treasu:ry Bills.
F.
PROPERlY AND Ð;¿UIH1ENT - On September 9, 1966, the United stat:es of
America pursuant to section 13 (g) of the SUrplus Property Act of
1944, transferred certain portions of the SChilling Air Force Base
to the Authority.
Property and equipment asSLllTled by the Authority on September 9,
1966 is carried at fair market value at that date of $529,872
less accumulated depreciation of $44,180. SUbsequent additions
to property and equipment are recorded at cost.
Maintenance and repairs are expensed as incurred. When propeJ:ties
are disposed of, the related cost and accumulated depreciation are
removed from the respective accounts and any gain or loss on èlis-
position is credited or charged to operations. Runways, taxiways,
parking areas, sewers and other sÍ11Ú.lar items are written off when
fully depreciated unless clearly identified as still being in use.
Assets are depreciated using the straight-line Iæthod over thE~
estimated useful lives of the assets as follows:
Buildi.rqs and Improvements
Infrastructure Items
Equipment
Years
5-50
10-40
5-25
Depreciation applicable to certain property and equipment which
have been funded by or contributed to the Authority by the fedleral
government is charged against the respective capital grant equity
balance. '!his charge is effected by transferring the applicable
depreciation from retained earnings and has no effect on income.
In accordance with Financial Accounting Standard Board Statement
No. 62, interest during construction periods, when significant., is
capitalized and included in the cost of property and net invesbnent
in financing leases. In 1993 no interest was capitalized.
In 1992 $17,334 of interest was capitalized. (Note 5)
(24)
G.
BJNΠISSUE CDSTS - Bond issue costs are deferred an::i amortizej
using the straight-line methcxi over the life of the tx::>nds to which
it relates.
H.
CU1PENSATED ABSENCES - SUbstantially all full-time employees
receive compensation for vacations, holidays, illness an::i certain
other qualifying absences. '!he number of days compensated for
various categories of absence is generally based on length of
service. Liabilities relating to these absences are recognized
as incurred an::i included in aCCTIled expenses. '!he amount of
aCCTIled vacation pay at December 31, 1993 an::i 1992 was $4,322
an::i $7,418 respectively. (Note 13)
1.
CAPITAL GRAm' FUNΠ- Certain expenditures for capital improve-
ments receive significant federal funding through the Airport
IIrprovement Program (AIP) of the Federal Aviation Administration
(FAA). '!he Authority funds the remaining balance of such expendi-
tures. Capital funding provided under govermnent grants is con-
sidered earned as the related approved capital improvement expen-
di tures are disbursed .
J.
INVENIDRY - '!he Authority maintains no significant ilwentory of
office an::i maintenance supplies. '!hese items are expensed as pur-
chased an::i no ilwentory is recorded in these financial stateme~ts.
K.
ALl.CMANCE FOR UNCDLIECITBIE AcaxJNl'S - '!he Authority calculatE!S its
allowance for specific aCCOW1ts using specific aCCOill1t analysis.
L.
lEASES - '!he Authority is a lessor under mnærous lease agreeIuents.
'!he leases are classified as operating leases, except for certain
special facility leases which are accounted for as direct financing
leases.
M.
TAXES - '!he Authority is exempt from payment of federal and s1:ate
income, property an::i certain other taxes. '!he Authority is subj ect
to property tax on non aÍJ:pJrt use property acquired after 1990.
N.
RECIASSIFICATIONS - Certain amounts in the 1992 financial sta1:e-
ments have been reclassified to conform to 1993 presentations..
o.
BIJLGEI'S - '!he Authority is specifically exempt from Kansas Budget
Law. The Authority is not required to demonstrate statutory com-
pliance with its annual operating budget. Accordingly, budgetary
data is not included in the financial statements.
(25)
NmE 2: CASH, CASH ~ AND INVES'IMENT SEaJRITIES
Cash, cash equivalents and invesbnent securities included in the com-
parative balance sheets consist of the following:
December 3 1 ,
1993 19~~
Cash and cash equivalents
CUrrent
Restricted
Total Cash and Cash Equivalents
$ 787,118 $ 97,735
3.364.177 3.227.564
4.151.295 3.325.299
100,000 1,573,872
45.116 43.009
Invesbnent securities-restricted
Deferred compensation plan assets
Total Cash, Cash Equivalents and
Invesbnent Securities
$4,296,411
$4,942,180
Kansas statutes authorize the Authority to irwest in United states
Obligations, secured repurd1ase agreerænts, certificates of deposit,
time deposits and open accounts.
'!he carrying amount of deposits and irwesbnents securities by type of
irwesbnent are as follows:
Carryim valUE~
December 3 1 .
1993 19S~
Cash deposits
Certificates of deposit
Total Deposits
$4,006,295 $2,108,259
100.000 206.500
4.106.295 2.314.759
2,359,412
145,000 225,000
45.116 43.009
190.116 2.627.421
$4,296,411 $4,942,180
u. S. Gove.rnment obligations
Repurchase a greerænts
Deferred compensation plan assets
Total Invesbnent Securities
Total Deposits and Investment Securities
(26)
Deposits of the Authority with financial institutions are catagorized
by credit risk as follows:
December 3 1
1993
1992
eany ing
Value
Bank
Ea.l ance
eany ing
Value
Bank
Ea.lance
Cash on deposit
Insured by federal
deposit insurance
corporation $ 300,000 $ 300,000 $ 300,000 $ 300,000
Collateralized with
securities held
by pledging
financial institution
in Authority's name 3,806,245 3,809,887 2,014,709 1.800,073
4,106,245 4,109,887 2,314,709 2,100,073
Cash on harrl
(petty cash) 50 50
$4,106,295 $4,109,887 $2,314,759 $2,100,073
'!he Authority's deposits are entirely covered by federal depository
insurance or by collateral held by pledging financial institutions in
the Authority's name.
'!he Authority's invesbnents are categorized to give an irrlication of the
level of risk assumed by the entity. Category 1 includes invesbnents
that are insured or registered, or securities held by the Authority or
its agent in the Authority's name. Category 2 includes uninsured and
unregistered invesbnents for which the securities are held by the counter-
party's trust departrænt or agent in the Authority's name. Category 3
includes uninsured and unregistered invesbnents for which the securities
are held by the counte:rparty or by its trust departrænt or agent but not
in the Authority's name .
December 31, 1993
Cateqorv Carrying
2 3 Value
Market
Value
1
Repurchase agreements
secured by U. S .
Treasury or Federal
Agency Securities
$
$
$
$
$145,000 $145,000 $145,000
$145,000
45,116 45,116
$190,116 $190,116
Deferred compensation
plan investments
(27)
1
Cecember 3 1 , 1992
Cateqory Carry ing Market
2 3 Value Value
$2,359,412 $2,359,412 $2,377,771
u. s. Treasury Obligations
Repurchase agreements,
secured by U. S .
Treasury or Federal
Agercy Securities
$
225,000 225,000 225,000
$ $2,584,412 2,584,412 2,602,771
43,009 43,009
$2,627,421 $2,645,780
Deferred compensation
plan investments
Investment yields ran<Je from 2.5% to 3.0% at Cecember 31, 1993 and. mature
on various dates through June 30, 1994. Investment transactions made
during the years ended December 31, 1993 and 1992 were limited to the
classifications above.
NOI'E 3: RESTRI CI'ED ASSETS
Restricted assets consists of the following at December 31, 1993 and 1992:
1993
Cash and
Cash Total Total
Equivalents Investments 1993 1992
RESTRI CI'ED BY OOND
AGREEMENT :
130m reserves:
Revenue lxmds-84 $ 50,000 $ 50,000 $ 100,000 $ 110,547
Revenue borrls-85 40,000 50,000 90,000 124,610
GOB-90A 83,200
Building 940,631
GOB-90B 45,228
leasehold borrls-91 95,496 95,496 56,000
INTERLOCAL AGREEMENT
KSU / SALINA SAlES
TAX 3,178,681 3,178,681 4,326,567
OOARD DESIGNATED
OOND RESERVES 73,643
DEFERRED CU1PEN-
SATION PIAN 45,116 43,009
$3,364,177 $145,116 $3,464,177 $5,803,435
All restricted amounts are held by the Authority except for assets in the
deferred compensation plan which are held by the trustee of the plan.
(28)
Revenue Bonds-1984 am 1985:
The proceeds of the 1984 am 1985 revenue bonds were used to construct
buildings that were leased to a manufacturing tenant of the Authority.
The leases are financing leases that transfer CMnerShip of the buildings
at the end of the lease. 'Ihe bond agreements established certain reserve
requirements which the Authority has met.
General Obligation Bonds-1990A am 1990B:
'Ihe proceeds of the 1990A am 1990B General Obligation Bonds were used to
purchase a building that was leased to a manufacturing tenant, construct a
building that was leased to a manufacturing tenant and to construct a
building that was leased to a state university. 'Ihe leases are financing
leases that transfer o.mership of the buildings at the end of the lease.
'Ihe bond agreements established certain reserve requirements which the
Authority has met.
'Ihe lease on the manufacturing building constructed has been terminated am
the lessee has reimbursed part of the construction costs. 'Ihe building was
leased on a short term basis in 1993 am the building has been transferred
from restricted assets to fixed assets.
Leasehold Revenue Bonds-1991
'Ihe proceeds of the 1991 leasehold revenue bonds were used to construct a
building that was leased to a state university. 'Ihe lease is a financing
lease that transfers o.mership at the end of the lease. 'Ihe bond agreement
established certain reserve requirements which the Authority has met.
Inter local Sales Tax Agreement:
'Ihe Authority has entered into an Interlocal COoperation Agreement: with
the Kansas Board of Regents, a state agency of Kansas; Kansas stat:e
University, a state university; am the city of Salina.. Under this
agreement, the Authority receives from the city the proceeds from a 1/2
cent retailers sales tax, holds am invests these receipts am in
acx:ordance with agreed procedures disburses these proceeds for llllprove-
ments to the KSU-Salina cærpus.
(29)
The follOVling schedule S1.ll1lI!\ëITizes the activity under this agreement.
Year Ended December 31
1993 1992 1991 Total
Account beginning balance $4,326,565 $1,937,958 $ ~,
Receipts
Retail sales tax 493,453 2,557,902 1,988,596 5,039,951
Interest 115,199 136 , 229 13 ,969 265,397
Total Receipts 608,652 2 ,694,131 2,002,565 5,305,348
Disbursements
Residence hall 802,350 802,350
South boundary road
North boundary road 3,619 237,384 4,760 245,763
Main entrance 1,019 10,486 59,847 71,352
Infrastructure equipment 70,000 70,000
College center 233,497 46 233,543
Technical center 646,051 57,608 703,659
Total Disbursements L 756,536 305,524 64,607 2,126,667
Account B:ù.ance $3,178,681 $4,326,565 $1,937,958 $3,178,681
'!he North Boundary Road and South Boundary Road iIrproverne.nts and any
dedicated utility iIrproverne.nts constructed with sales tax proceeds be-
come the property of the City. All other capital iIrproverne.nts or
capital equipment paid for with sales tax proceeds become the property
of the state of Kansas.
(30)
NarE 4: NEI' INVES'IMENT IN FINANCING IEASES
Net investment in financing leases consist of the following:
~31
1993 1997:
Mini.mt.nn lease payments to be
received, net of born issue costs
Less : Unearned income
$4,967,522
2.397.106
Net investment in financing leases
$2,570,416
See Note 3 for projects financed through these leases.
Activity in net investment in financing leases was as follows:
$5,306,576
2.613.504
$2,693,072
Year Ended
~31,
1993 1992
Beg inning balance
COllected principal
Building additions
$2,693,072
(154,480)
31. 824
Ending balance
$2,570,416
$2,084,516
(244,344)
852.900
$2,693,072
NarE 5: NEI' INVES'IMENT IN FIXED ASSEl'S AND CDNSTRUCrION IN PR.O3RE$S
Net investment in fixed assets consists of the following:
December 3 1 ,
1993 1992
FIXED ASSEl'S:
Larrl
Buildings and improvements
Airfield and infrastructure
Equipment
$ 2,086,948
7,111,803
7,826,554
978.826
I.ess-aCCl..llTIlÙated depreciation
18,004,131
(5.653.930)
Net Fixed Assets
$12,350,201
$ 1,837,962
6,068,394
7,792,862
958.518
16,657,736
(5.044.140)
$11,613,596
Total interest capitalized in 1993 and 1992 was zero and $17,334
respectively.
(31)
Activity in the fixed asset accounts for 1993 was as follCMS:
&lilding and Airfield and
land Improvements Infrastructure EQuipment
Beginning balance $1,837,963 $6,068,394 $7,792,862 $958,518
Additions 250,279 102,778 33,692 20,773
Disposals (1,294) (465)
Transfer from
restricted assets 940,631
Ending balance $2,086,948 $7,111,803 $7,826,554 $978,826
NOI'E 6: RENTAL INm-1E UNDER OPERATING IEASES
A significant portion of the operating revenue of the Authority is
generated through the leasing of airport and building space to airport
fixed base operators and others on a fixed fee as well as a contingent
rental basis. <Mnership risks are retained by the Authority and,
accordingly such leases are treated as operating leases.
'!he follCMing is a schedule of minimum future rentals on noncarK::ellable
operating leases to be received in each of the next five years and
thereafter :
Years ended
December 3 1 ,
1994
1995
1996
1997
1998
later years
$
527,058
433,822
389,177
133,506
56,866
125,176
Total
$1,665,605
(32)
D3cember 31,
1993 1992
NOI'E 7: IDNG TERM DEBI'
Building revenue bonds series 1984, originally
issued May 1, 1984, due in annual installments
increasing fram $50,000 in 1992 and 1993 to $60,000
in 1994, plus interest at 80% of the base lerrling
rate of '!he National B:mk of America, Salina, Kansas.
$
60,000
$
110,000
Building revenue bonds series 1985, originally
issued December 1, 1985, due in annual installments
increasing fram $110,000 for 1992 and 1993 to
$130,000 in 1995, plus interest at 80% of the base
lerrling rate of 'The National B:mk of America, Salina,
Kansas .
240,000
350,000
General obligation economic development bonds
series 1990A, originally issued July 1, 1990 due
in annual installments increasing fram $45,000 in
1992 to $175,000 in 2010 plus interest ranging fram
6.4% to 8.375%
1,760,000
1,810,000
General obligation economic development bonds
series 1990B, originally issued october 1, 1990
due in annual installments increasing fram $20,000
in 1992 to $70,000 in 2010 plus interest ranging
fram 6.5% to 8.5%
715,000
735,000
leasehold revenue bonds series 1991, originally
issued November 1, 1991, due in annual installments
increasing fram $35,000 in 1992 to $90,000 in 2006
plus interest ranging fram 5% to 7.25%
780,000
815,000
General obligation bonds series 1993A, originally
issued December 1, 1993, due in annual installments
increasing fram $35,000 in 1994 to $45,000 in 2003
plus interest at 3.4% to 5%
375,000
General obligation bonds series 1993B, originally
issued December 1, 1993 due in annual installments
increasing fram $25,000 in 1994 to $35,000 in 2003
plus interest at 3.85% to 4.75%
275,00(1
Total
Less current maturities
4,205,000
350,00(1
3,820,000
265,000
long-term debt, less current maturities
$3,855,000
$3,555,000
'!he p~ of all of bonds issued 1984 through 1991 were used to
purchase or construct COI1UTIerCial real property transferred under direct
financing leases. (See Note 4). '!he bonds are expected to be repa.id from
p~ of the financing leases. One financing lease in the original
principa.l amount of $1,077,422 is in default. Bonds relating to -t:he
defaulted lease are expected to be repa.id fram the p~ fram sale
of the building or fram building rents.
(33)
'The proceeds of the series 1993A bonds are to be used to finance improve-
ments to the Airport and the proceeds of the series 1993B bonds are to be
used to finance :ma.tching funds for a Federal Aviation Administration grant.
'The 1993A and 1993B series bonds are to be repaid from the general revenue
of the Authority.
'The annual bond principal for all bonds outstanding as of December 31, 1993,
are as follows:
Payable in General Leasehold
Year Errled Obligation Revenue Revenue Interest
December 3 1 Bonds Bonds Bonds Payments Total
1994 $ 140,000 $170,000 $ 40,000 $ 267,523* $ 617 , 523
1995 135,000 130,000 40,000 250,728* 555, 728
1996 145,000 45,000 229,729 419,729
1997 155,000 50,000 216,772 421,772
1998 165,000 50,000 205,178 420,178
'!hereafter 2,385,000 555,000 1,272,070 4,212,070
Total $3,125,000 $300,000 $780,000 $2,442,000 $6,647,000
*Interest on revenue bonds estimated at 7%
'!he annual bond interest for all bonds outstanding as of December 31, 1993,
are as follows:
Payable in General
Year Errled Obligation
December 31 Bonds
1994 $ 194,545
1995 191,851
1996 182,251
1997 171,995
1998 163,475
'!hereafter 1, 081, 543
Total $1,985,660
$ 30,100
Leasehold Total
Revenue Interest
Bonds Payments
$ 51,978 $ 267,523
49,777 250,728
47,478 229,729
44,777 216,772
41,703 205,178
190,527 1, 272 , 070
$426,240 $2,442,000
Revenue
Bonds
$ 21,000
9,100
(34)
Activity in long term debts for 1993 was as follows:
Beg inning Bonds Principal Ending
Balance Issued Paid Balance
Building Revenue Bonds
Series 1984 $ 110,000 $ $ 50,000 $ 60,000
Building Revenue Bonds
Series 1985 350,000 110,000 240,000
General obligation Economic
Development Bonds
Series 1990A 1,810,000 50,000 1..760,000
General Obligation Economic
Development Bonds
Series 1990B 735,000 20,000 715,000
Leasehold Revenue Bonds
Series 1991 815,000 35,000 780,000
General Obligation Bonds
Series 1993A 375,000 375,000
General Obligation Bonds
Series 1993B 275,000 275,000
Totals $3,820,000 $650,000 $265,000 $4,205,000
(35)
NOTE 8: DEFINED BENEFIT PENSION PIAN
SUbstantially all employees of the Salina Airport Authority participate
in the Kansas Public Employees Retirement System ("System"), a multiple
enployer public enployee cost sharing retirement system. The payroll for
enployees covered by the System for the years ended December 31, 1993 and
1992 was $317,870 and $321,923. The total payroll was $344,195 arrl $334,685
respectively.
SUbstantially all enployees of the Salina Airport Authority are eligible
to participate in the System after one year of enployment. Employees who
retire at or after age 65 or age 62 with ten years service credit or at any
age when years of service plus age equal 85 "points" are entitled to a
retirement benefit, payable IOC>nthly for life, equal to one percen1: of their
final average salary for each year of "prior" service and 1.75 percent for
each year of "participating" service. Final average salary is thE~ enployee' s
average salary over the higher of four years of credited service, including
add-ons such as accnIed sick leave and vacation leave or a three year average
without add-ons. For those hired July 1, 1993 or later, final avE~ge salary
is a three year average with no add-ons. Benefits fully vest on reaching ten
years of service. Vested enployees may retire at age 55 and receive reduced
retirement benefits. '!he System also provides death and disabili1:y benefits.
Benefits are established by state statute.
~ enployees are required by state statute to contribute four percent
of their salary to the plan. '!he enployer is required by the saInE~
sta~ to contribute the renaining am::>UI1ts necessary to pay benefits
when due. '!he contribution requirement for the years ended December 31,
1993 and 1992 was $20,704 and $20,848, which consisted of $5,926 ¡ìnd
$6,041 from the enployer and $14,778 and $14,807 from enployees, Jrespectively;
these contributions represented 1. 9 percent and four percent of covered
payroll respectively.
'!he "pension benefit obligation" is a standardized disclosure measure
of the present value of pension benefits, adjusted for the effects of
projected salary increases and step-rate benefits, estiIDated to b~
payable in the future as a result of enployee service to date. 'Ihe
measure, which is the actuarial present value of credited projecb:rl
benefits, is interrled to help users assess the System's fundi.n:;J s-tatus
on a going concern basis, assess progress made in aCCLm1lllating
sufficient assets to pay benefits when due, and make c:x::m¡parisons .3IOC>ng
Public Employee Retirement Systems and errployers. '!he System does not
make separate measurements of assets and pension benefit obligation for
individual errployers. '!he pension benefit obligation at June 30,
1993 for the System as a whole, detennined through an actuarial
valuation performed as of that date, was $5.28 billion. '!he System's
net assets available for benefits on that date (valued at market) were
estiIDated to be $4.96 billion, leaving an unfunded pension benefit obligation
estiIDated at $320 million. '!he contribution of the Salina Airport Authority
for the period covered by this report represents. 01 percent of total
contributions required of all participating entities.
'!he ten-year historical trend infonna.tion shCMing the System's prOJress
in accumulating sufficient assets to pay benefits when due is presented
in the System's June 30, 1993 Comprehensive Annual Financial Report.
(36)
NarE 9: DEFERRED CU1PENSATION PIAN
'Ihe Authority offers its employees a deferred compensation plan fonned
in accordance with Internal Revenue Code Section 457. 'Ihe plan,
available to all employees, permits them to defer a portion of their
salary lli1til future years. 'Ihe deferred compensation assets, which are
furrled currently with a third party tn1stee, are not available to
employees lli1til termination, retirement, death or lli1foreseeable
emergency.
All amoli1ts of compensation deferred under the plan, all property and
rights purchased with those amoli1ts, and all income attributable to
those amounts, property, or rights are (lli1til paid or made available to
the employee or other beneficiary) solely the property and rights of
the Authority, subject only to the claims of the Authority's general
creditors. Participants' rights under the plan are equal to those of
general creditors of the Authority in an amoli1t equal to the fair
market value of the deferred aCCOlli1t for each participant.
It is the opinion of the Authority's legal counsel that the Authority
has no liability for losses under the plan but does have the duty of
care that would be required of an ordinary prudent investor. 'Ihe
Authority believes that it is unlikely that it will use the asseb::: to
satisfy the claims of general creditors in the future.
Authority payroll and contributions of employees electing to partici-
pate follows:
~31,
1993 1992
Authority's total payroll
Electing employees payroll
Electing employees contributions
$344,195
170,107
2,950
$334,685
93,088
1,890
'Ihe Authority offers no post employment benefits other than those
available through Kansas Public Employment Retirement.
NOI'E 10: REI'AINED EARNINGS AND CDNTRIIUI'IONS IN AID
Under the provisions of various bond agreements, certain assets are
restricted for specific uses (Note 3). RetainErl earnings which have
been reserved relating to these restricted assets consist of the
following:
Decernber 31,
1993 1992
Reserved retainErl earnings:
Bond reserves:
Revenue bonds-84
Revenue bonds-85
leasehold bonds-91
Total retainErl earnings
$ 100,000 $ 100,000
90,000 100,000
95,496 6,500
285,496 206,500
6,473,970 6,905,034
$6,759,466 $7,111,534
Reserved retained earnings
Unreserved retained earnings
Board designated restricted assets are not reported. as reserved retained
e.arn.l11g s .
(37)
Changes in grants and contributions are summarized as follows:
Federal AviatiŒ~
Administration
Balance January I, 1992
$4,740,201
1992 additions, AlP grants
335,349
Depreciation on property and equipment
acquired by govermnent grants
(355,053)
Balance December 3 I, 19 9 2
4,720,497
1993 additions, AlP grants
30,161
Depreciation on property and equipment
acquired by govermnent grants
(355,807)
Balance December 3 I, 19 9 3
$4,394,851
NOIE 11: MAJOR a.JSIa1ERS
'!he Authority receives significant operating and capital lease revenue
from Schwan' s Sales and Beech Aircraft Corporation. Rentals from these
two manufacturers aggregated approxilnately 38% of operating and capital
lease revenue for the year errled December 31, 1993.
NOIE 12: NON-oPERATING INCXf.1E
Net non-operating incorre consisted of the following for the years
errled December 31, 1993 and 1992:
Total
1993 1992
$ 286,089 $ 257,028
23,589 __2J , 100
309,678 -ÆI, 128
81,411 50,000
180,181 227,909
5,425 ~;,154
267 , 017 ~l,063
$ 42,661 $ 20,065
--
--
Interest and investment incorre
F inane ing 1 eases
Other interest
Total
Interest expense
Revenue borris
General obligation borris
Amortization bond issue costs
Net non-operating J.11COI!le
(38)
NOI'E 13: a-IANGE IN AcaJUNI'ING ESTIMATE
The Authority has determined that useful lives originally assigned to many
fixed assets were t(X) short and has recalculated depreciation expense based
on more reasonable lives. These new lives result in depreciation expense
more accurately reflecting wearing out of assets. The following adjusbnent
reflects the cumulative effect on accumulated depreciation and depreciation
charged to contributions from FAA of the change in useful life.
Accumulated
~reciation
January 1, 1992
as previously
reported
corrected
adiustment
Equipment
Buildings
Airfield and
Infrastructure
$ 738,404
2,407,470
$ 438,879
1,662,426
$
299,525
745,044
2,589,784
2,335,298
254,486
$5,735,658
$4,436,603
$1,299,055
~reciation charged
to FAA (2,712,380)
(2,340,544)
(371.836)
CLnnulative effect of
change
$
927,219
'!he Authority has made the following adjusbnents regarding classification
of fixed assets.
December 3 1 , 19 9 2, corrected
Buildinq Land
$6,576,844 $1,148,648
167,608 13 , 256
6,744,452 1,161,904
(676,058) 676,058
$6,068,394 $1,837,962
January 1, 1992
Additions 1992
December 31, 1992 as
previously reported
Reclassify from building to land
The reclassification from building to land relates to costs incun:-erl in
creating an industrial sub:livision. '!he Authority expects to recover these
costs through sale of lots.
The financial statements for the year ended December 31, 1992 have been
restated giving effect to the change in depreciable lives as follows:
1.
Depreciation expense has been decreased by $120,630, decreasing operating
loss and net lass $120,630.
2.
Depreciation on assets acquired through federal contributions has been
decreased $44,936 decreasing the amount of depreciation chargE~ to Federal
Aviation Administration contributed capital.
(39)
SALINA AIRFDRI' AUIHORITY
SŒ.EIXJIES OF OPERATIONS AND CHANGES
IN RETAINED EARNINGS
January 1 to December 2h
1993 199~
OPERATING REVENUES
Building rents $ 678,806 $ 665,579
Ramp rents 9,608 11,802
land rents 31,832 28,523
Agri land rents 43,994 50,359
Hangar rents 36,017 35,351
Tank farm rent 318 360
Fixed base operator 78,392 82,345
landing fees 7,616 5,565
Cornmissions-car rentals 7,383 7,487
Cornmissions-other 2,247 1,314
Other income 34,114 7,335
'lUI'AL OPERATING REVENUES 930,327 896,020
OPERATING EXPENSES BEFDRE DEPRECIATION
AEMINISTRATIVE EXPENSES
Office salaries 146,855 144,690
Office supplies 5,481 7,174
Postage 3,293 3,865
Travel and Iæetings 8,775 8,522
Legal and accounting 39,161 30,160
Insurance-property /1 iab il i ty 63,072 49,599
Insurance- Iœdi cal 50,666 67,684
Engineering 19,512 18,334
PICA tax 25,290 24,437
Kansas U11elllployment tax 232 378
Employees retirement 5,926 6,041
Telephone 8,029 6,687
Industrial development 21,250 21,250
Airport promotion 5,181 7,642
Property taxes 37,894 291
DJes and subscriptions 8,247 7,092
Property appraisals 1,200 1,200
Other administrative expenses 8,854 10,773
'lUI'AL MMINISTRATIVE EXPENSES $ 458,918 $ 415,819
(40)
MAINI'ENANCE EXPENSES
Maintenance salaries
Building maintenance
Airfield maintenance
Grounds maintenance
Equiprænt gas, oil & repairs
Utilities
Fire department expense
Agr i 1 arrl expense
other maintenance expenses
'IUI'AL MAINI'ENANCE EXPENSES
'IUI'AL OPERATING EXPENSES BEFDRE
DEPRECIATION
OPERATING EARNINGS BEFDRE DEPRECIATION
DEPRECIATION EXPENSE
OPERATING IDSS
NON-DPERATING INa:ME (EXPENSE)
Interest incoIæ-capital leases
Interest i.ncc:Jræ
Bond interest-expense
Bond issue costs
Amortization bond cx>sts
Interest on temporary notes
NET' NQN-DPERATING INCXl1E (EXPENSE)
NET' IDSS
ADD DEPRECIATION ON ASSEI'S ACJ;2UIRED 'IHROUGH
FEDERAL CDNl'RIEUl'IONS (Note 1)
INŒEASE (DEŒEASE) IN REI'AINED EARNINGS
REI'AINED EARNINGS, January 1
Q1ange in accoW1ting estimate
REI'AINED EARNINGS, December 31
( 41)
January 1 to December 31,
1993 1992
$ 194,884
24,796
35,305
2,863
22,981
67,025
1,654
401
11 , 503
361,412
820,330
109,997
610,254
(500,257)
286,089
23,589
(261,342)
(250)
(5,425)
42,661
(457,596)
355,807
(101,789)
7,242,525
$7,140,736
$ 190,518
31,795
26,543
10,355
17,626
50,809
2,481
4,562
12:,809
347,498
763,317
132, 703
607,669
( 474,966)
257,028
53,100
(277,753)
(650)
(~) , 504 )
(156)
26,065
(448,901)
35~), 053
( 93,848)
6.409,154
927,219
$ 7,242,525
SALINA AIRPORT AUTHORITY
CAPITAL EXPENDI'IURES
January 1 to ~ber 31,
1993 1992
LAND
Irrprovements $ 250,279 $ 118,589
Engineering costs 13 ,256
'IDI'AL lAND 250,279 131.845
EQITFMENI'
Communication equipment 12,017
Airfield equipment 5,668 200
Office equipment 3,088 2,316
'IUl'AL EXPIFMENI' 20,773 2,516
IÐIIDINGS AND IMPROVEMENI'S
2818 Scanlan 2,500
KASA 3,389
Paving 5,546
Kansas Army National Guard Armory 451
Roofing 20,577
Beech parJeirg lot 28,675
ArM par Jeirg 1 at 1,000
53,000 sq. ft. Mfg. Bldg. 38,286
Salina development center in1provements 18,893
Tenninal b 1 dg . in1provement 4,302
Highway Patrol Building 9,480
Salina Vortex 18,698
'IDI'AL IÐIIDlliGS 102,778 49,019
CAPITAL IFASE ADDITIONS 31. 824 754,399
AIRFIElD AND INFRASTRUCIURE
AIP 11 Engineeri.n;J 9,256
AIP 12 Runway protection zone 178 20,452
AIP 13 SUbdrain and vehicle 322,317
AIP 14 Airfield signa.ge 33,514 5,561
'IDI'AL OIHER IMPROVEMENI'S 33,692 357,586
'IDI'AL CAPITAL EXPENDI'IURES $ 439,346 $1,295,365
(42)
SALINA AIRFDRI' AUIHORITY
IDNΠOF INDEBJ:'ErNFSS
From Issue to December 31, 1993
Original Principal outstanding
Issue Paid Balance
Building Revenue Bonds
Series 1984 $ 400,000 $ 340,000 $ 60,000
Building Revenue Bonds
Series 1985 900,000 660,000 240,000
General Obligation Economic
Development Bonds
Series 1990A 1,900,000 140,000 1,760,000
General Obligation Economic
Development Bonds
Series 1990B 773,000 58,000 715,,000
Leasehold Revenue Bonds
Series 1991 850,000 70,000 780,000
General Obligation Bonds
Series 1993A 375,000 37~" 000
General Obligation Bonds
Series 1993B 275,000 275,000
$5,473,000 $1,268,000 $4 , 20~¡, 000
(43 )
SALINA AIRroRI' AUlliORITY
BUILDING REVENUE IDNŒ-SERIES 1984
December 31, 1993
rate of Issue:
Amount of Issue:
Interest Rate:
Maturity rate:
Principal Paid:
Outstanding Balance :
May 1, 1984
$400,000
*
May 1, 1994
$340,000
$ 60,000
Schedule of Bond Principal Payments
DIe in
Year
Bond
Principal
1994
$ 60,000
$ 60,000
*'!he interest rate for each six Ironth payment
will be eighty percent (80%) of the National
Bank 0 f AIDer i ca , Sal ina , Kansas base 1 ending
rate in effect on the beginning date of each
six Ironth period.
(44)
SALINA AIRroRI' AUIHORITY
PUILDING REVENUE IDNŒ-SERIES 1985
December 31, 1993
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
outstanding Ba.lance:
January 17, 1986
$900,000
*
December I, 1995
$660,000
$240,000
SChedule of Bond Principal Payments
DJe in
Year
Bond
Principal
1994
1995
$110,000
130,000
$240,000
*'!he interest rate for each six month payment
will be eighty percent (80%) of the National
Bank a f America, Sal ina , Kansas base 1 ending
rate in effect on the beginning date of each
six month pericxi.
( 45)
SALINA AIRroRI' AUIHORITY
GENERAL OBLIGATION EXX>NCMIC DEVElDFMENT IDNŒ
SERIES 1990A
December 31, 1993
Da.te of Issue:
Amount of Issue:
Interest Rate
Maturity Da.te:
Principal Paid:
outstanding Balance :
July 1, 1990
$1,900,000
*
September 1, 2010
$140,000
$1,760,000
Schedule of Bond Principal Pavments
D.1e in
Year
Bond
Principal
1994
1995
1996
1997
1998
'!hereafter
$
55,000
60,000
65,000
65,000
75,000
1.440,000
$1,760,000
*'!he interest rate varies from 8.375% to 6.4%
aver the life of the bond issue.
( 46)
SALINA AIRroRI' AUIHORITY
GENERAL OBLIGATION EmNCMIC DEVEIDfMENT BJNŒ
SERIES 1990B
~ 31, 1993
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
outstanding Balance:
october 1, 1990
$773,000
*
September 1,2010
$58,000
$715,000
Schedule of Bond Principal Payments
Thle in
Year
Bond
Principal
1994
1995
1996
1997
1998
'!hereafter
$ 25,000
25,000
25,000
30,000
30,000
580.000
$715,000
*'!he interest rate varies from 8. 5% to 6. 5%
over the life of the rond issue.
(47)
SALINA AIRFORI' AUIHORITY
IEASEHOID REVENUE roNŒ
SERIES 1991
December 31, 1993
[Ete of Issue:
Amount of Issue:
Interest Rate:
Maturity [Ete:
Principal Paid:
outstanding B:ilance :
November 1, 1991
$850,000
*
September 1, 2 0 0 6
$70,000
$780,000
Schedule of Bond Principal Payments
Dle in
Year
Bond
Principal
1994
1995
1996
1997
1998
'!hereafter
$ 40,000
40,000
45,000
50,000
50,000
555.000
$780,000
'!he interest rate varies from 7.25% to 5%
over the life of the bond issue.
(48)
SALINA AIRFORI' AUTHORITY
GENERAL 0 BLI GATT ON OONŒ
SERIES 1993A
December 31, 1993
Date of Issue:
Aroc>tll1t of Issue:
Interest Rate:
Maturity Date:
Principal paid:
outstanding Balance:
December 1, 1993
$375,000
3.4% to 5%
September 1 , 2 0 0 3
$375,000
Schedule of Bond Principal Payments
Ine in
Year
Bond
Principal
1994
1995
1996
1997
1998
'!hereafter
$ 35,000
30,000
30,000
35,000
35,000
210,000
$375,000
(49)
SALINA AIRFüRI' AUIHORITY
GENERAL 0 ELI GATT ON ff>NŒ
SERIES 1993B
December 31, 1993
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
Out.starrling Balance :
December 1, 19 9 3
$275,000
3.85% to 4.75%
September 1, 2 0 0 3
$275,000
Schedule of Bond Principal Payments
rue in
Year
Bond
Principal
1994
1995
1996
1997
1998
'!hereafter
$ 25,000
20,000
25,000
25,000
25,000
155.000
$275,000
(50)
Workmen's compensation
and Employer's Liability
Cornprehensi ve General
Liability
Rental Buildings-
Industrial
Airport Terminal and
Rental Buildings
vehicles and Equipment
Public Employees
Blanket Bond
Public Officials and
Employees Liability
SALINA AIRIDRI' AUIHORITY
INSURANCE IN FDRCE
December 31, 1993
TYPe of Coveraqe
Bodi 1 Y in j illY and
property damage
F ire and 1 i gh bring ,
extended coverage,
varxialism and malicious
mischief-loss of rents
F ire and 1 i gh bring ,
extended coverage,
varxialism and malicious
mischief
Boiler
Liability
Ibysical damage-equipment
Medical payments
uninsured motorists
Honesty blanket
position bond coverage
Errors & omissions
excluding asbestos, excluding
pollution coverage on a
claims made basis,
5,000 deductible
(51)
Amount of
Coveraqe
$
500,000
500,000
1,758,570
4,800,800
1,000,000
500,000
1,204,380
2,000
500,000
100,000
500,000
SALINA AIRFüRI' AUIHORITY
SCHEIJJI.E OF FEDERAL ASSISTANCE
CATA.I.CX; OF FEDERAL LŒŒSTIC ASSISTANCE NUMBER 20.106
For the year ended December 31, 1993
Proqram Title
Federal ID
Number
Experrli tures
IÅ1r ing
Year
Amount
of A~1JëIT'ds
DEPARIMENT OF TRANSfORI'ATION
Federal Aviation Administration 3-20-0072-12
Runway protection zone
$ 178 $
33,513 ..----l!::>,161
$ 33,691 $ 30,161
--
--
Federal Aviation Administration 3-20-0072-14
Airfield signage
(52)
SALINA AIRIDRI' AUIHORITY
ca1PARISON OF GROSS CASH Bi\IANCES wrrn DEfDSI'IDRY SECURITY
December 31, 1993
B3.nk IV National B3.nk
salina, N.A. of America SUnflCMer Bank
GROSS CASH Bi\IAN CES
Demand deposit
Cash in checking $ 684,733 $3,349,562 $ (24,408)
Time deposits
Certificates of
deposit 20,000 60,000 20,000
REroRCHASE AGREEMENTS 145,000
'IDl'AIS 704,733 3,409,562 140,592
IESS FDIC mVERAGE 100,000 100,000 100,000
Bi\IANCES SECURABIE
BY mLIATERAL $ 604,733 $3,309,562 $ 40,592
SEaJRITY R&.PIRED
(100%) 604,733 3,309,562 40,592
SEaJRITY PROVIDED
BY DEfDSI'IDRIES 8,300,000 4,164,375 5,140,712
N-KXJNI' UNDERSECURED
BY STA'lUI'E $ $ $
(53)
Salina Airport Authority
OPERATING REVENUE HISTORY
Ten Years Ended December 31,1993
Other Total
Fiscal Rental Fixed Base Landing Operating Operating
Year Revenue Operator Fees Receipts Revenue
1984 $670,746 $69,211 $7,722 $6,927 $754,606
1985 699,956 77,907 16,731 20,703 815,297
1986 772,988 85,050 6,302 17,995 882,335
1987 807,511 87,352 5,988 19,726 920,577
~
lJ1
.¡:. 1988 783,958 96,133 28,702 19,217 928,010
1989 791,433 106,432 5,913 23,447 927,225
1990 736,242 127,765 7,599 9,220 880,826
1991 762,984 89,079 4,271 11,002 867,336
1992 791,974 82,345 5,565 16,136 896,020
1993 800,575 78,392 7,616 43,774 930,357
Source: Authority Records
Salina Airport Authority
OPERATING EXPENSE HISTORY
Ten Years Ended December 31 , 1993
Fiscal Year
Office &
Administrative
Expense
Maintenance
Expense
Total
Operating
Exl)ense
-------~~
1984
$193,322
$269,048
$462,370
1985
277,561
313,518
591 ,079
1986
294,798
284,918
579,716
1987
386,227
364,978
751,205
lJl
lJl
1988
456,770
326,346
783,116
1989
483,907
336,117
820,024
1990
430,225
408,578
338,936
769,161
1991
329,137
737,715
1992
415,819
347,498
763,317
1993
458,918
361 ,4 1 2
820,330
Source: Authority Records
Salina Airport Authority
FEDERAL FINANCIAL ASSISTANCE HISTORY
Ten Years Ended December 31, 1993
Fiscal Year
Federal Aviation
Administration
Airport
Impr9Y~JTIent Grim!
------ ~--
1984
$514,616
1985
736,357
1986
126,055
1987
2,180,711
1988
980,986
1989
613,642
1990
40,917
1991
29,430
1992
335,349
1993
30,162
Source: Authority Records
(S6 )
Salina Airport Authority
CAPITAL EXPENDITURE HISTORY
Ten Years Ended December 31 ,1993
Total
Fiscal Capital
Year Equipment Buildings Land Airfield Expenditures
--
1984 $46,386 $1,063,231 $ - $594,191 $1,703,808
1985 189,397 1 ,1 01 ,383 195,000 745,345 2,231,125
1986 48,267 443,071 345,058 172,157 1 ,008,553
1987 39,427 61,609 - 2,522,063 2,623,099
V1 1988 9,618 886,650 - 1,034,741 1,931,009
--.j
~
1989 94,524 2,243,128 - 648,583 2,986,235
1990 17,489 1,700,740 130,590 32,943 1,881,762
1991 36,268 400,406 - 62,257 498,931
1992 2,516 803,418 131,845 357,586 1,295,365
1993 20,773 134,602 250,279 33,692 439,346
Note:
Airfield improvements partially funded by Federal Aviation Administration grants
Source:
Authority Records
Salina Airport Authority
REVENUE BOND COVERAGE
Ten Years Ended December 31, 1994
Fiscal Pledged Revenue Bond
Year Revenue Debt Service
1984 $ - $
1985 503,191 56,987
1986 594,313 191,046
1987 597,978 195,640
1988 416,188 192,203
~
U1
00 1989 523,307 214,586
1990 409,915 211,780
1991 426,707 206,570
1992 531,761 286,024
1993 414,514 277,015
Coverage
8.83
3.11
3.05
2.16
2.43
1.93
2.06
1.86
1.50
",'_A__.
l"'Ult:~.
1. Revenues pledged to service Building Revenue Bonds, Series 1984
and Series 1985 and Leasehold Revenue Bonds, Series 1991
2. Pledged Revenue includes both operating revenue and Direct Finance
lease.
Source: Authority Records
Salina Airport Authority
PRINCIPAL CUSTOMERS
Year Ended December 31 , 1993
Compam
Schwan's Sales
Beech Aircraft Corporation
Kansas State University - Salina
S. P. Plastics
Ul
\.0
Moore's Midway Aviation
Flower Aviation
KASA FAB, Inc.
Federal Aviation Administration
Exide Corporation
%of
Operating Lease
& Direct Finance
Revenue Lease Reven ue
$302,407 22.0%
223,576 16.2%
189,446 13.8%
108,600 7.9%
56,507 4.1%
43,682 3.2%
36,000 2.6%
18,600 1.4%
17,000 1.2%
Note:
Total ot Operating Lease and Direct Finance Lease Revenue for
1993 was $1,376,007
Source: Authority Records
Salina Airport Authority
LOCAL GOVERNMENT PROPERTY TAX RATES, DIRECT AND OVERLAPPING
Ten Years Ended December 31, 1993
Unified Salina
Fiscal Saline City of School Airport
Year CouD.!Y Salina Dist. #305 Authority Other Total
-~
1984 1 8.1 56 36.360 61.320 3.000 4.805 123.641
1985 18.156 36.360 72.950 - 5.674 133.140
1986 21.000 36.360 80.048 - 5.777 143.185
1987 21.000 36.360 81.873 - 5.790 145.023
1988 21.000 36.360 88.779 - 6.487 152.626
~
CJ"\
0 1989 23.460 36.360 95.639 6.653 162.112
-
1990 19.074 30.015 76.492 - 5.599 131.180
1991 20.122 30.028 79.472 - 5.818 135.440
1992 20.464 29.828 83.372 - 6.074 139.738
1993 24.562 29.461 40.685 1.900 5.121 101.729
"'_A_.
l'fUlt::.
The Salina Airport Authority's 1993 mill levy will be available during fiscal year 1994
and is budgeted for 1994.
Source:
Saline County Clerk
Salina Airport Authority
PROPERTY TAX REVENUE
Ten Years Ended December 31 , 1993
Fiscal Year
-~-- .---
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
Source: Authority Records
( 61)
Property Tax
Revenue
-----~
$345,800
73,278
36,445
227
0
0
0
0
0
0
Salina Airport Authority
AIR TRAFFIC, FUEL FLOWAGE AND ENPLANEMENT TRENDS
Ten Years Ended December 31, 1993
Fiscal Fuel Flowage
Year Air Traffic Gallons Enplanements
1984 62,010 1 ,428,491 7,069
1985 51,560 1,767,135 7,353
1986 64,846 2,190,069 6,987
1987 60,678 2,547,120 8,721
ffi 1988 80,~ 11 2,872,298 9,159
N
-
1989 79,068 2,890,341 10,252
1990 96,254 3,136,668 5,707
1991 83,372 2,681,605 5,391
1992 71,697 2,552,156 5,799
1993 66,144 2,126,230 5,591
Source: Authority Records
Salina Airport Authority
MAJOR EMPLOYERS IN THE SALINA/SALINE COUNTY AREA
Major Private Employers
Approx. # Type of
CompaJ}Y Employees Business
Tony's Pizza 2,100 Frozen Foods Manufacturer
Great Plains Manufacturing 1,100 Farm Implements
Asbury Regional Health Care Center 843 Health Care
Exide Corporation 610 Battery Manufacturing
Phillips Lighting Co. 575 Fluorescent Lamp Manufacture
S1. John's Regional Health Center 575 Health Care
Beech Aircraft Corp. 531 Aircraft Sub-assemblies Manuf.
Western Auto 240 Warehouse Distribution
Œ\ Morrison Grain 200 Agricultural Products
w Eldorado National, Inc. 166 Medium & Small Shuttle Buses
KASA/KASA F ab 102 Industrial Controls & Steel
Fabrication
M_~lol Public Employers
Approx. #
Public Body Employees Type of Public Body
Unified School District #305 1,000 School System
City of Salina 658 City Government
Kansas State University - Salina 150 Technology College
Salina Airport Authority
SALINA POPULATION, DEMOGRAPHIC AND
LABOR STATISTICS
f>QQ!!Ip,tiQO
Year
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
Çl!y()f Salil1_~
~JiJ'1~çQ~I1~Y
41,875
41 ,882
41,932
42,007
42,092
42,188
42,303
42,510
42,841
43,202
48,931
48,940
48,973
49,062
49,1 55
49,210
49,301
49,301
49,301
49,400
Source: City Planning & Zoning
Saline County Clerk
[)em09@Ql1jcs
Measure
Median Age
Average # Per Household
Number of Households
Median Effective Buying
Income by Household
Effective Buying Income
(000)
City of Salina Saline Count~'
34 33
2.4 2.4
17,389 20,000
$28,016 $28,795
$579,812 $703,747
Source: Salina Area Chamber of Commerce
Economic Profile
Labor
Year
1989
1990
1991
1992
1993
Civilian
Labor Force
-_u_---- -
27,384
28,454
29,321
30,409
28,549
t;mpt()yed
26,130
27,261
28,073
29,270
27,261
RatE!
4.6°/Q
4.2°!c)
4.3%
3.7%
4.5%
U nempJ()Y~~
1.250
1,193
1,248
1,139
1,288
Source: Kansas Dept. of Human Resources
(64)
(THIS PAGE INTENTIONALLY LEFT BLANK)
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE 0- HARRISON. C_P_A-
THOMAS G- ARNETT, C.P.A-
719 EAST CRAWFORD. SALINA KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827-0048
INDEPENDENl' AUDrIOR' S REroRI' ON INl'ERNAL CX>NI'ROL STRUCIURE
BASED ON AN AUDTI OF FINANCIAL S'l'A'I'FNENl'S PERFORMED
ill ACCDRDi\NCE WI'IH GOVERNMENl' AUDITING S'l'ANIWID3
To the Board of Directors
Salina Airport Authority
Sal ina , Kansas
We have audited the financial statements of Salina Airport Authority, a
c::arrponent lIDit of the city of Salina, Salina, Kansas, as of arrl for the year
ended December 31, 1993 arrl have issued our report thereon dated February 28,
1994.
We corrlucted our audit in accordance with generally accepted audi.ting
standards , the Kansas Minllnum Standard Audit ProQram, Government Audi.~
standards, issued by the Comptroller General of the United States arrl the
provisions of Office of Management arrl Budget circular A-128, "Audits of state
arrl Local Governments." 'Ihose standards arrl CMB circular A-128 require that we
plan arrl perfonn the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
In plarming arrl perfornU.n;J our audit of the financial statements of Salina
Airport Authority, Salina, Kansas, for the year ended December 31, 1993, we
considered its internaJ. control structure in order to detennine our auditing
procedures for the purpose of expressing our opinion on the financial
statements arrl not to provide assurance on the internal control structure .
'Ihe :management of Salina Airport Authority, Salina, Kansas, is responsible
for establishing arrl maintaining an internal control structure. In fUlfilling
this responsibility, estimates arrl judgments by :management are required to
assess the expected benefits arrl related costs of internaJ. control structure
policies arrl procedures. 'Ihe objectives of an internal control stJ:ucture are
to provide :management with reasonable, but not absolute, assurance tl:at assets
are safeguarded against loss from unauthorized use or disposition, ard that
transactions are executed in accordance with :management's authorization arrl
recorded properly to pennit the preparation of financial statements jn
accordance with generally accepted accounting principles. Because of inherent
limitations in any internal control structure, errors or irregularities may
nevertheless occur arrl not be detected. Also, projection of any evaluation of
the structure to future pericds is subj ect to the risk that procedurE!S my
become inadequate because of ~es in conditions, or that the effectiveness
of the design arrl operation of policies arrl procedures may deteriorat:e.
(65)
MEMlJERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIFD PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUlJLlC ACCOUNTANTS
For the purpose of this report, we have classified the significan1: internal
control structure policies and procedures in the folla.ving categories::
l.
2.
3.
4.
Receipts
Purchases/disbursements
Cash and investment balances
Financial reporting
For all of the internal control structure categories listed above, we
obtained an understanding of the design of relevant policies and proa:rlures and
whether they have been placed in operation, and we assessed control risk.
We noted certain natters involving the internal control structure and its
operation that we consider to be reportable conditions under starrlards
established by the American Institute of Certified Public Acx:ountants.
Reportable conditions involve natters coming to our attention relatinc~ to
significant deficiencies in the design or operation of the internal o:>ntrol
structure that, in our judgment, could adversely affect the entity's ability to
record, proc:ess, sununarize, and report financial data consistent with the
assertions of management in the general purpose financial statements.
IÅle to small number of staff persons in the administrative office, the
Authority is not able to provide the segregation of duties common in larger
organizations.
A naterial weakness is a reportable condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively la.v level the risk that errors or irregularities in amounts
that would be naterial in relation to the financial statements being audited
nay occur and not be detected within a timely period by employees in the nonnal
course of performing their assigned functions.
OUr consideration of the internal control structure would not necessarily
disclose all natters in the internal control structure that might be reportable
conditions and, accordingly, would not necessarily disclose all reportable
conditions that are also considered to be naterial weaknesses as defined
above. Ha.vever, we believe the reportable condition described above is not a
naterial weakness.
'!his report is intended for the infornation of management and the Board of
Directors. '!his restriction is not intended to limit the distribution of this
report, which is a natter of public record.
7~i~
Salina, Kansas
February 28, 1994
(66)
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
INDEPENDENT AUDI'lOR' S REroRI' ON a::r-1PLIANCE BASED ON
AN AUDIT OF FINANCIAL S'l'A'l'E}1ENl' PERFORMED ill
ACCDRDi\NCE WI'IH GOVERNMENT AUDITING S'l'ANOl>.RL'S
'Ib the Board of Directors
Salina Airport Authority
Sal ina , Kansas
We have audited the financial stateIœnts of Salina Airport Authority, a
cc:.atq?Onent unit of the city of Salina, Salina, Kansas, as of arrl for the year
errled December 31, 1993 arrl have issued our rep:::>rt thereon dated FebrLJaIY 28,
1994 .
We corrlucted our audit in accordance with generally acx;epted auditing
starrlards , the Kansas Minimum Standard Audit ProQram, Government Audi~
Standards, issued by the COlt"ptroller General of the urn ted states arrl the
provisions of Office of Management arrl Budget circular A-U8, "Audits of state
arrl Local Governments." '!hose starrlards arrl Œffi circular A-U8 require that we
plan arrl perfonn the audit to obtain reasonable assurance about whether the
financial stat.eIœnts are free of material misstaterænt.
compliance with laws, regulations, contracts, arrl grants applicab,le 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 stateIœnts are free of material
misstateIœnt, we perfo:rmed tests of the Authority's compliance with certain
provisions of laws, regulations, contracts, arrl grants. However, the: obj ecti ve
of our audit of the financial stateIœnts was not to provide an opinion on
overall compliance with such provisions. Acco:rdingly, we do not e}Q?ress such
an opinion.
'!he results of our tests irrlicate 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 cæœ to our attention that caused us to believe that
the Salina Airport Authority had not complied, in all material respects, with
those provisions.
'Ibis report is interrled for the infonnation of management arrl thE~ Board of
Directors. '!his restriction is not intended to limit the distribution of this
report, which is a matter of pilllic record.
~~~ :I L.?f--
Sal ina , Kansas
February 28, 1994
l67)
MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTEc OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA. KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
INDEPENDENI' AUDITOR I S REFORI' ON SC1fEITIIE OF
FEDERAL FINANCIAL ASSISTANCE
To the Board of Directors
Salina Airport Authority
Sal ina , Kansas
We have audited the financial statements of Salina Airport Authority, a
component unit of the city of Salina, Salina, Kansas, for the year ended
December 31, 1993 arrl have issued our report thereon dated February 28, 1994.
'Ihese financial staterænts are the responsibility of Salina Airport l~ority,
Salina, Kansas management. our responsibility is to express an opinion on
these financial stat.e.rænts based on our audit.
We corrlucted our audit in accordance with generally accepted auditing
starrlards, the Kansas Minimum Standard Audit Prexmml, Government Auditinq
standards, issued by the Canptroller General of the united States aId the
provisions of Office of Managexænt arrl Budget Circular A-U8, "Audits of state
ani Local Governrænts." 'Ihose st:arrlards ani CMB circular A-U8 require that we
plan ani perfonn the audit to obtain reasonable assurance about whether the
financial staterænts are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the aIOCIUIlts and disclosures in
the financial staterænts. An audit also includes assessing the accounting
principles used and significant estimates made by managerænt, 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 fanning an opinion on the financial
staterænts of Salina Airport Authority, Salina, Kansas, taken as a whole. 'Ihe
accampanying schedule of federal financial assistance is presented for purposes
of additional analysis and is not a required part of the financial s1:atements.
'Ihe infonnation in that schedule has been subj ected to the auditing procedures
applied in the audit of the financial statements ani, in our opinion" is fairly
presented in all material respects in relation to the financial stab:mvants
taken as a whole.
~f~
Sal ina , Kansas
February 28, 1994
(68)
MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON. C.P.A.
THOMAS G. ARNETT. C.P.A.
719 EAST CRAWFORD. SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
INDEPENDENT AUDITOR I S REroRI' ON 'IRE mTERNAL CDNTROL
STRUCIURE USED rn AI:MINISTERING FEDERAL FINANCIAL
ASSISTANCE PRCGRAMS
'lb the Board of Directors
salina Airport Authority
sal ina , Kansas
We have audited the financial statements of salina Airport Authority, a
component unit of the city of salina, salina, Kansas, for the year ended
December 31, 1993 am have issued our rep:>rt thereon dated Febn1aIY 28, 1994.
We corrlucted our audit in aax>rdance with generally accepted audi.ting
starrlards, the Kansas Minimum starrlard Audit PrOCTram, Goverrnnent Audi'Qng'
standards, issued by the Comptroller General of the united states, ani Office
of Management arrl Budget(CMB) Circular A-U8, "Audits of State arrl lDc3.l
Goverrnnents. " 'nlose starrlards am CMB circular A-U8 require that we plan and
perfonn the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
In plarming arrl performi.n:J our audit for the year errled December 31, 1993,
we considered the Authority's i.nteJ:nal control structure in order to detennine
our auditing procedures for the purpose of expressing our opinion on .the
Authority's financial statements am on its compliance with requirements
applicable to maj or programs not to provide assurance on the internal control
structure. 'n1is rep:>rt addresses our consideration of internal contJ:1al
structure policies arrl procedures relevant to compliance with requirerænts
applicable to federal financial assistance programs. We have addressed
internal control policies am procedures relevant to our audit of the financial
statements in a separate rep:>rt dated Febn1aIY 28, 1994 .
'nle manageIOO!1t of salina Airport Authority, is responsible for establishing
arrl maintaining an i.nteJ:nal control structure. In fulfilling this
responsibility, estilnates am judgIænts by management are required to assess
the expected benefits am related costs of internal control structure policies
am procedures. 'nle abj ecti ves 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, that
transactions are executed in a ax> rdance with mana g emen t 's a uth or i z at ion and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted a<XX)UJ1ting principles, arrl that federal
(69)
MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
financial assistance programs are managed in compliance with applicable laws
am regulations. Because of inherent liIDitations in any internal control
structure, errors, irregularities, or instances of noncompliance may
nevertheless occur am not be detected. Also, projection of any evaluation of
the structure to future periods is subj ect to the risk that proc:edures may
becoræ inadequate because of c::l1anJes in conditions or that the effectiveness of
the design am operation of policies am procedures may deteriorate.
For the purpose of this report, we have classified the significant internal
control structure policies am procedures used in administering federal
financial assistance programs in the following categories:
Accounting Controls
1. Receipts
2 . Purd1ase/ disbursement
3 . Claims for reill1bursement
Administrative Controls
1 . General RequireIœnts
Political activity
Davis-Bacon Act
civil Rights
Federal financial reports
Drug-Free Workplace Act
2. Eligibility
For all the internal control structure categories listed above, we obtained
an UIXierstanding of the design of relevant policies am procedures and
determined whether they have been placed. in operation, arrl we assessed control
risk.
IÅ1ring the year errled December 31, 1993, Salina Airport Authority had no
major federal financial assistance programs am ~ed 100 percent of its
total federal financial assistance under the following nonmajor federal
financial assistance program: Federal Aviation Administration, A:iJ:port
Development Program.
We perfonœd tests of controls, as required by Œ1B Circular A-128, to
evaluate the effectiveness of the design am operation of internal control
structure policies arrl procedures that we have considered. relevant to
preventing or detecting material noncompliance with specific requirements,
general requirements, am requirements governing claims for advances am
reill1bursements arrl amounts claimed or used for matching that are applicable to
the aforementioned major program. OUr procedures were less in scope than would
be necessaIY to render an opinion on these internal control structurE! policies
am procedures. Accordingly, we do not express such an opinion.
(70)
We noted certain ll'atters involving the internal control structure and its
operation that we consider to be reportable conditions under standards
established by the American Institute of certified Public Accountants.
Reportable conditions involve ll'atters earning to our attention relatinJ to
significant deficiencies in the design or operation of the internal control
structure that, in our judgment, could adversely affect the Authority's ability
to administer federal financial assistance programs in accordance with
applicable laws and regulations.
I:Ue to small mnnbers of staff persons in the administrative office, the
Authority is not able to provide the segregation of duties COIm1lOn to larger
organizations.
A ll'aterial weakness is a reportable condition in which the design or
operation of one or more of the internal control structure elements does not
reduce to a relatively lOiN level the risk that noncompliance with laws and
regulations that would be ll'aterial to a federal financial assistance program
ll'ay occur and not be detected within a timely period by errployees in the normal
course of performing their assigned functions.
Oùr consideration of the internal control structure would not necessarily
disclose all ll'atters in the internal control structure that might be reportable
conditions and, accordingly, would not necessarily disclose all reportable
conditions that are also considered to be ll'aterial weaknesses as defined
above. HOiNever, we believe the reportable condition described above is not a
ll'aterial weakness.
'!his report is intended for the information of management and the Board of
Directors. '!his restriction is not intended to limit the distribution of this
report, which is a ll'atter of p..1blic record.
~1~
Sal ina , Kansas
February 28, 1994
(71)
HARRISON & ARN ETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT. C.P.A.
719 EAST CRAWFORD' SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827-0048
INDEPENDENT AUDTIOR' S REFüRI' ON <X.MPLIANCE
WI'IH '!HE GENERAL REX;PIREMENTS APPLI CABIE 'ID
FEDERAL FINANCIAL ASSISTANCE I?RCX;RAMS
To the Board of Directors
Salina. Airport Authority
Sal ina. , Kansas
We have audited the financial staterœnts of Salina. Airport Authority, a
component unit of the city of Salina., Salina., Kansas, as of and for the year
ended December 31, 1993 and have issued our report thereon dated February 28,
1994.
We have applied procedures to test Salina. Airport Authority, Salina,
Kansas, compliance with the following requireIænts applicable to each of its
federal financial assistance programs, the nonmajor program which is identified
in the schedule of federal financial assistance, for the year ended December
31, 1993: political activity, Davis-Bacon Act, civil rights, cash management,
federal financial reports, allowable costs, Dnlg-free Workplace Act,
administrative requireIænts.
our procedures were limited to the applicable procedures descr:i.bE:rl in the
Office of Management and Budget's "Compliance SUpplement for Single Audits of
state and I.ocal Govermænts". our procedures were substantially less in scope
than an audit, the objective of which is the expression of an opinion on Salina.
Airport Authority, Salina., Kansas, compliance with the requireIænts listed in
the preceding paragraph. Accordingly, we do not express such an opinion.
with respect to the items tested, the results of those procedures disclosed
no material instances of noncompliance with the requirelænts listed in the
secord paragraph of this report. With respect to items not tested, nothing
came to our attention that caused us to believe that Salina. Airport Authority,
Salina., Kansas, had not complied, in all material respects, with those
requireIænts .
'lhis report is interrled for the infonnation of m:magement and the Board of
Directors. 'Ihis restriction is not interrled to limit the distribution of this
report, which is a matter a f pill) 1 i c record.
~f~
Sal ina. , Kansas
February 28, 1994
(72)
MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT. C.P.A.
719 EAST CRAWFORD. SALINA. KANSAS 67401
PHONE: (913) 827-7244
FAX: (913) 827.0048
INDEPENDENT AIJDI'IDR' S REroRl' ON <XMPLIANCE WI'IH
SPECIFIC REXPffiEMENTS APPLICABLE 'IO NONMAJOR FEDERAL
FINANCIAL ASSISTANCE PROGRAM TRANSAcrIONS
'Ib the Board of Directors
Salina Airport Authority
Sal ina , Kansas
We have audited the financial stateIænts of Salina Airport Authority, a
canponent unit of the City of Salina, Salina, Kansas, as of arrl for the year
errled D=cember 31, 1993 arrl have issued our report thereon dated February 28,
1994.
In connection with our audit of the financial stateIænts of Salina Airport
Authority, arrl with our consideration of Salina Airport Authority's o:>ntrol
structure used to administer federal financial assistance programs, as required
by Office of Managerænt arrl Budget CiraJ.lar A-U8, "Audits of State and I.cx::al
Goverrnnents," we selected certain transactions applicable to certain nonmajor
federal financial assistance programs for the year errled D=cember 31, 1993.
As required by CMB Circular A-UB, we have perfo:rmed auditing proc:::edures to
test c:x:JlI1Pliance with the requireIœ.nts governing types of services allcMed or
unallowed arrl eligibility that are applicable to those transactions. ().Ir
procedures were substantially less in scope than an audit, the objective of
whidl is the expression of an opinion of Salina Airport Authority's o::mpliance
with these requireIœ.nts. Acx::ordingly, we do not express sudl an opinion.
With respect to the items tested, the results of those procedures disclosed
no material instances of noncxxnpliance with the requirerænts listed in the
preceding paragraph. with respect to items not tested, nothing CaIæ .to our
attention that caused us to believe that Salina Airport Authority had not
complied, in all material respects, with those requirerænts.
'!his report is interrled for the information of rnanagerænt arrl the Board of
Directors. '!his restriction is not interrled to limit the distribution of this
report, whidl is a matter of pùblic record.
7~ I~-+-
Sal ina , Kansas
February 28, 1994
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MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
SALINA AIRroRI' AUIHORITY
Sal ina , Kansas
SCHEIUIE OF INDEPENDENT AUDITOR'S FINDINGS
Year End.ed ~ 31, 1993
NONE
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