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Transcript of Proceedings (2018-A)TRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE OF $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A Legal Opinion Gilmore & Bell, P.C. Kansas City, Missouri DATED NOVEMBER 27, 2018 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 CLOSING LIST Copies of the transcript of proceedings for the above referenced issue (the "Bonds"), will be prepared and distributed as follows: 1. City of Salina, Kansas (the "Issuer") 2. Attorney General of the State of Kansas 3. Bernardi Securities, Inc., Chicago, Illnois (the "Original Purchaser") 4. George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor") 5. Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel") Document Number PROCEEDINGS AUTHORIZING THE IMPROVEMENTS 1. Beechcraft Road Project 2. Grand Prairie Phase II Improvement District • Petition • Preliminary Engineering Report • Excerpt of Minutes • Resolution No. 16-7394 authorizing the Improvement District • Affidavit of Publication of Resolution No. 16-7394 • Development Agreement • Final Engineering Report 3. River Trail Second Addition Improvement District • Petition • Preliminary Engineering Report • Excerpt of Minutes • Resolution No. 16-7365 authorizing the Improvement District • Affidavit of Publication of Resolution No. 16-7365 • Development Agreement • Final Engineering Report 4. Assessment Proceedings related to Grand Prairie Phase II and River Trail Second Addition Improvement District. • Statement of Final Costs • Assessment Roll Certification • Waiver of Assessment Proceedings for River Trail Second Addition • Excerpt of Minutes for acceptance of final cost and 1st reading of Ordinance No. 18- 10932 • Affidavit of Publication of Notice of Public Hearing • Certificate of Mailing regarding Notice of Public Hearing • Excerpt of Minutes showing public hearing and adoption of Ordinance No. 18-10932 • Ordinance No. 18-10932 •Affidavit of Publication of Summary of Ordinance No. 18-10932 • Certificate of Mailing of Notice of Assessment • Certificate of No Protest • Prepayment Certificate PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS 5. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 18-7613 6. Resolution No. 18-7613 authorizing the offering for sale of the Bonds 7. Notice of Sale, Preliminary Official Statement and Certificate Deeming Preliminary Official Statement Final 8. Affidavit of publication of the Summary Notice of Sale in The Salina Journal 9. Affidavit of publication of the Summary Notice of Sale in the Kansas Register 10. Official Statement with supplement dated November 21 , 2018 11 . Omnibus Continuing Disclosure Undertaking 12. Excerpt of Minutes of the governing body meeting evidencing adoption of first reading of Ordinance No. 18-10976 13. Excerpt of Minutes of the governing body meeting evidencing acceptance of the best bid of the Original Purchaser and passage of Ordinance No. 18-10976 and adoption of Resolution No. 18-7617 14. Ordinance No. 18-10976 authorizing the Issuance of the Bonds 15. Summary of Ordinance No. 18-10976 and Affidavit of Publication of Summary Ordinance No. 18-10976; City Attorney Certificate 16. Resolution No. 18-7617 prescribing the form and details of the Bonds 2 CLOSING DOCUMENTS 17. Transcript Certificate Exhibit A -Schedule of Outstanding General Obligation Indebtedness 18. Uniform Facsimile of Signature Certificates 19. Specimen Bond 20. Agreement Between Issuer and Agent 21 . DTC Documents Blanket Letter of Representations Underwriting Safekeeping Agreement 22. Rating Letter -Moody's 23. Closing Certificate 24. Federal Tax Certificate with attachments as follows: A. IRS Form 8038-G Evidence of Filing B. Receipt For Purchase Price C-1. Purchaser's Receipt For Bonds And Issue Price Certificate C-2. Municipal Advisor's Certificate Regarding Competitive Sale D. Description of Property Comprising The Financed Improvements E. Sample Annual Compliance Checklist F. Sample Final Written Allocation Schedule 1 Debt Service Schedule and Proof of Yield 25. Certificate of Municipal Advisor LEGAL OPINIONS 26. Approving legal opinion of Gilmore & Bell, P.C. 27. Approval letter of Attorney General MISCELLANEOUS DOCUMENTS 28. Closing Letter 29. Letter from State Treasurer Confirming Registration Number 3 I I I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS August 21, 2017 4.-00p.m. The Gty Commission convened at 3:45 p.m. for Qtizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:02 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard Trent Davis, Melissa Rose Hodges, and I<arl Ryan. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWAJU>S AND PROCLAMATIONS None. Cm.ZENS FORUM Karen Shade, 111 Wisconsin, stated the current audit on the website was the 2014. Jason Gage, City Manager, stated the 2015 audit was just completed and would be posted to the website and the 2016 audit was currently being worked on. PUBLIC HEARINGS AND ITEMS 5cHEDuLED FOR A CERTAIN TIME (5.1) Public hearing on the proposed 2018 budget. (5.la) Adoption of Ordinance No. 17-10897 adopting and appropriating the 2018 annual budget {S.lb) Resolution No. 17-7471 adopting the position classification and salary schedule for City employees for 2018. (5.lc) Resolution No. 17-7473 adopting the 2018 Comprehensive Fee Schedule for the City of Salina, Kansas. Mayor Crawford opened the public hearing. Cindy Beneke, Interim Director of Finance & Administration, summarized the proposed budget, challenges, revenues, proposed mill levy, expenditures, changes to the pay plan and the comprehensive fee schedule. Commissioner Davis stated the general fund balance on the staff report was listed at $3.7 million and would increase to $5.5 million for 2018. Jason Gage, Oty Manager, stated the remaining general fund balance for 2017 would be closer to SS million with the addition of the $1.2 million for the renaming of the Bicentennial Center and moving some sales tax money to the general fund for general fund stabiliz.ation. He also stated there would also be a slight increase in 2018 by moving some of the sales tax money to the general fund for general fund stabiliz.ation. Mr. Gage also stated staff would be bringing back a resolution to the Commission for changes to the general fund and a few other funds. Page 1 I Judy Larson, Salina, Kansas, stated it would be helpful to know the name and title of the person giving the presentation. Karen Shade, 111 Wisconsin, provided her thoughts on the comprehensive fee schedule pertaining to fireworks and pay schedule for city employees. Jason Gage, City Manager, stated the temporary use permit application fee was $525 and the perm.it fee was $2,100 for facilities 1,500 square feet or less, plus a $2.25 per square foot over 1,500 square foot. I 17-0237 Commissioner Blanchard stated the compensation of an employee was not based on just the hourly wage. Mr. Gage stated there was a range and there were two (2) positions under the wage given to the Commission from the workers coalition. He continued to state that the employee would have an ability to increase due to performance evaluations. Ms. Shade thanked Mr. Gage for the information on the fireworks fees. Commissioner Davis asked what a living wage was considered. Mr. Gage stated the living wage was the base pay for an individual employee. He continued to state employees had the option to have health insurance through the City of Salina along with retirement, life insurance and other benefits. Commissioner Blanchard stated the City Commission approved a couple of years ago an increase in wages for City employees and the increase in economic development to create additional jobs in Salina. There being no further comments the public hearing was dosed. Moved by Commissioner .Davis, seconded by Commissioner Hodges, to adopt Ordinance No. 17- 10897 adopting and appropriating the 2018 annual budget. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Davis, to adopt Resolution No. 17- 7471 adopting the position classification and salary schedule for City employees for 2018. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Blanchard, seconded by Commissioner Ryan, to adopt Resolution No. 17-7473 adopting the 2018 Comprehensive Fee Schedule for the City of Salina, Kansas, as amended. Aye: (5). Nay: (0). Motion carried. CONSENT AGENDA (6.1) Approve the minutes of August 14, 2017. (6.2) Approve Resolution No. 17-7472 appointing members to various boards and committees: 17-0238 Moved by Commissioner Blanchard, seconded by Commissioner Hodges, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) First reading Ordinance No. 17-10896 approving the issuance of general obligation bonds by the Salina Airport Authority for the purpose of financing the cost of certain Capital Improvements located at the Salina Regional Airport and Airport Indusbial Center; and approving a contract between the City and the Board of Directors of the Salina Airport Authority. Page 2 I I 17-0239 117-0240 Greg Bengtson, City Attorney, explained the bond issuance. Jason Gage, City Manager, stated Tim Rogers provided a presentation at a recent study session on the project. Commissioner Davis asked if the City of Salina would be responsible to pay the bonds if the Salina Airport Authority could not pay the bonds. Mr. Bengtson stated the bonds were not backed by the City of Salina and would not be included in the City of Salina's bond indebtedness. Commissioner Blancha.rd stated the project would fall within the 2018 or 2019 bond schedule and asked if the project could be listed within the capital improvement plan (CIP}. Mr. Gage stated it could be placed in the CIP for 2019. Com.missioner Da\•is asked if the bonds would be issued by the City of Salina or the Salina Airport Authority. Mr. Bengtson stated temporary notes would be issued now to fund the project by the Salina Airport Authority but the long tem1 financing would be issued by the City of Salina. A conversation ensued between the Commission, Mr. Gage and Mr. Bengtson regarding the issuance of temporary notes and bonds for the project. Commissioner Hodges asked if there would be hangar siding improvements as pa.rt of the project. Tim Rogers, Salina Airport Authority Executive Director, stated there would be hangar siding improvements along with several other key components that would be included within the project. Commissioner Hodges asked who would be responsible for maintaining the landscaping portion of the roadway improvements. Mr. Rogers stated the improvements would be within the city right-of-way and would be turned back over to the City of Salina. He continued to state the design professional on the project would help work with City of Salina staff for planting the appropriate plants and foliage and the Salina Airport Authority would continue to work with the City of Salina for maintenance of the right-of-way. Moved by Commissioner Hodges, seconded by Commissioner Davis, to adopt Ordinance No. 17- 108% approving the issuance of general obligation bonds by the Salina Airport Authority for the purpose of financing the cost of certain Capital Improvements located at the Salina Regional Airport and Airport Industrial Center; and approving a contract between the City and the Board of Directors of the Salina Airport Authority. Aye: (5). Nay: (0). Motion carried. (7 .2) First reading Ordinance No. 17-10895 designating certain streets as main traffic ways pursuant to KS.A. 12-685. Dan Stack, City Engineer, explained the state statute and trafficway designation for Beechcraft Road, project improvements, fiscal impact and action options. Com.missioner Blanchard asked for clarification on the maintenance of the landscaping. Jason Gage, City Manager, stated the City of Salina's obligation would be the right-of-way area. Tim Rogers, Salina Airport Authority Executive Di.rector, stated the design professional was given a short amount of time to provide the conceptual drawing provided to the City Commission. He continued to state the maintenance for the landscaping could be addressed as part of the design of the project with input given by city staff. Moved by Commissioner Blanchard, seconded by Commissioner Hodges, to pass Ordinance No. 17-10895 designating certain streets as main traffic ways pursuant to KS.A. 12-685 on first reading. Aye: (5). Nay: (0). Motion carried. Page 3 I 17-0241 I 17-0242 I (7.3) Resolution No. 17-74-75 authorizing the Mayor to sign the Sale and Purchase of Playground Equipment Agreement for the purchase of a replacement playground structure for Sunset and Oakdale Parks, from Athco, LLC. Chris Cotten, Director of Parks & Recreatfon, explained the life expectancy of the playground equjpment at Sunset Park and Oakdale Park, fiscal impact and action options. Commissioner Blanchard asked if the type of safety surfacing was what was recommended. Mr. Cotten stated the safety surface was approved and one of the recommended surfacing for ADA compliance. Commissioner Hodges asked how the equipment would be installed and how long it would take to install the equipment. Mr. Cotten stated the City of Salina had two (2) certified safety installers on staff that would install the equipment. He continued to state the equipment would be installed at Sunset Park first then staff would move to Oakdale Park to install the equipment. Moved by Commissioner Davis, seconded by Commissioner Ryan, to adopt Resolution No. 17- 7475 authorizing the Mayor to sign the Sale and Purchase of Playground Equipment Agreement for the purchase of a replacement playground structure for Sunset and Oakdale Parks, from Athco, LLC. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTIIER BUSINESS Commissioner Blanchard stated the next community spruce up day was coming in October and asked if there had been a free dump day in the past for residents to remove items. Jason Gage, City Manager, stated a free dump day had been done in the past. Commissioner Blanchard asked if the City Conunission would be on board for staff to look at the possibility for another free dump day in the future. The Commission reached a consensus for staff to look into the possibility. Commissioner Davis asked if staff would keep an eye out for the number of restrooms within the Salina Fieldhouse. Mr. Gage stated staff would have to see how the facility restrooms would be for a large event Michael Schrage, Deputy City Manager, stated the required number of fixtures was estimated based on the estimated number of people in attendance but staff would keep an eye on it. .Mr. Gage stated there was some publicity on his candidacy for the city manager position in Topeka, Kansas; he would like the public to know he had submitted his letter of withdrawal for the position. He continued to state he was excited about the future in Salina. ADJOURNMENT Moved by Commissioner Davis, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 5:10 p.m. [SEAL] Page 4 I ATTEST: ~o..JAdj_ t0\Da Shandi Wicks, CMC, City Clerk I I Page 5 I I I I z ... w .. c 'i "' ~ i ~ 8 CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS August 28, 2017 4:00p.m. The City Commission convened at 2:00 p.m. for Bond Refunding Discussion, at 2:30 p.m. for Review of Survey Results for Sanitation and Recycling and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Conunissioners was called to order at 4:05 p.m. in Room 107. City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: t-.fayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges, and Karl Ryan. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS (3.1) The month of September, 2017 as "National Recovery Month" in the city of Salina. Don Green, Senior Recovery Coach, read the proclamation and announced associated events. (3.2) Joan Ratzlaff with the Salina Area \'\1orkers' Coalition read the Labor Day proclamation and announced associated events. CmZENS FORUM Chris Soldan, 712 W. South, would like the yard maintenance ordinance reviewed to allow for a notice to be sent for each time a yard would need mowed instead of just one notice. He continued by providing information on the cost of an abatement for mowing. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of August 21, 2017. (6.2) Approve Resolution No. 17-7474 authorizing the City Manager to renew a three- year City Right-of-way Mowing Contract with Fox Lawn & Landscaping. (6.3) Approve Resolution No. 17-7478 appointing members to various boards and commissions. (6.4) Consider recommendations for grant fund allocation to local agencies for the 2017 Kansas Emergency Solutions Grant and approve Resolution No. 17-7479 implementing a conflict of interest policy for the Emergency Solutions Grant Program. Commissioner Davis requested that Item 6.4 be removed from the consent agenda. Mayor Crawford stated she felt boards and commissions \·vere a very serious part of our city government and would like board members to take their appointment very seriously. She Pagel I z ... "' " 17-0~3 I 117-0244 17-0245 117-0246 continued to state the importance of the board meetings and the attendance of the board members. Commissioner Davis asked if the approval of 6.4 was for the adoption of the conflict of interest policy or acceptance of the funds. lvlichael Schrage, Deputy City Manager, stated the action was to approve the adoption of the conflict of interest policy and the acceptance of the funds . Moved by Commissioner Ryan, seconded by Commissioner Hodges, to approve the consent agenda less Item 6.4. Aye: (5). Nay: (0). Motion carried. (6.4) Consider recommendations for grant fund allocation to local agencies for the 2017 Kansas Emergency Solutions Grant and approve Resolution No. 17-7479 implementing a conflict of interest policy for the Emergency Solutions Grant Program. Commissioner Davis asked why the Ashby House request was not fulfilled for the street outreach. Sue Cline, Development Services Supervisor, responded by stating the City of Salina no longer had an opportunity to provide their input on the allocation. She continued to state that the KHRC fully reviewed the requests and had notified staff that they do not like to duplicate the funds to multiple agencies for the same services. t\1avor Crawford asked what HMIS stood for. Ms. Cline stated it stood for Homeless , Management Information System. She continued to provide information on the system and how it worked. Moved by Commissioner Davis, seconded by Commissioner Hodges, to approve Resolution 17- 7479 implementing a conflict of interest policy for the Emergency Solutions Grant Program. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Blanchard, to accept the conditional grant a\vard for the 2017 Emergency Solutions Grant (ESG-FFY2017) from the Kansas Housing Resources Corporation (KHRC), to benefit local recipient agencies, and authorize the Mayor and Finance Director to sign the related grant documents for allocations. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Second reading Ordinance No. 17-10896 approving the issuance of general obligation bonds by the Salina Airport Authority for the purpose of financing the cost of certain Capital Improvements located at the Salina Regional Airport and Airport Industrial Center; and approving a contract between the City and the Board of Directors of the Salina Airport Authority. Mayor Cravdord noted that Ordinance No. 17-10896 was passed on first reading on August 21, 2017. Since that time no comments have been received. As was noted during the discussion preceding first reading, paragraph 6 of the Contract has been supplemented by the addition of language indicating that the city's reimbursement of the Salina Airport Authority temporary notes "shall be made no later than July 25, 2019." Moved by Commissioner Davis, seconded by Commissioner Ryan, to adopt Ordinance No. 17- 10896 approving the issuance of general obligation bonds by the Salina Airport Authority for the Page 2 I I I z Q. w ! ~ i J 17-0247 purpose of financing the cost of certain Capital Improvements located at the Salina Regional Airport and Airport Industrial Center; and approving a contract between the City and the Board of Directors of the Salina Airport Authority on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. (7.2) Second reading Ordinance No. 17-10895 designating certain streets as main traffic ways pursuant to K.S.A. 12-685. Mayor Crawford noted that Ordinance No. 17-10895 was passed on first reading on August 21, 2017 and since that time no comments have been received. Moved by Commissioner Blanchard, seconded by Commissioner Davis, to adopt Ordinance No. 17-10895 designating certain streets as main traffic ways pursuant to K.S.A. 12-685 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. (7.3) Resolution No. 17-7476 authorizing the rviayor to enter into an agreement for the purchase of a dedication monument in honor of tvlrs. Karen M. Graves for her local service to and for the City of Salina. Chris Cotten, Direc~or of Parks and Recreation, explained the request, agreement and action options. Commissioner Ryan asked if Memorial Art Company was the sole company the City of Salina used for the type of services offered. Mr. Cotten, stated due to the low project cost, staff was not required to obtain official bids for the project. Commissioner Blanchard stated he looked at alternatives for a scheme and had asked Mr. Main with Memorial Art Company for his thoughts and opinions on the memorial. He continued to provide his thoughts on the cost for the monument. Commissioner Davis asked where the memorial plaza will be located at. Mr. Cotten stated it would be located at the Tony's Pizza Event Center in the northwest comer next to the seating area. Commissioner Hodges provided her thoughts on the honoring of Mrs. Karen M. Graves and all women mayors in Salina. She continued to thank key staff members and various agencies in the City of Salina that helped to make it happen. 17-0248 Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 17- 7476 authorizing the Mayor to enter into an agreement with t\fain Brothers, Inc. d/b/ a Memorial Art Company for the purchase of a dedication monument in honor of Mrs. Karen M. Graves for her local service to and for the City of Salina. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1) Acknowledge receipt of a constitutional economic development tax exemption application from the Salina Economic Development Corporation requesting a property tax exemption for a research and development facility (the Bulk Solids Innovation Center). Dean Andrew, Director of Planning, explained the policy, application submittal and requested action. Commissioner Hodges asked if the only action today '"'as the acceptance of the application. Page 3 I I 17-0249 Mr. Andrew stated yes, the only action today was to accept the application. Commissioner Blanchard asked if the submittal of an application according to the policy was prior to the construction or development of a building. Mr. Andrew stated the order of the policy would typically be prior to construction of the building but there could be deviations within the policy. Commissioner Blanchard asked if the application was a standard application or if the information submitted varied. Jason Gage, City Manager, stated the application was standard but there could be deviations in the application process. Greg Bengtson, City Attorney, stated the policy would anticipate this type of request but it was a unique request. He continued to state the applicant would probably be responsive to welcoming questions for any additional information the Commission would like to know. Commissioner Blanchard stated he would like to know what role the Kansas Department of Commerce played in the development of the building and would like clarification on the number of and type of jobs created. Mr. Andrew stated the references within the application were ·within a report that was submitted to the economic development administration and that information would be fully available to the Commission at the time of the public hearing. Moved by Commissioner Blanchard, seconded by Commissioner Hodges, for the City Commission to ackno·wledge receipt of the tax exemption application, refer the application to the City Manager for an analysis of the costs and benefits of granting such an exemption and authorize staff to schedule a public hearing to consider the application. Aye: (5). Nay: (0). Motion carried. (8.2) Authorize the Mayor to sign the final plat of the Dakota Addition, a replat of Lots 1- 8, Block 15 of the Elmdale Addition to the City of Salina, Saline County, Kansas. Dean Andrew, Director of Planning, explained the request and action options. Commissioner Blanchard asked if this request could be characterized similar to the rezoning on Ohio and Van Home that was done recently. Mr. Andrew stated yes, the rezoning would be to use the vacant lot to develop smaller buildable lots for businesses to build on. 17-0250 Moved by Commissioner Hodges, seconded by Commissioner Blanchard, to authorize the Mayor to sign the plat for the proposed Dakota Addition. Aye: (5). Nay: (0). Motion carried. 17-0251 OTHER BUSINESS (9.1) Request for executive session (legal). Moved by Commissioner Davis, seconded by Commissioner Hodges, to discuss contract negotiations \'\rith legal counsel pursuant to the attorney-client privileged communications with legal counsel exception, KS.A. 45-7319(b}(2), for 30 minutes. The open meeting will resume in this room at 5:30 p.m. Aye: (5). Nay: (0). Motion carried. 117-0252 The City Commission recessed into executive session at 5:00 p.m. and reconvened at 5:30 p.m. No action was taken. l\foved by Mayor Crawford, seconded by Commissioner Hodges, to extend the current executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried. Page 4 117-0253 I I z ... w The City Commission recessed into executive session at 5:30 p.m. and reconvened at 6:00 p.m. No action was taken. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to extend the current executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 6:00 p.m. and reconvened at 6:30 p.m. No action was taken. ADJOURNMENT Moved by Co~ssioner Ryan, seconded by .t-.fayor Crawford, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:30 p.m. [SEAL] AITEST: ~ Allison Strait, Deputy City Clerk Page 5 I "' ~ z ... w ~ ~ i I c 8 I I Summary published in 111e Salina Journal on A<ACj v.s+-11_, 2017. Posted on the Citv of Salina website from August 1.-°> to September\ 'l. , 2017. ORDINANCE NUMBER 17-10895 ORDINANCE DESIGN A TING CERTAIN STREETS WITHIN THE CITY OF SALINA, 'SAS, AS MAIN TRAFFICWA YS. ;\'JIEREAS, K.S.A. 12-685 et seq. (the "Act") provides that the governing body of any city is authorized and mpowered to designate and establish, by ordinance, as a main trafficway, any existing or proposed street, ule\•ard, avenue or part thereof, within such city, the primary function of which is, or shall be, the movement of through traffic between areas of concentrated activity within the city or between such areas within the city nd traffic facilities outside the city perfonning the function of a major trafficway; and such designation by the oveming body shall be final and conclusive; and VHEREAS, certain Ordinances have previously designated certain streets as main trafficways pursuant to the ct; and WHEREAS, the Governing Body of the City of Salina, Kansas (the "City"), hereby finds and detennines that certain additional streets within the City should be designated and established as main trafficways as provided by and under the authority of the Act. SO NOW THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KAl"'JSAS: Section I. Designation. It is hereby authorized, ordered and directed, under the authority of the Act, that the streets hereinafter set forth located within the limits of the City are hereby designated and established as main trafficways: Becchcraft Road Section 2. Summary of ordinance for publication. That this ordinance shall be in full force and effect from and after its adoption and publication once of a summary thereof in the official city newspaper. Ordinance No. 17-10895 Summary On August 28, 2017, the City of Salina, Kansas, passed Ordinance No. 17-10895. The ordinance designates Beechcraft Road as a main trafficway within the city limits. A complete copy of the ordinance is available at www.salina-ks .gov for not less than 7 days following publication date of this summary or in the office of the city clerk, 300 W. Ash Street, free of charge. This summary is certified to be legally accurate and sufficient pursuant to the laws of the State of Kansas by the city attorney. [SEAL] ~illiL !O\Q ¥..k lication summary set forth above is certified this <'M:fay of August, 2017. Publisher's Affidavit I, ---'C....,.b.._.ri ... s,..ty,_._F.,.jn,..k,._ ___ , being duly sworn declare that I am a I egal Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Ordinance 17-10895 Notice has -~-------~-~---- been correctly published in the entire issue of said newspaper one time, publication being given in the issue of August 31, 2017 Subscribed and sworn to before me, this day of A.D.20 Notary Public Printer's Fee S49.50 I I I .. .. CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS September 11, 2017 4:00p.m . The City Commission convened at 2:30 p.m. for North Salina Civic Engagement and Grant Update and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 10,7, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye]. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges, and Karl Ryan. Also present:· Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Allison Strait, Deputy City Clerk. AWARDS AND PROCLAMATIONS (3.1) The month of September, 2017 as "Childhood Cancer Awareness Month" in the city of Salina. Oscar Campa, childhood cancer survivor, read the proclamation. Heidi Feyerherm-Smith, founder of the Love Chloe Foundation, announced associated events. (3.2) The day of September 16, 2017 as "Salina Day for Kansas Wesleyan Football" in the City of Salina. Christian McQueen, Senior Football Player, read the proclamation and announced associated events. Mike Hermann, Director of Athletics, announced additional associated events. Commissioner Blanchard asked for the names of the rest of the Kansas Wesleyan football team members and Oscar Campa' s family that were present. CITIZENS FORUM None. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of August 28, 2017. 17-0255 Moved by Commissioner Blanchard, seconded by Commissioner Davis, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Approve Resolution No. 17-7477 authorizing the offering for sale of water and sewage system revenue refunding bonds, series 2017, including the approval of a fiduciary agreement for municipal advisory services specific to this revenue bond refunding action with George K. Baum & Company. Page 1 117-0256 I z n. w " c ~ i ;; :si 1 u 17-0257 17-0258 117-0259 Jason Gage, City Manager, explained the bonds, the savings associated with refunding the bonds and action options. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 17- 7477 authorizing the offering for sale of water and sewage system revenue refunding bonds, series 2017, including .the approval of a fiduciary agreement for municipal advisory services specific to this revenue bond refunding action with George K. Baum & Company. Aye: (5). Nay: (0). Motion carried. (7.2) Beechcraft Road Improvement Project authorlz,ation. (7.2a) Approve Resolution No. 17-7480 adding the Beechcraft Road Improvement Project to the City's 2018 Capital Improvement Plan. (7.2b) Approve Resolution No. 17-7470 authorizing the improvement or re- improvement of certain main trafficways within the City of Salina, Kansas; and providing for the payment of costs thereof. Jim Kowach, Director of Public Works, explained the project, fiscal impact and action options. Commissioner Blanchard asked if the remainder of the CIP would remain the same. Jason Gage, City Manager, stated he didn't see the need to pull anything out, but moving forward, they should be careful with adding more projects to the CIP that were not anticipated. Commissioner Blanchard then asked if adding Beechcraft Road would raise the property taxes. Mr. Gage stated that adding it would not raise the property taxes. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to adopt Resolution No. 17- 7480 adding the Beechcraft Road Improvement Project to the City's 2018 Capital Improvement Plan. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Davis, to adopt Resolution No. 17- 7470 authorizing the improvement or re-improvement of certain main trafficways within the City of Salina, Kansas; and providing for the payment of costs thereof. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTHER BUSINESS Commissioner Blanchard stated recognition for September 11 and the sacrifice and bravery from first responders on that day. He then expressed the importance for the public to stay out of the way for all first responders during accidents. Commissioner Davis asked for verification on next week's commission meeting. Mr. Gage stated there would be no meeting due to the League Conference. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to discuss confidential legal matters with legal counsel pursuant to the attorney-client privileged communications with legal counsel exception, KS.A. 45-7319(b)(2), for 20 minutes. The open meeting will resume in this room at 4:55 p.m. Aye: (5). Nay: (0). Motion carried. Page2 I "' "' 17-0$0 w .. c i "' i ~ c: 8 17-0261 117--0262 17-0263 .. I Mr. Gage stated people are encouraged to stay as there may be action after they return from executive session. The City Conunission recessed into executive session at 4:35 p.m. and reconvened at 5:00 p.m. Moved by Commissioner Blanchard, seconded by Commissioner Ryan, to add item no. 8.1 to consider initiation of a zoning map amendment that would change the zoning classification of the Ambassador Hotel site at 1616 W. Crawford Street from C-6 (Heavy Commercial) to C-5 (Service Commercial). Aye: (5). Nay: (0). Motion carried. Dean Andrew, Director of Planning, explained the current and proposed zoning classification and action options. Commissioner Blanchard asked if the action would be a zoning text amendment. Mr. Andrew stated yes, but there would also be a geographic component to it and it would be in two parts. A conversation then ensued between Commissioner Blanchard and Mr. Andrew regarding the zoning and overlay. Moved by Commissioner Blanchard, seconded by Commissioner Hodges, to direct staff to initiate zoning map amendment to downzone property at 1616 W. Crawford from C-6 to C-5 and to direct staff to initiate zoning text geographic amendment to have Planning Commission deliberate on overlay district.from 1-135 to Broadway to be consistent with direction of the Comprehensive Plan. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Davis, seconded by Commissioner Hodges, to discuss confidential legal matters with legal cowisel pursuant to the attorney-client privileged communications with legal counsel exception, KS.A. 45-7319(b)(2), for 10 minutes. The open meeting will resume in this room at 5:20 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:10 p.m. and reconvened at 5:30 p.m. No action was taken. ADJOURNMENT Moved by Commissioner Hodges, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 5:30 p.m. [SEAL] ATIFST: ~ VJW-U Shandi Wicks, CMC, City Clerk Page 3 I I I z Q. w RESOLUTION NO. 17-7470 A RESOLUTION AUTHORIZING THE IMPROVEMENT OR REIMPROVEMENT OF CERTAL~ MAIN TRAFFICWAYS WITHIN THE CITY OF SALL~A, KANSAS; AND PROVIDING FOR THE PAYMENT OF THE COSTS THEREOF. WHEREAS, K.S.A. 12-687 provides that the governing body of any city shall have the power co improve or reimprove or cause to be improved or reimproved, any main trafticway or trafficway connection designated and established under the provisions of K.S.A. 12-685 et seq. (the "Act"), and such improvement or reimprovement may include grading, regrading, curbing, recurbing, guttering, regunering, paving, repaving, macadamizing, remacadamizing, constructing, reconstructing, opening, widening •. exrending, rounding comers, straightening, relocating, building any necessary bridges and approaches thereto, viaducrs, overpasses, underpasses, culve11s and drainage, trafficway illumination, traffic control devices, pedestrian ways, or other improvements or any two or more of such improvements or reimprovements and the acquisition of right-of-way by purchase or condemnation when necessary for any of such purposes; and WHEREAS, the Act provides that all costs of improvements or reimprovements authorized thereunder, including acquisition of right-of-way, engineering costs, and all other costs properly attributable to such projects, shall be paid by the city at large and may be funded, among others, by the issuance of general obligarion bonds; and WHEREAS, the governing body of the City of Salina, Kansas (the "City"), has previously designated ce11ain streets within the Ciry as main trafficways, as provided by and under the authority of the Ace; and WHEREAS, said governing body hereby finds and determines that it is necessal)' to improve or reimprove said main rrafficways, and to provide for the payment of the costs thereof, all as provided by and under the autho'rity of the Act. THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section I. Project Authorization. It is hereby deemed and declared to be necessary to improve or reimprove the main trafficways hereinafter set forth under the authority of the Act: Beechcraft Road Project. The complere reconstruction of the west I, 192 feet of Beechcraft Road, including curb and gutter, replacement of storm sewer, installation of street lights and the construction of a "srreetscape" plan for the full length of Beechcraft Road (including burial of overhead utility lines and insrallarion of sidewalks, bike parhs and landscaping), and all other related and necessary improvements (the "Projecr"). Section 2. Financing Authority. The estimared costs of the Project, including construction, engineering fees, acquisition of right-of-way and easements, contingencies and administrative expenses are S 1,500,000. The costs of the Project shall be payable from the proceeds of general obligation bonds of the City issued under aurhority of the Act in an amount not to exceed $ J ,500,000, plus interest on any remporal)' financing and costs of issuance. Section 3. Reimbursement. ·The bonds described above may be issued to reimburse expenditures made on or after the dare which is 60 days before the date of this Resolution, pursuant to Treasury Regulation § 1.150-2. Section 4. Effecti\'e Date. This Resolution shall take effect and be in full force from and after I its adoption by the governing body of the City. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] I I 2 I I I z a.. w ! "' I ADOPTED AND APPROVED by the governing body of the City of Salina, Kansas, on September 11 , 2017. (Seal) AlTEST: (Signature page to Resolution) PETmON4385 TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Cit~, Cl&rk's Office Filed We, the undersigned, owner' of record of property located within the City of Salina, K&nsag (the "City") do hereb)' respectively request th&t the Gcverablg Body of the Cit)• create and dedgm.te an improvement climict for the purpose of Dlakfng certain improvemenu iD tile ma.nDer provided by K.S..A. l2-6a01, etEl!lJ.. 1. The general nature of the proposed improvement.£ are as follow1: The cutb, gutter, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"). The installati.on of approximately S6 lineal feet of stonn sewer pipe, inlets, and all appurtenances thereto {the ''Drainage Improvements"). The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, fittings, &erVice connections for wat.er lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 1,165 lineal feet of eight-inch sanitmy sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sani1ary Sewer Improvements .. ). (collectively, the "Improvements"). l. The estimr.ted or probdJle cost of the Improvemenu u: Five Hundred Sixty-One Thousand Six Hundred Forty-Two Dollars and Nineteen Cents ($561,642.19) .3. The extent of the proposed improvement diltrict to b.e utened is: Lot.s 7 through 17 and Lots 38 through 43. Block 2. all in the Grand Prairie Addition, City of Salina, Saline Cowrty, Kansas. (the "Improvement Dhtrict''). 4. The proposeci' metho~ of anessmeat tbaD be: Each lot in the Improvement District shall be assessed equally per lot for costs of the various Improvements. S. The proposed 1.ppordonment of cost between the Improvement District uad the City at Large ii: One hundred percent (1 OOC'-') of the total cost of the Improvements shall be essened to the Improvement District and no portion of costs shall be paid by the City at Large. 1 The dgnen of this Petition hereby request that the Improvements be made without notice and heuing u required by K.S.A. 12-6a04(a). NAMES MAY NOT BE WITBDRA WN FROM THE PETITION BY THE SIGNERS THEREOF AFrER THE GOVERNING BODY COMMENCES CONSIDERATION OF THE PETITION OR LATER THAN SEVEN (7) DAYS AFI'ER Fll.JNG OF THE PETmON WITH THE CITY CLERK, WHICHEVER OCCURS FIRST. The petitioners certify, under oath. that they have no financial interest in any property with delinquent special assemnent enywhcre within the city of Salina. CORNERSTONE DEVLOPMENT GROUP, LLC LEGAL DESClllPTION OF PROPERTY OWNED WITHIN THE PROPOSED IMPROVEMENT DISTRICT: Lob 7 through 10, Lob 14 through 17 ud Lots 37 through 43, Block 2; Grand Prairie Addition, all in tbe City of Salina, Saline County, Kamu. STATE OF KANSAS ) ) SALINE COUN1Y ) I, the u.nden.igoed Notary Public, hereby ca1ffy that the signature appearing above l:2tulne ud that tlW cloC11JDent was liped before me on thk IS day of I t ba e oil! LJ.o. C,i;_ ~L /.3. // Notary Public ' My appointment explrea: fi· L.a -1.7 2 File No. 63 156 Preliminary Engineering Report Petition No. 4385 \: /,. /- / '· Grand Prairi6,Addition Phase II Utility, Street, and Drairtage. lID:p(ovements ....... December 2016 Wayne E. Nelson, P.E. Petition 4382 Grand Prairie Addition Phase D SCOPE OF WORK The curb, gutter, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"). The installation of approximately 56 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 1,165 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). BENEFIT DISTRICT Grand Prairie Addition Lots 7 through 17 and Lots 38 through 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas. (the "Impro,•ement District"). ADOPTION OF ASSESSMENT The assessment with accrued interest to be levied as a special assessment tax upon the property included with the benefit district concurrent with the general property tax and shall be payable in fifteen equal annual installments. Each parcel in the Improvement District shall be assessed equally per lot for costs of the various Improvements benefitting such lot as described under the heading Apportionment of Cost below. APPORTIONMENT OF COST Eighty percent (80%) of the total cost of improvements shall be assessed to the Improvement District, twenty percent (20%) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. 3 Petition 4382 Grand Prairie Addition Phase Il Cost of Improvements Item# Item Quantity Unit Unit Cost Extension 1 Mobilization 1 LS 1,650.00 1,650.00 2 Clearing and Grubbing 1 LS 2,250.00 2,250.00 3 Street grading 5,858 SY 3.40 19,917.20 4 Backfill of Curb and Gutter 4,677 SY 1.00 4,677.00 5 Connect to Existing Inlet 0 Ea 950.00 0.00 6 Storm Pipe, 18" RCP 0 LF 60.00 0.00 7 Curb &Gutter, Sidewalks & 6 Ramps 1 LS 58,115.00 58,115.00 8 Soil stabilization, 8" fly ash (15%) 5,858 SY 6.50 38,077.00 9 Asphalt Pavement 8" 4,568 Tons 37.45 171,071.60 10 6" Water Main 0 LF 0.00 0.00 11 Fire hydrant & valve assembly 3 LF 5,000.00 15,000.00 12 Corporation stop, 1 " 9 LF 570.00 5,130.00 13 Curb shutoff valve & box, 1" 9 Ea 1,100.00 9,900.00 14 Water Service Line, 1 " 300 Ea 33.00 9,900.00 15 Corporation stop, 1 W' 8 Ea 25.00 200.00 16 Wye, 11/2'' 4 Ea 1,300.00 5,200.00 17 Water Service Line, 1 W' 122 LF 35.50 4,331.00 18 Sanitary Sewer Pipeline 8" 1,261 LF 42.00 52,962.00 19 Sanitary Sewer Pipeline 4" 475 LF 33.00 15,675.00 20 Sewer tees, 8" x 4" 17 Ea 96.00 1,632.00 21 Connect to Existing Sewer, 8" 1 Ea 265.00 265.00 22 Connect to Existing Manhole, 8" 0 Ea 300.00 0.00 23 Standard Sanitary Sewer Manhole 4 Ea 8,500.00 34,000.00 24 Extra Depth Manhole 0 LF 300.00 0.00 25 Trench & Backfill, 6-8 0 LF 2.00 0.00 26 Trench & Backfill, 8-10 0 LF 3.00 0.00 27 Trench & Backfill, 1 0-1 2 0 LF 6.00 0.00 28 Trench & Backfill, 12-14 0 LF 8.00 0.00 29 Trench & Backfill, 14-16 0 LF 10.00 0.00 30 Silt fence 2,000 LF 1.50 3,000.00 31 Inlet protection 4 Ea 150.00 600.00 32 Temporary construction entrance 1 LS 2,750.00 2,750.00 33 Temporary seeding 1 LS 2,600.00 2,600.00 34 Construction Staking 1 LS 7,450.00 7,450.00 Subtotal $466,352.80 Contingency (5%) 23,317.64 Developer's Interest 30,000.00 City Expenses 12-6a01 (d) (5%) 23,317.64 Interest, Bonding & Issue (4%) 18,654.11 Total $561,642.19 4 Petition 4382 Grand Prairie Addition Phase II Cost of General Items Item# Item Quantity Unit Unit Cost Extension 1 Mobilization 1 LS 1,650.00 1,650.00 2 Clearing and Grubbing 1 LS 2,250.00 2,250.00 3 Street grading 5,858 SY 3.40 19,917.20 4 Backfill of Curb and Gutter 4,677 SY 1.00 4,677.00 Subtotal General Items $28,494.20 Contingency (5%) 1,424.71 Developer's Interest 3,750.00 City Expenses 12-6a01 (d) (5%) 1,424.71 Interest, Bonding & lssue 1,139.77 Total $36,233.39 Cost of Street and Storm lmprovements Item# Item Quantity Unit Unit Cost Extension 5 Connect to Existing Inlet 0 Ea 950.00 0.00 6 Storm Pipe, 18" RCP 0 LF 60.00 0.00 7 Curb and Gutter, Sidewalks & 6 Ramps ] LS 58,115.00 58,115.00 8 Soil stabilization, 8" fly ash (15%) 5,858 SY 6.50 38,077.00 9 Asphalt Pavement 8" 4,568 Tons 37.45 171,071.60 Subtotal Street & Storm $267,263.60 Contingency (5%) 13,363.18 Developer's Interest 7,500.00 City Expenses 12-6a01 (d) (5%) 13,363.18 Interest, Bonding & Issue 10,690.54 Total $312, 180.50 5 Petition 4382 Grand Prairie Addition Phase II Cost of Wat er Improvements Item# Item Quantity Unit Unit Cost Extension 10 6" Water Main LF 0.00 $0.00 11 Fire hydrant & valve assembly 3 LF 5,000.00 15,000.00 12 Corporation stop, 1" 9 LF 570.00 5,130.00 13 Curb shutoff valve & box, 1" 9 Ea 1,100.00 9,900.00 14 Water Service Line, 1 " 300 Ea 33.00 9,900.00 15 Corporation stop, 1 W' 8 Ea 25.00 200.00 16 Wye, 1V2" 4 Ea 1,300.00 5,200.00 17 Water Service Line, J lh" 122 LF 35.50 4,331.00 Subtotal Water Main $49,661.00 Contingency (5%) 2,483.05 Developer's Interest 7,500.00 City Expenses 12-6a01 (d) (5%) 2,483.05 Interest, Bonding & Issue 1,986.44 Total $64,113.54 6 Petition 4382 Grand Prairie Addition Phase JI Cost of Sarutary Sewer Improvements Item# Item Quantity Unit Unit Cost Extension 18 Sanitary Sewer Pipeline 8" 1,261 LF 42.00 $52,962.00 19 Sanitary Sewer Pipeline 4" 475 LF 33.00 $15,675.00 20 Sewertees, 8" x 4" 17 Ea 96.00 $1,632.00 21 Sewer wye, 8" x 4" Ea 265.00 $265.00 22 Connect to Existing Manhole, 8" Ea 300.00 $0.00 23 Standard Sarutary Sewer Manhole 4 Ea 8,500.00 $34,000.00 24 Extra Depth Manhole LF 300.00 $0.00 25 Trench & Backfill, 6-8 LF 2.00 $0.00 26 Trench & Backfill, 8-10 LF 3.00 $0.00 27 Trench & Backfill, 10-12 LF 6.00 $0.00 28 Trench & Backfill, 12-14 LF 8.00 $0.00 29 Trench & Backfill, 14-16 LF 10.00 $0.00 Subtotal Sarutary Sewer $104,534.00 Contingency (5%) 5,226.70 Developer's Interest 7,500.00 City Expenses 12-6a01 (d) (5%) 5,226.70 Interest, Bonding & Issue 4,181.36 Total $126,668.76 Cost of Miscellaneous Items Unit Item# Item Quantity Unit Cost Extension 30 Silt fence 2000 LF 1.50 3,000.00 31 Inlet protection 4 Ea 150.00 600.00 32 Temporary construction entrance LS 2,750.00 2,750.00 33 Temporary seeding LS 2,600.00 2,600.00 34 Construction Staking LS 7,450.00 $7,450.00 Subtotal Miscellaneous $16,400.00 Contingency (5%) 820.00 Developer's Interest 3,750.00 City Expenses 12-6a01 (d) (5%) 820.00 Interest, Bonding & Issue 656.00 Total $22,446.00 7 Grand Prairie Addition Block 2 Lot 7 Lot 8 Lot9 Lot JO Lot 11 Lot 12 Lot 13 Lotl4 Lot 15 Lot 16 Lot 17 Lot 37 Lot 38 Lot 39 Lot 40 Lot 41 Lot42 Lot 43 Petition 4382 Grand Prairie Addition Phase II Property Ownership Property Owner Cornerstone Development Group, LLC · Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Stephen E. Renich Trust Stephen E. Renich Trust Stephen E . Renich Trust Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC 8 Petition 4382 Grand Prairie Addition Phase II Distribution of Cost Block 2 Water SS Street Storm General Misc Total Lot 7 3,017.l l 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 8 3,017.l l 5,960.88 14,690.85 0.00 1,705.10 l ,056.28 $26,430.22 Lot 9 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 10 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 ~26,430.22 Lot 11 3,017.1] 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 12 3,0l7.ll 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 13 3,017.11 5,960.88 14,690.85 0.00 1,705.10 l,056.28 $26,430.22 Lot 14 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 15 3,017.l 1 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot16 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 17 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot37 Platted Open Space & D/U Easement Platted Open Space & D/U Easement Lot 38 3,017.1 1 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 39 3,017.l 1 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot40 3,017.11 5,960.88 14,690.85 0.00 l,705.10 1,056.28 $26,430.22 Lot41 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot42 3,017.1] 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Lot 43 3,017.11 5,960.88 14,690.85 0.00 1,705.10 1,056.28 $26,430.22 Total $51 ,290.83 $101,335.01 $249,744.40 $0.00 $28,986.71 $17,956.80 $449,313.75 tThe values in the table above reflects the 80% of the total value of the individual improvements divided by the number ofbuildable lots in the benefit district. 9 I I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS December 19, 2016 4:00 p.rn. The Study Session of the Board of Commissioners was called to order at 2:30 p.m. in Room 1078, City-County Building. Roll call was taken in anticipation of an executive session to be held during study session. Those present and comprising a quorum: Vice-Mayor Karl Ryan (presiding), Commissioners Jon Blanchard, Trent Davis, and Randall Hardy. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Aaron Martin, Oark, Mize & Linville. 16-0481 Moved by Commissioner Blanchard, seconded by Commissioner Hardy, to recess into executive session for 30 minutes to discuss with legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and reconvene at 3:10 p.m. Aye: (4). Nay: (0). Motion carried. · Mayor Kaye J. Crawford arrived at 2:49 p.m. The City Conunission recessed into executive session at 2:40 p.m. and reconvened at 3:10 p.m . No action was taken. The City Commission convened at 3:15 p.m. for Lower Smoky Hill \'•later Supply Access District Board Meeting and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roil call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye]. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Randall Hardy, and Karl Ryan. Also present: Jason Gage, City Manager; :tvtichael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Oerk. AWARDS AND PROCLAMATIONS (3.1) Mayor Crawford to recognize outgoing Fire Battalion Chief Calvin Kelsey. Mayor Crawford provided a brief history of Chief Kelsey's employment tenure and thanked him for his service. Mr. Kelsey expressed his appreciation for the City Manager trusting him as an interim fire chief. (3.2) Mayor Crawford to recognize outgoing Police Captain Ouis Trocheck. Mayor Crawford thanked .Mr. Trocheck for his years of service. Mr. Trocheck thanked the city of Salina for allowing him to serve the citizens of Salina. (3.3) Presentation.of Certificate of Commendation to Planet Fitness from the Salina Fire Department. Page I I I "' "' Chief Royse provided information on Planet Fitness, the emergency incident and presented a Certifkate of Commendation to Planet Fitness for the actions of their employees during a medical emergency at their facility a couple months ago. Will Jones, Planet Fitness General Manager, expressed appreciation for the award and stated Planet Fitness in Salina, Kansas would continue to operate with well trained employees aware of their environment. CmZENS FORUM Don Marrs, OMA Architects, provided information on Ordinance No. 16-10847 with an effective date of January 1, 2017 and asked what the effective date meant. He stated his company was hired as the architect for the KU School of Medicine, and explained the effective date of the ordinance could mean the project would fall under a different set of building codes. He continued to state that he had met with the city manager regarding the situation and thought it could be handled administratively. Michael Schrage, Deputy City Manager, stated upon approval of the building codes, staff had anticipated working with applicants beginning January 1, 2017 on the submittal of permits. A conversation ensued bern•een Mr. Marrs, Mr. Schrage and the Commission regarding the implementation of the building codes. Jason Gage, City Manager, explained the Development Review Team was a review process but was not an approval process, he continued to explain the effective date could be controlled by passage of a new ordinance. A conversation ensued between Mr. Marrs, Mr. Gage and the Commission pertaining to the effective date of the building codes conflicting with currently open building permits and newly filed permits. Commissioner Blanchard asked how long the discussions had been going on for the new building codes. Gary Hobbie, Director of Community & Development Services, explained the discussions had begun approximately two (2) years ago. Commissioner Blanchard asked i1 there were other projects that fell in this category. A conversation ensued between Mr. Gage, Mr. Schrage, Mr. Marrs and the Commission regarding the options available. Jim Brown, Building Official, explained how multi-phase projects were handled in relation to the building codes. Mayor Crawford stated staff could work with Mr. Marrs regarding the implementation of the building codes. Commissioner Ryan asked if a special meeting would have to take place to make the change. Mr. Gage sta~ed since the building code was approved via ordinance, the item would have to be approved by the City Commission. A conversation ensued between the Commission, Mr. Gage and Mr. Marrs on the implementation date. Mr. Gage asked if the Commission would like to 4iscuss the item now or under other business. Cormnissioner Ryan stated he thought the item would need to come back to the Commission. Commissioner Davis stated as long as there was awareness given to all others Page 2 I z c.. w ~ "' ~ 1 16-04CS2 who may have projects. The commission reached a consensus to bring the item back to the City Commission at a special meeting. PuBLJC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public hearing on the 2016 budget amendment. .Michelle Meyer, Director of Finance, explained the amendments. Mayor Crawford opened the public hearing. There being no further comments the public hearing was dosed. Moved by Commissioner Blanchard, seconded by Commissioner Davis, to approve the amended 2016 budget. Aye: (5). Nay: (0). Motion carried. CONSENT AGENDA (6.1) Approve the minutes of December 12, 2016. (6.2) Authorize replacement of two (2) Make-Up Air Units at the \A/ater Treatment Plant, Project No. 63141, in the amount of $20,105 and the Wastev .. •ater Treatment Plant (\'\'\'\'TP), Project No. 63139, in the amount of $26,170 to Comfort Heating & Air LLC, Salina, Kansas. (6.3) Authorize the replacement of two (2) roofs at the Wastewater Treabnent Plant (V\'\'\7TP); Gravity Belt Thickener Building No. 12 and Raw Sludge Pump Building No. 2, Project No. 63140, to Wray Roofing, Inc. of North Newton, Kansas, in the amount of $25,948 (Authorized Amount with 10% Construction Contingency, $28,550). (6.4) Award contract for the Sanitary Sewer System Rehabilitation, Project No. 63107 to Utility Solutions, LLC, in the amount of $865,451.64 (Authorized Amount with 10% Construction Contingency, $952,000). (6.5) Adopt Resolution No. 16-7424 authorizing the Mayor to enter into an interlocal cooperation agreement with Saline County, for Power8 (AS/400) computer usage and service, from January 1, 2017 through December 31, 2018. (6.6) Adopt Resolution No. 16-7422 authorizing the City Manager to execute an addendum to the Tria Health agreement with Tria Health for medication therapy management services for hvo (2) years. (6.7) Adopt Resolution No. 16-7426 approving the Tyler Technology /New World (SSMA) Software Support Maintenance Agreement. (6.8) Adopt Resolution No. 16-7425 concluding the 2016 evaluation of City Manager's performance and periodic review of City Manager's base salary. Corn.missioner Blanchard wanted to recognize Natalie Fischer, Director of Human Resources, and staff on their hard work on the medication therapy management services. Moved by Com.missioner Ryan, seconded by Commissioner Davis, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRA TJON Page 3 I .,, "' 16-0485 (7.1) Second readmg Ordinance No. 16-10871 adopting Salina Code Section 20-20 pertaining to criminal history record information. Mayor Crawford noted that Ordinance No. 16-10871 was passed on first reading on December 12, 2016 and since that time no comments have been received. Moved by Commissioner Hardy, seconded by Commissioner Blanchard, to adopt Ordinance No. 16-10871 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hardy, Ryan, Crawford. Nay: (0). Motion carried. (7.2) Resolution No. 16-7423 expressing support for a proposed Senior Housing Project using Low Income Housing Tax Credit program as offered by the Kansas Housing Resources Corporation for the structures located at 139 Penn Avenue in Salina, Kansas. Gary Hobbie, Director of Development Services, expiained the proposed project, Low Income Housing Tax Credit program and action options. Commissioner Blanchard asked for clarification on the architectural aesthetics of the buildings. Mr. Hobbie stated the building was constructed in phases and portions of the building would be demolished but keeping the old historic building. Mayor Crawford stated she was happy to see this project. Moved by Commissioner Ryan, seconded by Commissioner Davis, to adopt Resolution No. 16- 7423 expressing support for a proposed Senior Housing Project using Low Income Housing Tax Credit program as offered by the Kansas Housing Resources Corporation for the structures located at 139 Penn Avenue in SaJina, Kansas. Aye: (5). Nay: (0). Motion carried. (7.3) Resolution No. 16-7421 amending the 2017 Comprehensive Fee Schedule for the City of Salina, Kansas to include 2017 water and wastewater rates and Business Improvement District Fees. Michelle Meyer, Director of Finance, explained the rates. Commissioner Blanchard asked what the net effect was in the water meters. Jason Gage, City Manager, stated staff did expect more accurate readings but there could be an impact with the water conservation and excess water usage. Martha Tasker, Director of Utilities, explained there was improvement in the accuracy but also stated there was information coming from Siemens for staff to put into a report to provide to the Commission at a future study session. Commissioner Hardy asked how Jong the meters would last. Ms. Tasker stated approximately twenty (20) years. 16-0486 Moved by Commissioner Blanchard, seconded by Commissioner Hardy, to adopt Resolution No. 16-7421 amending the 2017 Comprehensive Fee Schedule for the City of Salina, Kansas to include 2017 water and wastewater rates and Business Improvement District Fees. Aye: (5). Nay: (0). Motion carried. (7.4) Approval of Petition No. 4385; Resolution No. 16-7394 providing for the advisability and authorization and Improvement District Development Agreement between the City of Salina and Cornerstone Development Group, LLC for a special improvement Page 4 z c. w district for water, sanitary sewer, street, and drainage improvements in Grand Prairie Addition, Phase II. Dan Stack, City Engineer, explained the petition received; advisability and authorization; agreement and action options. Commissioner Blanchard asked if the soil test and geotechnical report was part of this item. Mr. Stack stated yes, the contractor would be asked to perform a soil test as part of the projet. Moved by Commissioner Ryan, seconded by Commissioner Davis, to approve Petition No. 4385; adopt Resolution No. 16-7394 providing for the advisability and authorization and Improvement District Development Agreement between the City of Salina and Cornerstone Development Group, LLC for a special improvement district for water, sanitary sewer, street, and drainage improvements in Grand Prairie Addition, Phase II. Aye: (4). Nay: (1) Blanchard. Motion carried. (7.5) Response to District Court Ruling in Board of County Commissioners of Saline County, Kansas v. City of Salina, Saline County District Court Case No. 2014-CV- 0391 (annexation case). Greg Bengtson, City Attorney, explained the ruling and action options. Commissioner Blanchard asked what a motion to appeal would provide the opportunity for. Mr. Bengtson stated the appeal would enable the court to address the ordinance in question and if either party would like to express an alternative agreement or outcome that opportunity would exist. Moved by Commissioner Blanchard, seconded by Commissioner Hardy, to direct the City's legal counsel to appeal the ruling. Aye: (5). Nay: (0). Motion carried. (i.6) Selection of a person to fill the soon to be vacated City Commission Seat. Jason Gage, City Manager, explained the statutory limitations and the process for selection. Commissioner Hardy recused himself from the item. Mayor Crawford provided her thoughts on the selection of a new commissioner. Commissioner Ryan provided his thoughts regarding the partisan aspect and on the past election. Greg Bengtson, City Attorney, requested an executive session with the commission. 16-0489 Moved by Commissioner Blanchard, seconded by Commissioner Ryan, to recess into executive session for 5 minutes to discuss with legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and reconvene at 5:15 p.m. Aye: (4). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:10 p.m. and reconvened at 5:15p.m. Mr. Bengtson stated no names of candidates were discussed in the executive session. Page 5 I I 16-0490 Moved by Commissioner Ryan, seconded by Commissioner Crawford, to appoint Joe Hay Jr. to fill the remaining city commission term of Randall Hardy. 16-0491 16-0492 Mayor Crawford provided her thoughts on Joe Hay Jr. and his recent running for City Commission. Commissioner Ryan provided his thoughts on Joe Hay Jr and the support from the community. Commissioner Blanchard thanked the fourteen (14) individuals that submitted their applications and provided his thoughts on the selection for the City Commission seat. Mayor Crawford stated all individuals who submitted an application were qualified and provided her thoughts. Aye: (2). Nay: (2) Blanchard, Davis. Motion failed. Corrunissioner Blanchard read the list of various characteristics and traits listed on the agenda item that were discussed during the study session and continued to provide his thoughts on the selection for the City Commission seat. Commissioner Davis provided his thoughts on the experience of the interested parties and the knowledge of an individual of city business. A conversation ensued betv»een the commissioners regarding the individuals that submitted and the experience of the interested parties. Moved by Commissioner Davis, seconded by Commissioner Blanchard, to appoint Melissa Rose Hodges to fill the remaining city commission term of Randall Hardy. Aye: (3). Nay: (1) Ryan. Motion carried. Commissioner Ryan provided his thoughts on the selection and thanked all individuals for submitting applications. Commissioner Hardy returned. DEVELOPMENT BUSINESS None. OrnER BusrNESS Commissioner Hardy stated this was his last regularly scheduled commission meeting and provided his thoughts on his term as a City Commissioner. Commissioner Blanchard provided his thoughts on Commissioner Hardy's term and future success as Senator. Commissioner Davis provided his thoughts and thanked Commissioner Hardy for his help when he first came on as city commissioner. (9.1) Request for executive session (legal). Moved by Commissioner Davis, seconded by Commissioner Hardy, to recess into executive session for 30 minutes to discuss with legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and reconvene at 6:10 p.m. Aye: (5). Nay: (0). Motion carried. Page 6 I 16-0493 ill z 0.. w Cl ~ "' ~ 16-04!)4 i (,) The City Commission recessed into executive session at 5:35 p.m. and reconvened at 6:10 p.m. No action was taken. Moved by Commissioner Ryan, seconded by Commissioner Hardy, to extend the current executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 6:10 p.m. and reconvened at 6:40 p.m. No action was taken. Moved by Commissioner Ryan, seconded by Commissioner Hardy, to extend the current executive session for an additional 130 minutes. Aye: (5). Nay: (0). Motion carried. The City Com.mission recessed into executive session at 6:40 p.m . and reconvened at 8:50 p.m. No action was taken. ADJOURi~MENT 16--0495 Moved by Commissioner Hardy, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:50 p.m. [SEAL) ATTEST: -~lO~ Shandi Wicks, CMC, City Clerk Page 7 m ~ z <.. w i " '? i j I I lruousneo in me ~aima Jouma1 on vc:.._1;..,-nvJ1;.~ '-V' . ~v •VJ RESOLUTION N1JMBER 16-739-'. RESOLUTION SEITING FORTH FlNDINGS AND DETERML":A.TIONS OF THE OVERNING BOD\' OF THE CITY OF SALL~A, KANSAS ON THE ADVISABILITY F AN'D AUTHORIZING THE CONSTRUCTION OF CERTAIN IMPROVEMENTS URSUANT TO KS.A. 12-6aOJ et seq. · WHEREAS, a petition was filed with the City Clerk for the Ciry of Salina, Kansas (the City") on December 8, 2016, proposing certain improvements pursuant to K.S.A. I 2-6a0 I e1 eq. (the "Petition"); and WHEREAS, the Petition sets forth: (a) the general nature of the proposed improvements; b) ttie estimated or probable cosl of the proposed impro\•ements; (c) the extent of the proposed mprovement districr to be assessed for the cosl of the proposed improvements; (d) the proposed ethod of assessment; (e) the proposed apportionment of the cost between the improvement district d the City at large; and (f) a requeSl that such improvements be made without notice and hearing required by K.S.A . 12-6a04(a); and WHEREAS, the owners of record of 82% the property liable to be assessed under the etition have signed the Petition; and WHEREAS, no signat\Jres have been withdrawn from the petition before the Governing ody began consideration of the Petition; and WHEREAS: K.S.A. I 2-6a04 provides that the Governing Body may authorize and order ublic improvements withou1 notice end hearing after a sufficient petition has been filed; and WHEREAS, the go,•erning body has reviewed and considered the Preliminary ngineering Estimate and Feasibility Report prepared by the City Engineer and agrees with the onclusions set forth therein . NOW THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE JTY OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Governing Body hereby finds that the Petition is sufficient, and nher finds and detennines that it is necessary and advisable to make the following improvements: (a) The nature of the improvements are as follows : The curb, guner, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"). The installation of approximately 56 lineal feet of stonn sewer pipe, inle1s, and all appurtenances thereto (the "Drainage lmpro\'ements"). The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, rinings, service connections for water lines and all appunenances thereto (the :•water System lmprovemems"). --111111111111ni111m1111m111rn11 ·1111nm11111r1111nmn1111111111111111r .. ~·'·· REBECCA SEEMAN ,.:'~:.~·...!:•-r,;>.REGISTER OF DEEDS SALINE COUNTY KANSAS 11l c."'·'·I•"·•• .\;;;.·.);JBook:1323 Page: 464-466 • .. :.;·;....-;~~./Receipt #: 108230 t.. I Recording Fee: $0.00 '··---Pages Recorded: 3 C.t" Date Recorded: 12/30/2016 9:56:26 AM z ... "' I I -.- (b) Book: 1323 Page: 4&5 The installation of approximately I, 165 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (I.he "Sanitary Sewer Improvements"). (collectively, the "Improvements"). The estimated cost of the Improvements is: Five Hundred Sixty-One Thousand Six Hundred Forty-Two Dollars and Nineteen Cents ($56 J ,642.19). (c) The boundaries of the improvement district to be assessed are: Lots 7 through 17 and Lots 38 through 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas. (collectively, the "Improvement District"). (d) The apponionment ofcost between the Improvement District and the city at large is: (e) Eighty percent (80%) of the total cost of improvements shall be assessed to the Jmprovement District, twenty percent (20%) shall be paid by the developer(s) prior to the City commencing cons1ruction of the Improvements and no ponion of costs shall be paid by the City at Large. The method of assessment against propeny within the Improvement District shall be equally per lot against all lots within the Improvement District. Section 2. The Governing Body hereby declares that the improvements described in his Resolution are necessary, and aulhoriz.es them to be made in accordance with the Petition and he findings set forth in this Resolution, and further authorizes 1he levying of assessments and the suance of bonds therefore (upon the satisfaction of cenain conditions set forth in the De\'elopment greement described in Section 4 of this Resolution), all in accordance with K.S.A. 12-6a01 er seq .. Section 3. The City expects to make capital expenditures from and after the date of is Resolution in connection with I.he Improvements described herein, and intends to reimburse tself for such expenditures with the proceeds of one or more series of general obligation bonds and emporary notes of the City in the maximum principal amoun1 of$561,642.19. Section 4. That certain Development Agreement between Cornerstone evelopment Group, LLC and the City is hereby approved in subsLantially 1he form presented 10 he governing body on this date. The Mayor is authorized to execute the Developmen1 grument on behalf of the City, and the Mayor, Clerk and other City staff are authorized to take uch further actions as necessary to Ca!l)' out the transactions contemplated thereby. Section 5. The City Clerk shall file a certified copy of this Resolution with the egister of Deeds of Saline County, Kansas. 2 I I ~k: 1323 Page: 4bE. -· Section 6. This Resolution shall take effect after its passage and publication once in e official city newspaper. Vl ~ ~ ~ • . j " .. i i SEAL) "' ADOPTED A.ND PASSED this 19t1idayofDecember, 2016. 3 I hereby cenify that the above and foregoing is a true and correct copy of Resolution No . 16-7394 that was adopted by the Governing Body of the City of Salina at their regular meeting on December 19, 2016 . Allison Strait Adminis1r.1tiYc Assistanl Ill Publisher's Affidavit I, Christy Fink , being duly sworn . declare that I am a I cgal Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the n.1ails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Resolution 1~7394 Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of December 26 Subscribed and sworn to before me, this G2 7 '!:b- day of ~ A.D.20 L!e_ Printer's Fee S439.50 I . • The COit, 911111, .. ~ml~ . . . b approlinaly IPIO . brafteetd~ . -lkiwt(Oie"Slrlel ~i; ~,. The i'llldZioo of &WroliT.a:efy56 ilea1 fe£l d Sla:ll -~.Pets, in!ll~ lhetl:D(lhe ~ ~·1. The~lll ~Ohzl feel d sil-ilch .a:ei 'mai\ln~ ~tli9i. smice CICm<1ion5 t:>r llilel hund al ~flerco (!he 'Y/.l!e!Symi ~'I. (d)'The~ d COSI bElween 1lie ~Ois:ricl . llll lie ctr 11 la!De is: ADOPltD m PJ.SSEOtis 19May of Oece:me!, 2()1$. (SEA!) . M KIJ! J. t:Gwlord, Mi,tr "BICJl'fiia(801o) -· WSliendiWds, - • dlbeml!iORd~· CltC,t.qOefl ~sllal be~)'.llhe L11p1\11'818\1 Oislli:i. lllettJPum (20%) st.zJ be peii bf lhll deftloptrls) jllilr ID ~ lbeety~ ~Gib ~tndno Jl0!1iorl Ill CCSIS sh2I be pzif tJrtle Cly II . ·1z9e. (e} The ine:hod Df ISSessmenl aoa"1 propenyr.bh lhe . lr.n-.-Ol5lzid nu DEVELOPMENT AGREEMENT Tbis Development Agreement (the "Agreement") dated as of December 19, 2016, by and between the City of Salin.a, Kansas (the "City''), and Cornerstone Development Group, L.LC., a Kansas limited liability company (the "Developer"). WHEREAS, on December 19, 2016, the Developer filed with the City Clerk Petition No. 4385 (the "Petition''), pursuant to KS.A. 12·6a01 et seq. (the "Act"); and WHEREAS, the Petition requests that the City create the Improvement District, construct the Improvements, assess the ·coS'tE thereof against the Improvement District (all as defined in the Petition), and issue the City's general obligation bonds to finance the costs of the Improvements; and WHEREAS~ the City has prepared the PreHminaty Enginreri.ng and Feasibility Report (the "Feuibility Report") related to the hnprovements; and WHEREAS, on December 19, 2016, the City's adopted Resolution No. 16·7394, which created the Improvement District and authorized the Improvements to be constructed in accordance with the terms of 1he Petition and upon satisfaction of certain conditions set forth in this Agreement (the "AdviBa.bilfty Resolution"); and WHEREAS, as a condition to the City constructing the Improvements, the Developer must furnish funding equal to 200/0 of the City's costs of engineering design, construction~ inspectio~ temporary note interest, and administration (the .. Project Cort''), which shall be used by the City to reduce the amount of Project Cost covered by special assessment bond financing. NOW, THEREFORE, in consideration of the foregoin& and of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as follows: 1. Developer'E Financial Contribution. 1.1. Amount and Timing of Contrlbntion. Within 10 days of execution of this Agreement, the Developer shall provide the City with funding in the amount oft 112,328 .44, which equals 200Ai of the estimated Project Cost. 1.2. City't: Use of Funds. The City shall apply the funds paid by Developer pursuant to Paragraph 1.1 toward 1he Project Cost, as a prepayment of special assessments to be levied against property in the Improvement District. 1.3. Addition.al Developer Contribution for my ExceH Project Cort. If the total actual Project Cost exceeds $561,642.19, then the Developer shall pay to the City the amount of any such excess to the City within 20 days of receipt of an invoice from the City for such excess Project Cost. The City shall apply such amount solely to payment of Project Costs so that the amount to be assessed to property in the Improvement District does not exceed the amount set forth in the Petition and Resolution creating the Improvement District. 1.4. True-Up of De\'eloper Contribution Based on Final Project Cost. [f the total actual Project Cost is less than $561,642.19 (as determined by the Ordinance levying assessments against the Improvement District), then the City shall refund any of the Developer contnl>ution paid pursuant to Paragraph 1.1 above in excess of an amount that is equal to 20% of such total actual Project Cost, with such amounts refunded to the Developer within 20 days of the City's adoption of the OrdiI131;1ce levying the assessments against the Improvement District. l. Constructing the Improvemenu. The City shall design, construct and install the Improvements, at its own expense, subject to the Developer's paymerits as provided in Paragraph 1.1 above. The City shell solicit sealed bids end award a contract for construction of the Improvements, and thereafter complete the Improvements with reasonable diligence. The design, construction and installation of the hnprovements shall be in accordance with all applicable laws including the City Code. 3. Developer's Contribution of Artistic Element. Prior to the City's completion of the 1mprovements~ the De\•eloper shall furnish and install an artistic element (the "Artistic Element") within the Improvement District. The Artistic Element shall be furnished and installed at the Developer's sole cost and expense, and in a location subject to public view within the Improvement District. The Developer covenants and agrees to be responsible, at its sole cost and expense, for repairing and maintaining the Artistic Element, and shall talce such actions as may be required to keep the Artistic Element in good order, condition, and repair. 4. Waiver. THE DEVELOPER HEREBY AGREES TO WAIVE ANY RIGHTS THAT IT MAY HAVE PURSUANT TO KANSAS STATUTES, THE KANSAS CONSTITUTION, THE UNITED STATES CONSTITlJTION, OR AS OTHERWISE PROVIDED BY LA'\\' TO OBJECT TO ~W SPECIAL ASSESSl\IENTS REQUESTED IN THE PETITION AND IMPOSED PL"RSUANT TO THE ACT. The Developer acknowledges and agrees that this waiver is freely given and with full knowledge of the extent of all statutory, constitutional or other legal rights being waived thereby, and is given in consideration of the City forming the Improvement District and assisting in providing for the financing and construction of the Improvements. 5. Qty Emenses; Deposit. The Developer shall be responsible for the payment of all non-City employee legal, financial and planning consultants for direct out-of.pocket expenses and other reasonable costs resulting from services rendered to the City to review, evaluate, process and consider the Petition and this Agreement (the ''City Expenses''). Before this Agreement becomes effecdve, the Developer shall deposit with the Ci~· the sum of $2,SOO.OO to pay the City Expenses. If such deposit is insufficient to pay all City Expenses, the Developer shall pay all additional City Expenses within 10 days after presentation of an invoice from the City. If any funds are unused after 120 days from the date the resolution authorizing the Improvement District is approved, then the City shall return such unused funds to the Developer. 2 6. Default and Tennina.tion. The Developer shall be in defuult of this Agreement if the Developer fails to comply with any obligations set forth in this Agreement This Agreement may be terminated at 1he option of the City if writtell notice of event of default has been delivered to the Developer by the City and the Developer has not cured such defiwlt or is not actively pursuing such cure within thirty (30) days after such notice is delivered. 7. Notices. All notices required or permitted to be given pursuant to this .Agreement shall be in writing and delivered personally or sent by registered or certified mail, return receipt requested, or by generally recognized, prepaid, commercial courier or overnight air courier service. Notice shall be considered given when received on the date appearing on the return receipt, but if the receipt is not returned within five (5) days, then three (3) days after mailed, if sent by registered or certified mail or commercial courier service; or the next business day, if sent by overnight air courier service. Notices shall be addressed as appears below for eacl1 party, provided that if any party gives notice of a change of name or addr~s, notices to the giver of that notice s.ball thereafter be given as demanded in that notice. CITY: DEVELOPER: 8. General Pro\'idom:. City Clerk Attn: J a.son A. Gage, City Manager P.O. Box 736 Salin~ KS 67402-0736 Cornerstone Development Group, L.L.C. Attn: William E. Sheppard, President P.O. Box 1481 Salina, KS 67402-1481 A. No waiver of any provision of this Agreement will be deemed or constitute a waiver of any other provision, nor will it be deemed or constitute a continuing waiver llilless expressly provided for by a written amendment to this Agreement signed by both the City and the Developer; nor will the waiver of any defect under this Agreement be deemed a waiver of any subsequent default or defaults of the same type. The City's failure to exercise any right under this Agreement, will not constitute the approval of any wrongful act by the Developer or the acceptance of any Improvements. B. The parties to this Agreement may amend or modify this Agreement only by written instrument duly executed by the parties hereto. C. No person or entity who or which is not a party to this Agreement will have any right of action under this Agreement. 3 D. This Agreement constitutes the entire Agreement between the parties, and no statements, promises, or induoonents that are not contained in this Agreement will be binding on the parties. This Agreement may not be assigned to any other parties without the prior written consent of the City. E. If any part, term, or provision ohhis Agreement is held by a court to be illegal or otherwise unenforceable, such illegality or unenforceability will not affect the validity of any other part, term, or provision, and the rights of the parties will be construed as of the part, term, or provision was never part of this Agreement F. The City may file a copy of this Agreement in the office of the Register of Deeds for Saline County, Kansas. G. Nothing contained in this Agreement constitutes a waiver of the City's sovereign immunity under any applicable state law. H. This Agreement shall be construed in accordance with and governed by the laws of the State of Kansas. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLA.N'K] 4 ty,™ WITNESS 'WHEREOF, the parties hereunto have executed this Agreement this A't!•day of ~b2r ,2016. (Seal) ATTEST: ~Mdf ll)UJU STATE OF KANSAS COUN1Y OF SAL1NE ) ) SS. ) CITY OF SALINA, KANSAS On ~_!S_, 2016, before me, the undersigned, a Notary .Public in and for said state, personally ~ Kaye J. Crawford and Shandi Wicks, proved to me on the basis of satisfuctoiy evidence to be the persons whose names are subscribed to the within instrument as Mayor and City Clerk, respectively, of the CITY OF SALINA, KANSAS, and acknowledged to me that they executed the same in their authoriT.Cd capacities, and thitt by their signatures on the instrument the entity upon behalf of which the pcnons acted, executed the in.Gtrammt. · WITNESS my hand and official seal. NOtll)1PUbliC PrintedName: A-l\\50() $WQ.\\- My commission expires: 10-2..S -~.O ____ _ D IN ~S 'WHEREOF, the parties hereunto have executed this Agreement this ,;{) day of £4 016. CORNERSTONE DEVELOPME~"T GROUP, L.L.C. STATE OF KANSAS COUNIY OF SALINE ) ) SS. ) By: On AC.... !3!_, 2016, betOJ:e me, the undersigned, a Nowy Public in and fur said state, personally appe.ared William E. Sheppard, proved 10 me on the basis of satisfuctory evidence 10 be the persons '\'those names are subscribed to the within instrument as President, of Cornentone Development Groo.p, LL.C., a Kamu limited. liability company, and acknowledged 10 me that he/she executed the same in bis/her authorized capacity, and that by he/her signature on the instrument the entity upon behalf of which the person acted, executed the instrument. WITN"ESS my band and official seal. My commission expires: Notary Public /) / ,4 l. u. rh Z /J o I I Printed Name: --·--· -····-·---·~-- ~-· .. --., ·-.. . ...... ~. : .. \ j •... "-~-.-.. ·~· \ . '· ..... ... . 6 File No. 63156 Final Engineering Report Petition No. 4385 Grand Prairie Addition Phase II Utility, Street, and Drainage Improvements March 2018 Wayne E. Nelson, P.E. Petition 4382 Grand Prairie Addition Phase II SCOPE OF WORK The curb, gutter, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"). The installation of approximately 56 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 1, 165 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). BENEFIT DISTRICT Grand Prairie Addition Lots 7 through 17 and Lots 38 through 43 , Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas. (the "Improvement District"). ADOPTION OF ASSESSMENT The assessment with accrued interest to be levied as a special assessment tax upon the property included with the benefit district concurrent with the general property tax and shall be payable in fifteen equal annual installments. Each parcel in the Improvement District shall be assessed equally per lot for costs of the various Improvements benefitting such lot as described under the heading Apportionment of Cost below. APPORTIONMENT OF COST Eighty percent (80%) of the total cost of improvements shall be assessed to the Improvement District, twenty percent (20%) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. 3 Petition 4382 Grand Prairie Addition Phase II This Page Intentionally Left Blank 4 Petition 4382 Grand Prairie Addition Phase II Cost of Improvements Item # Item Quantity Unit Unit Cost Extension 1 Mobilization 1 LS 10,240.90 10,240.90 2 Embankment 2,390 LS 3.30 7,887.00 3 Embankment Contractor furnished 2,488 SY 14.75 36,698.00 4 Clearing & Grubbing 1 SY 2,100.00 2,100.00 5 Geotechnical Report LS 4,500.00 4,500.00 6 Asphalt Pavement, 8" 1,939 Ton 63.05 122,253.95 7 Subgrade modification 6,290 SY 4.50 28,305.00 8 Curb & gutter 2,936 LF 15.15 44,480.40 9 Sidewalk ( 4 ')( 4 ") 51 SY 41.50 2,116.50 10 Sidewalk (4')(6") 19 SY 51.05 969.95 11 Sidewalk ramps, Type I 4 Ea 682.50 2,730.00 12 Sidewalk ramp, 8' 2 Ea 787.50 1,575 .00 13 Brick stamped red concrete, 6" 79 SY 124.75 9,855 .25 14 Water Pipeline, 6" 51 LF 38.10 1,924.05 15 Fire hydrant & valve assembly 3 LF 4,054.05 12,162.15 16 Long service, 1 Yi " 5 LF 1,003.80 5,019.00 17 Long service, l " 1 Ea 825.30 825.30 18 Short service, l " 6 Ea 401.10 2,406.60 19 Sewer Pipeline, 8" 1,023 LF 35.70 36,521.10 20 Sewer service pipeline, 4" 830 LF 27.30 22,645.35 21 Sewer tees, 8" x 4" 20 Ea 159.60 3,192.00 22 Connect to Existing Sewer, 8" 1 Ea 420.00 420.00 23 Connect to Existing Manhole 2 Ea 1,260.00 2,520.00 24 Standard Sanitary Sewer Manhole 3 Ea 4,095.00 12,285.00 25 Extra Depth Manhole 18 LF 308.70 5,556.60 26 Construction staking LS 9,219.00 9,219.00 27 Seeding LS 3,538.50 3,538.50 28 Temporary traffic control 1 LS 351.80 351.80 29 Temporary fertilizer, seed and mulch 0 Ac 3,013 .50 0.00 30 Temporary slope barrier (silt fence) 697 LF 3.15 2,195.55 31 Temporary Slope Barrier (Biodegradable Log) 58 LF 6.30 365.40 32 Temporary inlet sediment barrier (gravel bags) 0 Lb 2.90 0.00 33 Temporary construction entrance 60 Ton 31.50 1,890.00 34 Erosion Control (Class 1) (Type C) 3,560 SY 1.10 3,915.56 co 1.1 Storm Inlet Modification 1 LS 1,743.90 1,743.90 L.D. Liquidated Damages LS -17,100.00 -17,100.00 Subtotal $385,308.81 City Expenses 12-6a01 (d) (5%) 19,265.44 Interest, Bonding & Issue 17,734.60 Total $422,308.85 5 Petition 4382 Grand Prairie Addition Phase II Cost of General Items Item# Item Quantity 1 Mobilization 1 2 Embankment 2,390 3 Embankment Contractor furnished 2,488 4 Clearing & Grubbing 1 Subtotal General Items City Expenses 12-6a01 (d)(5%) Interest, Bonding & Issue Total Cost of Street and Storm Improvements Item# Item Quantity 5 Geotechnical Report 1 6 Asphalt Pavement, 811 1,939 7 Subgrade modification 6,290 8 Curb & gutter 2,936 9 Sidewalk (4')(411) 51 10 Sidewalk (41)(611) 19 11 Sidewalk ramps, Type I 4 12 Sidewalk ramp, 8' 2 13 Brick stamped red concrete, 611 79 Subtotal Street & Storm City Expenses 12-6a01 (d) (5%) Interest, Bonding & Issue Total Cost of Water Improvements Item# Item 14 Water Pipeline, 6" 15 Fire hydrant & valve assembly 16 Long service, 1Yi11 1 7 Long service, 111 18 Short service, 1" Subtotal Water Main City Expenses 12-6a01 (d) (5%) Interest, Bonding & Issue Total Quantity 50.5 3 5 1 6 6 Unit Unit Cost Extension LS 10,240.90 10,240.90 LS 3.30 7,887.00 SY 14.75 36,698.00 SY 2,100.00 2,100.00 $56,925.90 2,846.30 2,620.13 $62,392.32 Unit Unit Cost Extension LS 4,500.00 4,500.00 Ton 63 .05 122,253.95 SY 4.50 28,305.00 LF 15.15 44,480.40 SY 41.50 2,116.50 SY 51 .05 969.95 Ea 682.50 2,730.00 Ea 787.50 1,575.00 SY 124.75 9,855.25 $216,786.05 10,839.30 9,978.01 $237,603 .36 Unit Unit Cost Extension LF 38.10 $1 ,924.05 LF 4,054.05 12,162.15 LF 1,003.80 5,019.00 Ea 825.30 825.30 Ea 401.10 2,406.60 $22,337.10 1,116.86 1,028.11 $24,482.06 Petition 4382 Grand Prairie Addition Phase II Cost of Sanitary Sewer Improvements Item# Item Quantity Unit Unit Cost Extension 19 Sewer Pipeline, 8" 1,023 LF 35.70 $36,521.10 20 Sewer service pipeline, 4" 829.5 LF 27.30 $22,645.35 21 Sewer tees, 8" x 4" 20 Ea 159.60 $3,192.00 22 Connect to Existing Sewer, 8" Ea 420.00 $420.00 23 Connect to Existing Manhole 2 Ea 1,260.00 $2,520.00 24 Standard Sanitary Sewer Manhole 3 Ea 4,095.00 $12,285.00 25 Extra Depth Manhole 18 LF 308.70 $5,556.60 Subtotal Sanitary Sewer $83,140.05 City Expenses 12-6a01 (d) (5%) 4,157.00 Interest, Bonding & Issue 3,826.69 Total $91 ,123.74 Cost of Miscellaneous Items Item# Item Quantit~ Unit Unit Cost Extension 26 Construction staking 1 LS 9,219.00 9,219.00 27 Seeding 1 LS 3,538.50 3,538.50 28 Temporary traffic control 1 LS 351.80 351.80 29 Temporary fertilizer, seed and mulch 0 Ac 3,013 .50 0.00 30 Temporary slope barrier (silt fence) 697 LF 3.15 2,195.55 31 Temporary Slope Barrier (Biodegradable Log) 58 LF 6.30 365.40 32 Temporary inlet sediment barrier (gravel bags) 0 Lb 2.90 0.00 33 Temporary construction entrance 60 Ton 31.50 1,890.00 34 Erosion Control (Class 1) (Type C) 3559.6 SY 1.IO 3,915.56 CO I.I Storm Inlet Modification I LS I,743.90 I,743.90 L.D. Liguidated Dama~es LS -17 ,100.00 -17,I 00.00 Subtotal Miscellaneous $6,I I9.7I City Expenses I2-6aOI (d)(5%) 305.99 Interest, Bonding & Issue 28I .67 Total $6,707.37 7 Grand Prairie Addition Block 2 Lot? Lot 8 Lot9 Lot 10 Lot 11 Lot 12 Lot13 Lot 14 Lot 15 Lot 16 Lot 17 Lot 37 Lot38 Lot39 Lot40 Lot 41 Lot 42 Lot43 Petition 4382 Grand Prairie Addition Phase II Property Ownership Property Owner Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Stephen E. Renich Trust Stephen E. Renich Trust Stephen E. Renich Trust Shawn L. and Kristi L. Carlson Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC Jeremy B. and Jessica Ryan James D. Markle Revocable Inter Vivos Trust Cornerstone Development Group, LLC Cornerstone Development Group, LLC Cornerstone Development Group, LLC 8 Petition 4382 Grand Prairie Addition Phase II Distribution of Cost Block 2 Water SS Street General Misc Total Lot 7 1,152.10 4,288.18 11,181.33 2,936.11 3 15.64 $19,873.36 Lot 8 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 9 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 10 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 11 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 12 1,152.10 4,288.18 11,181.33 2,936.11 315.64 $19,873.36 Lot 13 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 14 1,152.10 4,288.18 11,181.33 2,936.11 315.64 $19,873.36 Lot 15 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot 16 1,152.10 4,288.18 11,181.33 2,936.11 315.64 $19,873.36 Lot 17 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot37 Platted Open Space & D/U Easement Platted Open Space & D/U Easement Lot 38 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot39 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot40 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot41 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Lot42 1,152.10 4,288.18 11,181.33 2,936.11 315.64 $19,873.36 Lot 43 1,152.10 4,288.18 11 ,181.33 2,936.11 315.64 $19,873.36 Total $19,585.65 $72,898.99 $190,082.69 $49,913.86 $5,365.89 $337,847.08 tThe values in the table above reflects the 80% of the total value of the individual improvements di vided by the number ofbuildable Jots in the benefit district. 9 PETITION 4380 TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: We, the undersigned, owners of record of property located within the City of Salina, Kansas (the "City") do hereby respectively request that the Governing Body of the City create and designate an improvement district for the purpose of making certain improvements in the manner provided by K.S.A. 12-6a01, et seq. 1. The general nature of the proposed improvements are as follows: The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements"). The installation of approximately 345 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 2,090 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 2,171 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). 2. The estimated or probable cost of the Improvements is: Nine Hundred Fifty-Six Thousand Seventy-Two Dollars and Twenty-Five Cents ($956,072.25). 3. The extent of the proposed improvement district to be assessed is: Lots 5 through 26, Block 1; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. (the u1mprovement District"). 4. The proposed method of assessment shall be: Each lot in the Improvement District shall be assessed equally per lot for costs of the various Improvements. S. The proposed apportionment of cost between the Improvement District and the City at Large is: Seventy-five percent (75%) of the total cost of improvements shall be assessed to the Improvement District, twenty.five percent (25%) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. The signers of this Petition hereby request that the Improvements be made without notice and hearing as required by K.S.A. 12-6a04(a). NAMES MAY NOT BE WITHDRAWN FROM THE PETITION BY THE SIGNERS THEREOF AFfER THE GOVERNING BODY COMMENCES CONSIDERATION OF THE PETITION OR LATER THAN Kelly LEGAL DESCRIPTION OF PROPERTY OWNED WITHIN THE PROPOSED IMPROVEMENT DISTRICT: Lots 5 through 26, Block 1; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. STATE OF KANSAS ) ) SALINE COUNTY ) I, the undersigned Notary Public, hereby certify that the signature appearing above is genuine and that this document was signed before me on this -~f'J+i., day of ~ vl'I€., , 2016. A. DAN STACK ~ Notary Public -State of Kansas My Appl. Expires December U, 20JCf My appointment expires: Notary Public 3 Preliminary Engineering Report Petition No. 4380 River Trail 2°d Addition Utility, Street, and Drainage Improvements File No. 63153 June 2016 Petition 4380 River Trail 2nd Addition to the City of Salina SCOPE OF WORK The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements''). The installation of approximately 345 lineal feet of stonn sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 2,090 Hneal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 2, 171 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). BENEFIT DISTRICT River Trail 2nd Addition Lots 5 through 26, Block 1; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. (the "Improvement District"). ADOPTION OF ASSESSMENT The assessment with accrued interest to be levied as a special assessment tax upon the property included with the benefit district concurrent with the general property tax and shall be payable in fifteen equal annual installments. Each parcel in the Improvement District shall be assessed equally per Jot for costs of the various Improvements benefitting such lot as described under the heading Apportionment of Cost below. APPORTIONMENT OF COST Seventy-five percent (75%) of the total cost ofin1provements shall be assessed to the Improvement District, twenty-five percent (25%) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. Petition 4380 River Trail 2nd Addition to the City of Salina Cost of Improvements Item# Item Quantity Unit Unit Cost Extension l Clearing and Grubbing ] LS 3,000.00 3,000.00 2 Common Excavation 4,400 CY 6.00 26,400.00 3 Embankment 2,700 CY 6.00 16,200.00 4 Erosion Control LS 5,000.00 5,000.00 5 Seeding LS 2,000.00 2,000.00 6 Temporary Construction Entrance Ton 55.00 55.00 7 Area Inlet Ea 5,500.00 5,500.00 8 Curb Inlet 4 Ea 5,500.00 22,000.00 9 Stonn Pipe, 18" RCP 70 LF 40.00 2,800.00 10 Stonn Pipe, 24" RCP 133 LF 45.00 5,985.00 11 Stonn Pipe, 42"x27" RCHEP 105 LF 100.00 10,500.00 12 Stonn Pipe, 30"xl 9" RCHEP 37 LF 60.00 2,220.00 13 End Section, 18" RC l Ea 250.00 250.00 14 End Section, 24" RC 2 Ea 300.00 600.00 15 End Section, 42"x27" RC 2 Ea 600.00 1,200.00 16 Curb and Gutter 4,565 LF 17.50 79,887.50 17 Asphalt Pavement 8" 7,330 SY 35 .00 256,550.00 18 Subgrade Modification 6" 7,600 SY 2.75 20,900.00 19 Sidewalk Ramp Type 1 8 Ea 600.00 4,800.00 20 6" Water Main 2,090 LF 25.00 52,250.00 21 1 W' Water Service Line 1,189 LF 30.00 35,670.00 22 l" Water Service Line 1,230 LF 20.00 24,600.00 23 1 Yi" Water Service Assembly 9 Ea 750.00 6,750.00 24 I" Water Service Assembly 23 Ea 500.00 11 ,500.00 25 Curb Shutoff Valve and Box 41 Ea 350.00 14,350.00 26 Fire Hydrant and Valve Assembly 4 Ea 4,500.00 18,000.00 27 Fittings l LS 3,500.00 3,500.00 28 Sanitary Sewer Pipeline 8" · 2,171 LF 45.00 97,695.00 29 4' Standard Sanitary Manhole Type 1 11 Ea 3,800.00 41,800.00 30 Sanitary Sewer 4" 1,230 LF 35 .00 43,050.00 31 Sanitary Sewer Tees 41 Ea 150.00 6,150.00 32 Construction Staking LS 8,000.00 8,000.00 Subtotal $829' 162 .50 Developer's Engineering 35,500.00 Developer's Interest 41,660.00 City Expenses 12-6a01 (d) (5%) 41,458.13 Interest, Bonding & Issue (I%) 8,291 .63 Total $956,072.25 2 Petition 4380 River Trail 2°d Addition to the City of Salina Cost of General Items Item# Item Qmmtity Unit Unit Cost Extension ) Clearing and Grubbing 1 LS 3,000.00 3,000.00 2 Common Excavation 4,400 CY 6.00 26,400.00 3 Embankment 2,700 CY 6.00 16,200.00 4 Erosion Control LS 5,000.00 5,000.00 5 Seeding LS 2,000.00 2,000.00 6 Temporary Construction Entrance Ton 55.00 55.00 Subtotal General Items $52,655.00 Developer's Engineering 4,437.50 Developer's Interest 5,207.50 City Expenses 12-6a01 (d) (5%) 2,632.75 Interest, Bonding & Issue 526.55 Total $65,459.30 Cost of Storm Improvements Item# Item Quantity Unit Unit Cost Extension 7 Area Inlet ) Ea 5,500.00 5,500.00 8 Curb Inlet 4 Ea 5,500.00 22,000.00 9 Storm Pipe, 18" RCP 70 LF 40.00 2,800.00 JO Storm Pipe, 24" RCP 133 LF 45.00 5,985.00 I 1 Storm Pipe, 42"x27" RCHEP 105 LF 100.00 10,500.00 12 Storm Pipe, 30"xl9" RCHEP 37 LF 60.00 2,220.00 13 End Section, I 8" RC Ea 250.00 250.00 14 End Section, 24" RC 2 Ea 300.00 600.00 15 End Section, 42"x27" RC 2 Ea 600.00 1,200.00 Subtotal Storm $51,055.00 Developer's Engineering 4,437.50 Developer's Interest 5,207.50 City Expenses 12-6a0l (d) (5%) 2,552.75 Interest, Bonding & Issue 510.55 Total $63,763.30 3 Petition 4380 River Trail 2nd Addition to the City of Salina Cost of Street Improvements Item# Item Quantity Unit Unit Cost Extension 16 Curb and Gutter 4,565 LF 17.50 $79,887.50 17 Asphalt Pavement 8" 7,330 SY 35.00 $256,550.00 18 Subgrade Modification 6" 7,600 SY 2.75 $20,900.00 19 Sidewalk Ramp Type I 8 Ea 600.00 $4,800.00 Subtotal Streets $362, 13 7 .50 Developer's Engineering 4,437.50 Developer's Interest 5,207.50 City Expenses 12-6a01 (d) {5%) 18,106.88 Interest, Bonding & Issue 3,621.38 Total $393,510.75 Cost of Water Jmprovements Item# Item Quantity Unit Unit Cost Extension 20 611 Water Main 2,090 LF 25.00 $52,250.00 21 1 Y:i" Water Service Line 1,189 LF 30.00 35,670.00 22 1" Water Service Line 1,230 LF 20.00 24,600.00 23 1 Yi" Water Service Assembly 9 Ea 750.00 6,750.00 24 1" Water Service Assembly 23 Ea 500.00 11,500.00 25 Curb Shutoff Valve and Box 41 Ea 350.00 14,350.00 26 Fire Hydrant and Valve Assembly 4 Ea 4,500.00 18,000.00 27 Fittings 1 LS 3,500.00 3,500.00 Subtotal Water Main $166,620.00 Developer's Engineering 8,875.00 Developer's Interest 10,415.00 City Expenses 12-6a01 (d) (5%) 8,331.00 Interest, Bonding & Issue 1,666.20 Total $195,907.20 4 Petition 4380 River Trail 2nd Addition to the City of Salina Cost of Sanitary Sewer Improvements Item# Item Quantity Unit Unit Cost Extension 28 Sanitary Sewer Pipeline 8" 2,171 LF 45.00 $97,695.00 29 4' Standard Sanitary Manhole Type 1 11 Ea 3,800.00 41 ,800.00 30 Sanitary Sewer 4" 1,230 LF 35.00 43,050.00 31 Sanitary Sewer Tees 41 Ea 150.00 6,150.00 Subtotal Sanitary Sewer $188,695.00 Developer's Engineering 8,875 .00 Developer's Interest 10,415.00 City Expenses 12-6a0l (d) (5%) 9,434.75 Interest, Bonding & Issue ] ,886.95 Total $219,306.70 Cost of Miscellaneous Items Unit Item# Item Quantity Unit Cost Extension 32 Construction Staking l LS 8,000.00 $8,000.00 Subtotal Miscellaneous Developer's Engineering Contingencies City Expenses 12-6a01 (d) (5%) Interest, Bonding & Issue Total 5 $8,000.00 4,437.50 5,207.50 400.00 80.00 $18,125.00 River Trail 2nd Addition Block 1 Block 2 Lot I Lot 2 Lot3 Lot 4 Lot 5 Lot 6 Lot 7 Lot 8 Lot 9 Lot IO Lot 11 Lot 12 Lot 13 Lot 14 Lot 15 Lot 16 Lot 17 Lot 18 Lot 19 Lot20 Lot 21 Lot 22 Lot23 Lot24 Lot 25 Lot 26 Lot 27 Lot 1 Lot 2 Lot3 Lot 4 Lots Lot 6 Lot 7 Lot 8 Lot 9 Petition 4380 River Trail 2"d Addition to the City of Salina Property Ownership Property Owner David A. Tillberg & Michael P. Murray & Cheryl Tillberg Murray KC Development, LLC David A. Tillberg & Michael P. Murray & Cheryl Tillberg Murray City of Salina KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC Kelly Dunn Construction, Inc. David A. Tillberg & Michael P. Murray & Cheryl Tillberg Murray KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC 6 Lot JO Lot 11 Lot 12 Lot 13 Lot 14 Lot 15 Lot 16 Lot 17 Lot 18 Lot 19 Lot20 Petition 4380 River Trail 2"d Addition to the City of Salina KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC 7 Petition 4380 River Trail 2nd Addition to the City of Salina Distribution of Cost Block 1 Water SS Street Stenn General Misc Total Lot 1 Platted Drainage Easement/Common Area Platted Drainage Easemenl/Common Area Lot2 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot 3 Pfotted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot 4 City Park Land City Park Land City Park Land Lot 5 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot6 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot7 3,583.67 4,011 .71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot8 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 9 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 10 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 11 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot 12 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot 13 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 14 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot 15 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 16 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 17 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 18 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot 19 3,583.67 4,011 .71 7,198.37 1,166.40 I ,197.43 '.Bl .55 $17,489.13 Lot20 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 21 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot22 3,583.67 4,01 l.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot23 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 24 3,583.67 4,011 .71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 25 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot26 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Block 2 Lot 1 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot2 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot3 3,583.67 4,011.71 7,198.37 1,166.40 I ,197.43 331.55 $17,489.13 Lot 4 3,583.67 4,011.71 7,198.37 l,166.40 1,197.43 331 .55 $17,489.13 Lot5 3,583.67 4,011 .71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot6 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot7 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot8 3,583.67 4,011.71 7,198.37 1,166.40 1, 197.43 331.55 $17,489.13 Lot9 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Lot 10 3,583.67 4,011.71 7,198.37 1,166.40 1, 197.43 331.55 $17,489.13 Lot 11 3,583.67 4,011.71 7,198.37 1,166.40 l,197.43 331.55 $17,489.13 Lot 12 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 8 Petition 4380 River Trail 2nd Addition to the City of Salina Lot 13 3,583.67 4,011.71 7,1 98.37 1,166.40 1,197.43 331.55 $17,489. I 3 Lot 14 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 15 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 16 3,583.67 4,011.71 7,198.37 1,166.40 l,197.43 331.55 $17,489.13 Lot 17 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 18 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331.55 $17,489.13 Lot 19 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.J 3 Lot20 3,583.67 4,011.71 7,198.37 1,166.40 1,197.43 331 .55 $17,489.13 Total $146,930.40 $164,480.03 $295, 133.06 $47,822.48 $49,094.48 $13,593.75 $717,054.19 tThe values in the table above reflect~ the 75% of the total value of the individual improvements divided by the number ofbuildablc lots in the benefit district. 9 I I z ... w .. c ii "1 I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 27, 2016 4:02p.m. The City Commission convened at 2:30 for Streets and Special Assessments and at 3:45 p.m. for Citizens Forum . The Regular Meeting of the Board of Commissioners was called to order at 4:02 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Randall Hardy, and Karl Ryan. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS None. CmZENS FORUM None. PuBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of June 20, 2016. 16-0260 Moved by Commissioner Blanchard, seconded by Commissioner Davis, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.0) Resolution No. 16-7376 acknowledging receipt by the City of the private support toward the cost of the Downtown Field House. project. . Jason Gage, City Manager, provided a brief explanation of the project and the funding. He continued to explain the receipt of ~ds for the private support. Pat Beatty, 204 S. Santa Fe, provided his thoughts on the project and funding and presented the Mayor with checks of the private funds collected for the project. Mayor Crawford thanked the citizens of Salina for the support. Mr. Gage stated in order to have a successful project it was best to have a public/ private partnership. Greg Bengtson, City Attorney, explained the resolution. Moved by Commissioner Ryan, seconded by Commissioner Davis, to adopt Resolution No. 16- 7376 acknowledging receipt by the city of a combination of contributed funds received from the Greater Salina Community Foundation (GSCF) and an advance of pledged contributions equal in Page 1 I I I "' "' 16-0262 total to the 4.5 million dollar ($4.5m) commitment of private support toward the cost of the downtown fieldhouse project and the city's commitment to reimburse the advance of pledged contributions to the extent future payments of pledged contributions are received by the GSCF and remitted to the city, not to exceed in total the amount of the advance of pledged contributions. Commissioner Blanchard asked if there was a list of additional expenses incurred to this point. Michael Schrage, Deputy City Manager, stated the expenses were listed in great detail and were paid for by the City of Salina. Mayor Crawford called the question to approve Resolution No. 16-7376. Aye: (5). Nay: (0). Motion carried. (7.1) Resolution No. 16-7375 authorizing the Mayor to enter in to a contract with Crossland Construction Company, Inc. to construct the Salina Field House. Michael Schrage, Deputy City Manager, explained the project, bids received, add alternates and staff recommendation. Commissioner Davis asked if the divider curtains and netting would be included in the bid. Mr. Schrage stated yes it was included in the bid. Commissioner Blanchard asked for addition~} information on insulation. Mr. Schrage stated the original insulation that was designed would be the insulation that would be installed in the building. Commissioner Ryan asked how the contractor would complete the project in 250 days when the other contractor's completion time was significantly longer. Ivan Crossland, Crossland Construction CEO, explained the company had a lot of steel crews that could get the building up before winter arrived so the sub-contractors could begin working on the inside. Moved by Commissioner Hardy, seconded by Commissioner Ryan, to adopt Resolution No. 16- 7375 authorizing the Mayor to enter into a contract with Crossland Construction Company, Inc. to construct the Salina Field House facility in the amount of $6,894,000.00 and authorize a 5% construction contingency in the amount of $~,700.00. Aye: (5). Nay: (0). Motion carried. (7.2) Resolution No. 16-7374 authorizing the Mayor to sign a real estate purchase agreement with James J. Brown, in order to acquire the property located at 301 North Tenth Street, Salina, Kansas. Chief Brad Nelson explained the purchase. Commissioner Hardy asked if the building would be razed. Mr. Nelson stated yes. 16-0263 Moved by Commissioner Ryan, seconded by Commissioner Blanchard, to adopt Resolution No. 16-7374 authorizing the Mayor to sign a real estate purchase agreement with James J. Brown, in order to acquire the property located at 301 North Tenth Street, Salina, Kansas. Aye: (5). Nay: (0). Motion carried. (7.3) Resolutions calling for ST AR Bond and Tax Increment Financing (TIP) Hearings; (7.3a) Resolution No. 16-7371 establishing the date and time providing for a public hearing to consider adoption of a ST AR Bond Project Plan pursuant to KS.A. 12-17, 160 et seq. Page2 I 16-0264 16-0265 I I (7.3b) Resolution No. 16-7372 establishing the date and time of a public hearing to consider adoption of a tax increment project plan pursuant to KS.A. 12-1770 et seq. Michael Schrage, Deputy City Manager, explained the project plans, district boundaries and action alternatives. Commissioner Blanchard asked if the project plans were the final submitted plans to the State of Kansas. Mr. Schrage stated the project plans had been submitted and the plan would be discussed at the August 22, 2016 public hearing. Jason Gage, City Manager, stated there would be conversations with Oschner, Hare & Hare in the future regarding the plan. Moved by Commissioner Davis, seconded by Commissioner Blanchard, to adopt Resolution No. 16-7371 setting August 22, 2016 as the public hearing date to consider adoption of a STAR Bond Project Plan pursuant to KS.A. 12-17, 160 et seq. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Davis, seconded by Commissioner Blanchard, to adopt Resolution No. 16-7372 setting August 22, 2016 as the public hearing date to consider adoption of a tax increment Project Plan pursuant to KS.A. 12-1770 et seq. Aye: (5). Nay: (0). Motion carried. Mr. Gage stated there were additional items that would be ready by the August 22, 2016 hearing date to include the community improvement district and development agreement. Commissioner Ryan recused himself due to a conflict of interest. (7.4) Resolution No. 16-7365 providing for the advisability and authorization related to establishing special improvement district for water, sanitary sewer, street and drainage improvements in River Trail 2°d Addition and authorizing the Mayor to execute an Improvement District Development Agreement between the City of Salina and KC Development, LLC. Dan Stack, City Engineer, explained the district, improvements and agreement. Commissioner Blanchard stated he prided himself on being prepared for items and asked if there was anything new or different regarding the price point of the homes that brought the special assessments from 100% to 75%. Mr. Stack stated the developer had paid costs to improve drainage in the area. Commissioner Blanchard asked if there was a price point for the homes. Mr. Stack stated the homes were close to the levy and would require additional requirements on the basements. Commissioner Blanchard asked if the other portions of the development had special assessments. Mr. Stack stated there was a combination of properties with special assessments and without. Commissioner Davis asked if the special assessments were tax deductible. Mr. Stack stated he was not sure. Page 3 I I I/) I/) 16-0266 116-0267 Commissioner Blanchard asked what the number of vacant lots were currently available. Jason Gage, City Manager, stated the price point would be quite a bit less than the other subdivisions. A conversation ensued between the Commission, Michael Schrage, Deputy City · Manager, Mr. Gage and Mr. Stack regarding the price point and special assessments. Kelly Dunn, KC Development, LLC, explained the price point and size of the homes and stated the special assessments could be a tax write off similar to loan payments. Commissioner Hardy a~ked when the properties would be developed. Mr. Dunn stated three (3) to five (5) years. Greg Bengtson, City Attorney, provided an explanation of the ability to deduct the tax on the special assessments. Moved by Cominissioner Davis, seconded by Commissioner Hardy, to adopt Resolution No. 16- 7365 relating to the establishment of a special improvement district for water, sanitary sewer, street and drainage improvements in River Trail 2nd Addition and authorization of the Mayor to execute an Improvement District Development Agreement between the City of Salina and KC Development, LLC. Commissioner Hardy stated he felt the project was somewhat of an infill project and the project deserved special attention. Commissioner Blanchard stated the need to look for affordability and uniqueness in homes and continued to provide his thoughts on the project and the community need. Mayor Crawford called the question. Aye: (3). Nay: (1) Blanchard. Motion carried. Commissioner Ryan returned. (7.5) Resolution No. 16-7377 authorizing the offering for sale of General Obligation Temporary Notes, Series 2016-2, of the City of Salina, Kansas. ·Michelle M.eyer, Director of Finance & Administration, explained the issuances and projects to be funded. Commissioner Blanchard asked for further explanation of the item. Jason Gage, City Manager, stated the temporary notes would bridge the financing during the construction before the bonds are issued. He continued to state there was an opportunity to have a private placement of the temporary notes. Commissioner Blanchard asked if there was zero risk. Mr. Gage stated the risk would be lower because the interest rate would be lower than during an open market rate calling. I Michael Schrage, Deputy City Manager, stated the parameters of the. agreement were outlined in the item which would keep the risk lower. Moved by Commissioner Ryan, seconded by Commissioner Hardy, to adopt Resolution No. 16- 7377 authorizing the offering for sale of General Obligation Temporary Notes, Series 2016-2, of the Page4 I 16-0268 I 16-0269 I City of Salina, Kansas and establish the parameters within which the Mayor is authorized to execute a Note Purchase Agreement subject to said parameters. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1) Resolution No. 16-7373 authorizing the Mayor to execute a license agreement with USD No. 305 authorizing the placement and construction of a new loading/unloading space in the Jewell Avenue right-of-way abutting Heusner Elementary School at 1300 Norton Street. Dean Andrew, Director of Planning, explained the request, license agreement and affected utilities. Moved by Commissioner Davis, seconded by Commissioner Ryan, to adopt Resolution No. 16- 7373 authorizing the Mayor to execute a license agreement with USD No. 305 authorizing the placement and construction of a new loading/unloading space in the Jewell Avenue right-of-way abutting Heusner Elementary School at 1300 Norton Street. Aye: (5). Nay: (0). Motion carried. (8.2) Consider dedication of a public utility easement across a strip of park land connecting Wildcat Circle to the Golden Eagle neighborhood park. Dean Andrew, Director of Planning, explained the easement, affected utilities and action options. Commissioner Hardy asked if the request would obligate the city to provide for any public utility. Mr. Andrew stated yes as it was currently constructed it would be available for any public utility. Moved by Commissioner Davis, seconded by Commissioner Ryan, to authorize the Mayor to execute a public utility easement granting a 10 foot utility easement across the west 10 feet of the park land corridor. Aye: (5). Nay: (0). Motion carried. (8.3) Application No. Z16-3, (filed by the Salina Planning Commission) requesting approval of a text amendment to Section 42-302(40) of the C-4 (Central Business District) regulations to modify the off-street parking requirements for hotels located in the C-4 district. (8.3a) First reading Ordinance No. 16-10842. Dean Andrew, Director of Planning, explained the text amendment and action options. Commissioner Davis asked if the same type of hotel with a restaurant and meeting rooms would be built downtown, how many parking spaces would be required. Mr. Andrew stated the hotel developers would still have to provide a parking plan. Commissioner Hardy asked if the hotel developers had provided comments on the agenda item. Mr. Andrew stated the comments received by staff were in favor of the text amendment. Commissioner Hardy asked if the hotel developer of the Hilton Garden Inn had any comments relating to the parking requirements. Mr. Andrew stated no but the developer had their own number of parking spaces determined. Commissioner Blanchard asked where the remaining people would park. Mr. Andrew Page 5 I 116-0270 16-0271 I stated the text amendment would just be a baseline for the number of parking spaces needed. · Com.missioner Davis stated his concern for the parking of the vehicles in proximity of the hotel. Mr. Andrew stated the parking could be adjacent to the hotel and under the control of the hotel. A conversation ensued between the Commission and Mr. Andrew regarding the parking. Jason Gage, City Manager, asked if the application was initiated by the Planning Com.mission. Mr. Andrew stated yes. Mr. Gage stated since the application was initiated by the Planning Commission, the City Commission could postpone the action allowing staff to work with the future hotel developer on the parking. Commissioner Blanchard asked if the city owned a parking lot in close proximity of the hotel, could the parking lot be leased to the hotel owner. Mr. Gage stated a permit could be created for the hotel to allow overnight parking in a city owned lot. A conversation ensued between Mr. Gage, Mr. Andrew and the Commission regarding the text amendment. Michael Schrage, Deputy City Manager, stated the hotel developer was working to acquire additional lots to help with the parking of the proposed hotel. Mr. Gage stated there was a city lot in close proximity of the proposed hotel location. Moved by Commissioner Hardy, seconded by Commissioner Davis, to pass Ordinance No. 16- 10842 requesting approval of a text amendment to Section 42-302(40) of the C-4 (Central Business District) regulations to modify the off-street parking requirements for hotels located in the C-4 district on first reading. Aye: (5). Nay: (0). Motion carried. OTHER BUSINESS Mayor Crawford asked citizens to be careful and be respectful of their neighbors for the 4th of July. Jason Gage, City Manager, stated the level of enforcement would be the same as last year. ADJOURNMENT Moved by Commissioner Ry"art, seconded by Commissioner Davis, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 5:55 p.m. {SEAL] ATIEST: ~vJlW Shandi Wicks, CMC, City Clerk Karl F.-Ryan, Vice-Mayor Page 6 ;· . I lllllllrllllllllrlllll I lfflllfflllll lllllllll lllllllllllllllrlllllllllrllllllll . ,·«·-:~··· REBECCA SEEMAN (;;.;~::::';;;.~;:\REGISTER OF DEEDS SALINE COUNTY KANSAS 1:; __ ;;;: •. i:J Book:1315 Page: 104-107 \'. .. ~·~,..-:': .. /Receipt#: 104854 t..\ Recording Fee: $0.00 ·····-Pages Recorded: 4 C,,1~ Date Recorded: 7 /21/2016 3:47:02 PM TypeofDocument --~R~e=so~lu~t~io~n'------------------~ Total Recording Fees -~O~·~OO~------------------- Return Address CITY OF SALINA ROOM 206 CINDY l ~ f .., .. .£ ~ i .. l' ! l l -Book: 1315 Page: 105 (Published in the Salina Journal on JU n e_ "3Q, 2016) RESOLUTION NUMBER 16-7365 A RESOLUTION SEITING FORTH FINDINGS AND DETERMINATIONS OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE ADVISABILITY OF AND AUTHORIZING THE CONSTRUCTION OF CERTAIN IMPROVEMENTS PURSUANT TO K.S.A. 12-6a01 et :seq. WHEREAS, a petition was filed with the City Clerk for the City of Salina, Kansas (the "City") on June 27, 2016, proposing certain improvements pursuant to K.S.A. 12-6a01 et seq. (the "Petition"); and WHEREAS, the Petition sets forth: (a) the general nature of the proposed improvements; (b) the estimated or probable cost of the proposed improvements; (c) the extent of.the proposed improvement district to be assessed for the cost of the proposed improvements; {d) the propose<l method of assessment; (e) the proposed apportionment of the cost between the improvement district and ihe City at large; and (f) a re<luest that such improvements be made without notice end hearing as required by K.3.A. 12-6a04(a); and WHEREAS, the owners of record of 100% the property liable to be assessed under the Petition have signed the Petition; and ,. WHEREAS, no signatures have been withdrawn from the petition before the Governing Body began consideration of the Petition; and WHEREAS, K.S.A. 12-6a04 provides that the Governing Body may authorize and order public improvements without notice and hearing after a sufficient petition has been filed; and WHEREAS, the governing body has reviewed and considered the Preliminary Engineering Estimate and Feasibility Report prepared by the City Engineer and agrees with the conclusions set forth therein. NOW THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section l. The Governing Body hereby finds that the Petition is sufficient, and further finds and detennines that it is necessary and advisable to make the following improvements: (a) The nature of the improvements are as follows: The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements"). · The installation of approximately 345 lineal feet of storm sewer pipe, inlei:s, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 2,090 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenance~ thereto (the "Water System Improvements"). The installation of approximately 2, I 71 lineal feet of eight-inch sani~ary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). L L L (b) (c) Book: 1315 Page: 16~ The estimated cost of the Improvements is: Nine Hundred Fifty-Six Thousand Seventy-Two Dollars and Twenty-Five Cents ($956,072.25). The boundaries of the improvement district to be assessed are: I _,,..., Lots 5 through 26, Block I; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. (collectively, the "lmp~ovement District"). (d) The apportionment of cost between the Improvement District and the city at large is: Seventy-five percent (75o/o) of the total cost of improvements shall be assessed to the Improvement District, twenty-five percent (25o/o) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. (e) The method of assessment against property within the Improvement District shall be equally per lot against all lots within the Improvement District. Section 2. The Governing Body hereby declares that the Improvements described in this Resolution are necessary, and authorizes them to be made in accordance with the Petition and the findings set forth in this Resolution, and further authorizes the levying of assessments and the issuance of bonds therefore (upon the satisfaction of certain conditions set forth in the Development Agreement described in Section 4 of this Resolution), all in accordance with K.S.A. 12-6a01 et seq .. Section 3. The City expects to make capital expenditures from and after the date of this Resolution in connection with the Improvements described herein, and intends to reimburse itself for such expenditures with the proceeds of one or more series of general obligation bonds and temporary notes of the City in the maximum principal amount of $956,072.25. Section 4. That certain Improvement District Development Agreement between KC Development, LLC and the City (the "Development Agreement") is hereby approved in substantially the fonn presented to the governing body on this date. The Mayor is authorized to execute the Development Agreement on behalf of the City, and the Mayor, Clerk and other City staff are authorized to take such further actions as necessary to carry out the transactions contemplated thereby. Section 5. The City Clerk shall file a certified copy of this Resolution with the Register of Deeds of Saline County, Kansas. Section 6. This Resolution shall take effect after its passage and publication once in the official city newspaper and receipt by the City of a fully executed Development Agreement; provided, if a fully executed Development Agreement is not delivered to the City within 30 days of the date hereof, the City may tenninate the Improvement District. ADOPTED AND PASSED this 27th day of June, 2016. (SEAL) l "' ~ f w .. & ell ll .. l1 ~ L L ·-. I hereby certify that the above and foregoing is a true and correct copy of Resolution No. 16-7365 that was adopted by the Governing Body of the City of Salina at their regular meeting on June 27, 2016. Shandi Wicks City Clerk 3 Book: 1315 Page: 107 -J Publisher's Affidavit I, __ ___,C..,h.,.n ... ·..,,s..,ty ....... F .... in....,k...._ ___ , being duly sworn declare that I am a I egal Coordjnator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Resolution 16-7365 Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of June 30, Subscribed and sworn to before me, this JD~ dayof ~ A.D. 20 I(, Printer's Fee S517.50 (Published In the sallnii ··The _lnstallallon of l Agre.ement oescnoeo m Journal.June 30. 2016) approximately 345 , ~lion 4 .ot this Resolu· • RESOLUTION lineal feet of storm 1 tron). all 1n accordance NUMBER 1~7365 Hwer pipe, inlets. with K.S.A. 12-6a01 el A RESOLUnON SET· and all nppurte· $8Q. . TING FORTH FINO· nances thereto (the ' Section 3. The ~tty INGS AND DETERMI· "Drainage Improve· expect6 to make capnal NATIONS OF THE ments"} expenditures from and · after the dale of this GOVERNING BODY OF The Installation of 'Resolution in connection THE CITY OF SAUNA, approximately 2,090 'with the Improvements KANSAS ON THE AD-lineal feet of six-inch :.described herein, ~ in-VISABILITY OF AND water main, fire '!Y.· 1',tends to reimburse_ itself AUTHORIZING THE drants, valves, ht· .fo_r such expenditures CONSTRUCTION OF tings; service con-!,with the proceed$ of one CERTAIN IMPROVE· nectlons for water I or more series cl gen· MENTS PURSUANT TO rtnes and an appurte~ l'eral obligation bonds K.S.A. 12-Ge01 etseQ. nances thereto (the land temporary notes ol , WHEREAS, a petition -"Water System Im· 1·111e City In the maximum was Hied with the City ~ provementsj. 1principal amount of Clerk for the City of Sa· • ;1$956,07225: lina, Kansas (the "City') The Installation of ;1 . Section 4. That cer· on June 13, 2016, pro-·approximately 2, 171 , taln Improvement Dis· posing certain improve· lineal leet of 1.trlct Development ments pursuant to eight-Inch sanitary ·Agreement between KC K.5.A. 12-6801 et seq. JeWer main, service dDevelopment. LLC and .(the "Petitlon1: and ,. connections for .the City (the "Develop-• WHEREAS, the Pell· , •. sewer lines, man-'lment Agreemeryt") Is lion sets forth: (a) the .• holes and atl appur· I hereby approved Ul sub-genera! nature of the : tenances thereto .:stantially the form P.re· proposed improvements: , ; (the "Sanitary Sewer l'sented to the govem111g (b) the estimated or · lmprovemen1Sj. \body on this date. The probable COSI of the pro-j' I Mayor Ls authorized to posed Improvements; (c) (coHeet!Vely, the 'Im· execute the Develop· the extent of tile pro-. provements'). 'ment Ag;eernent on be· posed improvement dis· · . . • ·-~all of the City, and the trlct to be assessed for ,lb) The estlmated cost 1 Mayor, .Clerk and o~her the eost oJ the .PJoposed ~of the Improvements , City staff are authorized improvements; · (d) · the Is:_.· --...... to ~~-tu111ter ac··1· proposed-method ol as-• 1 ·ons as necessary to sessment<(e) !tie pro· Nine Hundred carry out the transat· posed ·api>orlionment of Flfty·Slx Thousand· jtlons contemplated the cost between the Im· 5even1Y-Two Dollars thereby. . provement district and and twenty-Five Section 5. The City the City at large: and (I) Cents Clerk ~halt me a cer1lfied a request that such Im-($956,072.25). copy of this Resolution provements be made with lhe Re9ister of without notice and hear· (c) The boundaries of Deeds of Sallrie County, ing ~s required by the Improvement ;.Kaf.sas. . · K.S.A. 12-&i04(a); and district to t>e as-·: Section 6. This Reso· WHEREAS. the own· sessed ere: 11ullon shall take effect ers of record of 100% 1,atter.lts passage and me property liable to be Lols 5 through 26, publication once In the assilssed under the Pe-Bicek 1; Lots 2 offielill city newspaper tltion have signed the -through 20, Block 2, arid receipt by lhe City Petltlon; and "' e.11 In the River .Trail of a fully executed De· ;. WHEREAS, no sigr>a· 2nd .Addition, City of velopment Agreement; tures have been with· .• Salina, Saline prCMded, if a funy exe- ilrawn from the petition County. Kansas. cuted De_velopme,nt before the Governing (collectively. the 'Im-Agreement 1s not delrv· Body began considers· enid 10 the City within 30 lion of the Petition; and provement District"). days of the date hereof, WHEREAS, K.S.A. · the City may term~te 12-6804 provide& that '(d)' The apportionmenl the Improvement D1s- the GoveminO Body may ·" of cost between the trict. '9111horize and orde~ pub-Improvement District lie Improvements wi!hout and 1he city at large ADOPTED AND PASSED notice and hearing after ls: • 1thls 27th day of June a sufficient petition has ·2016. been med; and , Seventy·f1Ve percent \ -WHEREAS, the gov· (75%) of the tote! Kaye J. Crawford, -cost of Improve· erning body has re· ments shaH be as· l Mayor vleweil and considered sessed ·to the Im· ! the· Preliminary Engl· provement, D]strict, !(SEAL) neering Estimate and twenty-five percent Feasibility Report pre· (25%) shan be ~ .Stiandl L Wicks, pared.by 1h_e_C1~1; by' the devetoper{s) City Clerk ·neer and apes and no portlon of ·f (11) conclusions set_lorth costs· shall be paid t-• .:: .. :..:.··------ttiereln. .,. -NOW THEREFORE, by ~.~.at l.alge. BE " RESOLVED BY (e) The methOd·ol as- .. TH E GOVERNING sessm, en_!_.a~!!n~t BODY OF THE CITY · I tne OF SAUNA, KANSAS, property wt m · As FOLLOWS: Improvement District shall be equally per •· Section 1. The Gov· ernlng Body hereby· finds ihat th• Petition is s;ufllclent, end lurther finds and determines that it is necessery and advisable to ·make the following improvements: (a) The nature of the Im- • provements are 'as tonows: The eurb, gutter, pavement and grad· Ing for ilpproxlmaU!ly 2,297 lineal feet of Saddlebrook Drive, Munay Lane, RIY~r Trail Road, Michael Circle, end Meredith Clrcle (the •street Improvements;. · lot against all lots within the Improve- ment Dlstric1. Section 2. The GOY· eming Body hereby de-'clares that the-lmprove- 'ments described In thls Resolution are neces· 'sary, and authorizes ithem to be made In ac· 1 cordance with the Peli· lioo and the findin & set forth In this Reso~on, and further authorizes the lavying of assess· ments and :he Issuance~ of bonds ~.r,;r:>re (upon the satisf~lon of cer- tain condltlons set lorth ln<-.Jhe_ Qeyel0Pm11n IMPROVEMENT DISTRICT DEVELOPMENT AGREEMENT by and between the CITY OF SALINA, KANSAS and KC DEVELOPMENT, LLC DATED AS OF August 29, 2016 IMPROVEMENT DISTRICT DEVELOPMENT AGREEMENT This Improvement District Development Agreement (the "Agreement") dated as of August 29, 2016, by and between the City of Salina, Kansas (the "City"), and KC Development, LLC, a Kansas limited liability company (the "Developer"). WHEREAS, on June 13, 2016, the Developer filed with the City Clerk Petition No. 4380(the "Petition"), pursuant to K.S.A. 12-6a01 et seq. (the "Act"); and WHEREAS, the Petition requests that the City create the Improvement District, construct the Improvements, assess the costs thereof against the Improvement District (all as defined in the Petition), and issue the City's general obligation bonds to fmance the costs of the hnprovements; and WHEREAS, the City has prepared the Preliminary Engineering and Feasibility Report (the "Feasibility Report") related to the Improvements; and WHEREAS, the Developer desires to construct the Improvements and provide financing for the costs of the Improvements until such time as the City issues general obligation bonds to permanently finance the costs of the Improvements, all subject to the terms and conditions of this Agreement; and NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as follows: 1. Constructing the Improvements. A. Construction. Developer shall design, construct and install, at its own expense, the Improvements described in the Petition, subject to reimbursement by the City as provided in Paragraph 3 below. The design, construction and installation of the Improvements shall be in accordance with all applicable laws including the City Code, and Developer shall obtain or shall cause to be obtained all licenses, permits or other approvals required by any governmental authorities to complete the Improvements. B. Timing. The Developer shall begin work on the Improvements promptly after execution of this Agreement, but no contract shall be let and construction shall not commence until after Resolution No. 16-7365 (creating the Improvement District and authorizing the Improvements, the "Advisability Resolution") is published in the Salina Journal. All work on the Improvements must be performed with reasonable diligence and work may not cease for more than fifteen (15) consecutive days. 2. Certifying Completion of the Improvements A. Upon the completion of the Improvements, Developer shall submit to the City a request for reimbursement, accompanied by copies of all paid invoices for the Improvements, in accordance with Exhibit A. The Developer also shall furnish all records, contracts, bills and other documents relating to the Improvements and the Developer's financing of the costs thereof, that the City reasonably requests in order to verify the amount to be reimbursed pursuant to this Agreement. Further, Developer shall provide to the City adequate documentation that all contractors, engineers or other parties that have provided goods or services for the Improvements have been paid in full by the Developer. B. After receiving the foregoing information, the City will arrange for final inspection of the Improvements. If the Improvements have been completed in substantial compliance with the Advisability Resolution, the City shall certify completion of the Improvements and issue a Certificate of Completion in accordance with Exhibit B. The City shall review all invoices and other requested documentation, inspect the Improvements and either (i) issue to the Developer a Certificate of Completion or (ii) provide to Developer a list of additional required documentation, within 30 days after the Developer submits a request for reimbursement. 3. Reimbursement. A. The City shall reimburse the Developer for the Developer's actual cost of the Improvements, as submitted pursuant to Paragraph 2 of this Agreement. The Developer shall also be reimbursed for interest expense related to financing the costs of the Improvements only to the extent that the Developer has obtained financing from an unrelated third party, and then the Developer shall only be reimbursed for such financing costs as are paid by the Developer to the unrelated third party. B. The maximum total amount of reimbursement to the Developer under this Agreement shall not exceed $681,591.981, less 25% of the City's actual expenses, interest, and bond issuance costs as described in the Preliminary Engineering Report (estimated at $12,474.502). The Parties agree that the costs shown in the Petition and Feasibility Report are an estimate only, and reimbursement shall be based on the actual expenses incurred by the Developer and verified by the City pursuant to Paragraph 2 of this Agreement; except that, in no event shall the Developer be entitled to reimbursement in excess of the amount shown in this paragraph. C. The City shall not issue any reimbursement payment until all of the following actions have occurred: (i) the Certificate of Completion has been issued in accordance with Paragraph 2 of this Agreement; (ii) an ordinance levying assessments pursuant to the Petition, the Advisability Resolution and the Act has been approved by the City Commission; and (iii) the Developer has provided a financial guarantee in accordance with Resolution 13-7055 of the City and Paragraph 4 of this Agreement; and (iv) the City has issued its general obligation bonds to permanently finance the costs of the Improvements. D . The Developer hereby acknowledges that the following actions are required after the Certificate of Completion is issued and before proceeds of the City's general obligation bonds are available to reimburse the Developer: a. City prepares final feasibility study showing final costs of the Improvements and allocation of assessments to each property within the Improvement District; 1 Amount computed as 75% of the estimated construction ($831,629.30), developer's engineering ($35,500.00) and developer's interest ($41,660.00) costs. 2 Amount computed as 25% of the City's expenses ($41,58 l.47) and interest, bonding and issue costs ($8,316.47). 2 b. City Commission adopts resolution calling a public hearing on the levy of assessments; c. Notice of public hearing on the levy of assessments is published in the local paper and mailed to all property owners within the Improvement District; d. City Commission holds public hearing on the levy of assessments and considers on first reading the ordinance levying assessments; e. City Commission has second reading and approves ordinance levying assessments; f. Ordinance levying assessments is published in local paper; g. Property owners within the Improvement District are given 30 days to prepay assessments; h. The Developer has provided the financial guarantee in accordance with Resolution 13-7055 of the City and Paragraph 4 of this Agreement; i. Amount of general obligation bond financing is determined by City (equal to total costs of Improvements less any prepayments); j. City works with Financial Advisor and Bond Counsel to begin marketing general obligation bonds to investors; k. City holds bond sale; Commission approves sale of bonds to best bidder; 1. City works with financing team on various closing matters; m. City certifies assessment, together with interest, to County for property tax bills; n. City closes bond issue; receives funds to reimburse Developer. Developer further acknowledges that the City typically issues general obligation bonds in July of each year. In order for the City to complete all of the above-referenced steps to include financing for the Improvements in a particular year's bond issuance, the Developer must submit the documentation required by Paragraph 2 of this Agreement in sufficient time to permit the City to issue a Certificate of Completion by MARCH 1. If a Certificate of Completion is not issued by MARCH 1, then reimbursement will not occur until the following year's regularly-scheduled general obligation bond issue. The Developer is solely responsible for paying any additional financing costs incurred by the Developer as a result of any delay in the issuance of general obligation bonds for the Improvements, if such financing costs, together with the actual project costs, exceed the maximum reimbursement set forth in Paragraph 3CA) of this Agreement. E. The City will use its best efforts to issue general obligation bonds in July of each year. If the City's issuance of general obligation bonds to permanently finance the Improvements is prevented, hindered or delayed for any reason, the Developer is solely responsible for carrying the costs of the Improvements. The City shall have no obligation to reimburse the Developer unless and until the City issues general obligation bonds for the purpose of financing the Improvements. 4. Financial Guarantee Required from Developer. Within 30 days after the governing body approves an Ordinance levying assessments against the Improvement District (the "Assessment Ordinance"), the Developer shall provide the financial guarantee required by Resolution I 3-7055 (the "Financial Guarantee"). The Financial Guarantee shall be in one of the following forms: A. cash, cashier's check or an escrow account equal to 20% of the total assessments levied against all properties within the Improvement District pursuant to the Assessment Ordinance; or 3 B. an irrevocable letter of credit equal to 35% of the total Special Assessments levied against all properties within the Improvement District. The Developer's Financial Guarantee may be applied annually to satisfy the principal of and interest on the bonds issued to finance the Improvements, if any assessments are not paid when due. The Developer's Financial Guarantee shall be released upon the request of the Developer at the earlier of: (i) five (5) years from the date the governing body of the City adopts the Assessment Ordinance or (ii) the date when certificates of occupancy are issued for at least 35% of the lots within the Improvement District. 5. Waiver. THE DEVELOPER HEREBY AGREES TO WAIVE ANY RIGHTS THAT IT MAY HAVE PURSUANT TO KANSAS STATUTES, THE KANSAS CONSTITUTION, THE UNITED STATES CONSTITUTION, OR AS OTHERWISE PROVIDED BY LAW TO OBJECT TO ANY SPECIAL ASSESSMENTS REQUESTED IN THE PETITION AND IMPOSED PURSUANT TO THE ACT. Developer acknowledges and agrees that this waiver is freely given and with full knowledge of the extent of all statutory, constitutional or other legal rights being waived thereby, and is given in consideration of the City forming the Improvement District and assisting in providing for the financing and construction of the Improvements. 6. City Expenses; Deposit. Developer shall be responsible for the payment of all non-City employee legal, financial and planning consultants for direct out-of-pocket expenses and other reasonable costs resulting from services rendered to the City to review, evaluate, process and consider the Petition and this Agreement (the "City Expenses"). Before this Agreement becomes effective, Developer shall deposit with the City the sum of $2,500.00 to pay the City Expenses. If such deposit is insufficient to pay all City Expenses, Developer shall pay all additional City Expenses within 10 days after presentation of an invoice from the City. The City shall return any unused funds to the Developer on the date when the City reimburses the Developer pursuant to Paragraph 3 of this Agreement. 7. Indemnity. A. General Indemnity. The Developer shall indemnify, release, defend, be responsible for and forever hold harmless the City, its officers, agents, employees, elected officials, and attorneys, each in their official and individual capacities, from and against all lawsuits, suits, actions, costs, claims, demands, damages, disability, losses, expenses, including reasonable attorney's fees and other defense costs or liabilities of any character and from any cause whatsoever, brought because of bodily injury or death received or sustained, or loss or damage received or sustained, by any person, persons, or property arising out of or resulting from any act, error, omission, or intentional act of the Developer or its agents, employees, or subcontractors in connection with the design, construction, installation and maintenance of the Improvements. B. No Limitations or Waiver. The indemnity required hereunder shall not be limited by reason of any insurance coverage provided by Developer as required by this Agreement. The City does not, and shall not, waive any rights against the Developer which it may have by reason of this indemnification. This indemnification by the Developer shall not be limited by reason of whether or not Developer's insurance policies shall have been determined to be applicable to any such damages or claims for damages. 4 C. Use of Independent Contractors. The fact that the Developer carries out any activities connected with the Improvements under this Agreement through independent contractors shall not constitute an avoidance of, or defense to, the Developer's duty of defense and indemnification under this paragraph. 8. Insurance. During construction of the Improvements, Developer shall maintain insurance in favor of the City that is consistent with the form and type of insurance customarily maintained in connection with the construction of similar improvements. 9. Default and Termination. Developer shall be in default of this Agreement if Developer fails to comply with any obligations set forth in this Agreement. This Agreement may be terminated at the option of the City if written notice of event of default has been delivered to the Developer by the City and the Developer has not cured such default or is not actively pursuing such cure within thirty (30) days after such notice is delivered. 10. General Provisions. A. No waiver of any provision of this Agreement will be deemed or constitute a waiver of any other provision, nor wilJ it be deemed or constitute a continuing waiver unless expressly provided for by a written amendment to this Agreement signed by both City and Developer; nor will the waiver of any defect under this Agreement be deemed a waiver of any subsequent default or defaults of the same type. The City's failure to exercise any right under this Agreement, will not constitute the approval of any wrongful act by the Developer or the acceptance of any Improvements. B. The parties to this Agreement may amend or modify this Agreement only by written instrument duly executed by the parties hereto. C. No person or entity who or which is not a party to this Agreement will have any right of action under this Agreement. D. This Agreement constitutes the entire Agreement between the parties, and no statements, promises, or inducements that are not contained in this Agreement wiIJ be binding on the parties. This Agreement may not be assigned to any other parties without the prior written consent of the City. E. If any part, term, or provision of this Agreement is held by a court to be illegal or otherwise unenforceable, such illegality or unenforceability will not affect the validity of any other part, term, or provision, and the rights of the parties will be construed as of the part, term, or provision was never part of this Agreement. F. The City may file a copy of this Agreement in the office of the Register of Deeds for Saline County, Kansas. G. Nothing contained in this Agreement constitutes a waiver of the City's sovereign immunity under any applicable state law. H. This Agreement shall be construed in accordance with and governed by the laws of the State of Kansas. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 5 IN WITNESS WHEREOF, the parties hereunto have executed this Agreement tbisJD-Kday of '2016. ~~...+"~~- (Seal) ATTEST: Shandi Wicks City Clerk STATE OF KANSAS COUNTY OF SALINE ) ) SS. ) CITY OF SALINA, KANSAS On Aua,,.t ~ 2016, before J"" the ~::rliJ-;K.otary Pub.liC .m aOO . for sfild strte, personally a~ J:(}au>k,Y' and a 1~ , proved to me Q~ the basts of satisfactory evidence t.Oetbe persons whose names are subscnbed. to the w~thin·fastrument a8 Mayor and City Clerk, respectively, of the CTIY OF SALINA, KANSAS, and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the entity upon behalf of which the persons acted, executed the instrument. WTINESS my hand and official seal. My commission expires: 6 JN WITNESS WHEREOF, the parties hereunto have executed this Agreement this __ day of '2016. ------ STATEOF \10.0~!:> COUN1Y OF :nJ tne Title: Member ) ) SS. ) On Auq _29, 2016, before me, the undersigned, a Notary Public in and for said State, personally appeared Kelly R. Dunn, who proved to me on the basis of satisfactory evidence to be a Member of KC Development, LLC and acknowledged to me that they executed the same in their authorized capacity, and that by such person's signature on the instrument the entity upon behalf of which such persons acted, executed the instrument. WITNESS my hand and official seal. A • SHANDI L. WICKS l!l!Dl Notary Public • State of Kansas My Appl. Expires Notary Public My commission expires: 7 EXHIBIT A FORM OF REIMBURSEMENT REQUEST TO: City of Salina, Kansas Attention: City Manager Re: River Trail 2nd Addition Improvement District Terms not otherwise defined herein shall have the meaning ascribed to such terms in the Improvement District Development Agreement dated as of .Jtme __J 2016 (the "Agreement") between the City and the Developer. AU.11.(.If Z-'11 In connection with the Agreement, the undersigned hereby states and certifies that: 1. Each item listed on Schedule 1 hereto is cost that was incurred in connection with the construction of the Improvements after ]f® iF2;4t-' 2016, and is an eligible cost pursuant to the Petition, the Advisability Resolution and the ~J't~ · ~ Attached hereto are invoices and other supporting documentation showing proof that each cost listed in Schedule 1 was actually incurred by the Developer and is an eligible cost pursuant to the Petition, the Advisability Resolution and the Act. 2. There has not been filed with or served upon the Developer any notice of any lien, right of lien or attachment upon or claim affecting the right of any person, firm or corporation to receive payment of the amounts stated in this request, except to the extent any such lien is being contested in good faith. 3. The Improvements have been completed in a workmanlike manner and in accordance with all construction plans approved by the City. All necessary permits and approvals required for the work for which this certificate relates were issued and were in full force and effect at the time such work was being performed. 4. The Developer is not in default or breach of any term or condition of the Agreement, and no event has occurred and no condition exists which constitutes an event of default under the Agreement. Dated this __ day of _____ ~ 20 A-1 KC DEVELOPMENT, LLC a Kansas limited liability company Title: Pte5 . A-2 Approved for Payment this __ day of _____ , 20 __ : CITY OF SALINA, KANSAS By: Title: A-3 EXBlBITB FORM OF CERTIFICATE OF COMPLETION The undersigned, KC DEVELOPMENT LLC, a Kansas limited liability company (the "Developer"), pursuant to that certain Improvement District Development Agreement dated as of June ~ 2016, between the CITY OF SALINA, KANSAS (the "City") and the Developer (the "Agreement"), hereby certifies to the City as follows: 1. That as of , 20_, the construction of all Improvements (as such term is defined in the Agreement) have been completed in accordance with the Petition, the Advisability Resolution and the Agreement. 2. This Certificate of Completion is being issued by the Developer to the City in accordance with the Agreement to evidence the Developer's satisfaction of all obligations and covenants with respect to the construction of the Improvements. 3. At the Developer's request, the City shall record this Certificate with the Saline County Recorder of Deeds, as evidence that the Developer has satisfied all agreements and covenants to construct the Improvements pursuant to the Agreement. Terms not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement. IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand this __ day of ____ ,20 __ . CITY OF SALINA, KANSAS By: ___________ _ Title: ------------ (Insert Notary Form and Legal Description if Certificate to be Recorded) B-1 Final Engineering Report Petition No. 4380 River Trail 200 Addition Utility, Street, and Drainage Improvements File No. 63153 March 2018 Petition 4380 River Trail 2nd Addition to the City of Salina SCOPE OF WORK The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements"). The installation of approximately 345 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"). The installation of approximately 2,090 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 2, I 7 I lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). BENEFIT DISTRICT River Trail 2nd Addition Lots 5 through 26, Block 1; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. (the "Improvement District"). ADOPTION OF ASSESSMENT The assessment with accrued interest to be levied as a special assessment tax upon the property included with the benefit district concurrent with the general property tax and shall be payable in fifteen equal annual installments. Each parcel in the Improvement District shall be assessed equally per lot for costs of the various Improvements benefitting such lot as described under the heading Apportionment of Cost below. APPORTIONMENT OF COST Seventy-five percent (75%) of the total cost of improvements shall be assessed to the Improvement District, twenty-five percent (25%) shall be paid by the developer(s) and no portion of costs shall be paid by the City at Large. Petition 4380 River Trail 2"d Addition to the City of Salina Cost of Improvements Item# Item Quantity Unit Unit Cost Extension 1 Clearing and Grubbing 1 LS 22,000.00 22,000.00 2 Tree Removal 1 LS 21 ,300.00 21,300.00 3 Common Excavation 4,400 CY 4.50 19,800.00 4 Embankment 2,700 CY 3.80 10,260.00 5 Erosion Control I LS 4,000.00 4,000.00 6 Seeding 1 LS 3,500.00 3,500.00 7 Temporary Construction Entrance 93 Ton 100.00 9,300.00 8 Area Inlet (18" Nyloplast Drain Basin) Ea 2,750.00 2,750.00 9 Curb Inlet 4 Ea 5,100.00 20,400.00 IO Storm Pipe, 12" RCP 264 LF 31.50 8,316.00 11 Storm Pipe, 18" RCP 70 LF 37.50 2,625.00 12 Storm Pipe, 24" RCP 133 LF 49.00 6,517.00 13 Storm Pipe, 42"x27" RCHEP 105 LF 107.00 11 ,235.00 14 Storm Pipe, 30"x 19" RCHEP 37 LF 80.00 2,960.00 15 End Section, 12" RC Ea 500.00 500.00 16 End Section, 18" RC Ea 600.00 600.00 17 End Section, 24" RC 2 Ea 700.00 1,400.00 18 End Section, 42"x27" RC 2 Ea 1,400.00 2,800.00 19 Curb and Gutter 4,565 LF 14.50 66,192.50 20 Concrete Pavement 6" 7,428 SY 34.80 258,494.40 21 Subgrade Modification 6" 9,166 SY 1.00 9,166.00 22 Fly Ash (8 lbs/SF) 9,166 SY 6.40 58,662.40 23 Sidewalk Ramp Type I 8 Ea 535.00 4,280.00 24 6" Water Main 2,268 LF 18.00 40,824.00 25 I W' Water Service Line 533 LF 19.00 10,127.00 26 I " Water Service Line 108 LF 14.00 I ,512.00 27 I W' Water Service Assembly 9 Ea 550.00 4,950.00 28 I" Water Service Assembly 23 Ea 435.00 10,005.00 29 Curb Shutoff Valve and Box 41 Ea 310.00 12,710.00 30 Fire Hydrant and Valve Assembly 4 Ea 3,800.00 15,200.00 31 Fittings 1 LS 2,000.00 2,000.00 32 Sanitary Sewer Pipeline 8" 2,171 LF 31.00 67,301.00 33 4' Standard Sanitary Manhole Type I 11 Ea 7,200.00 79,200.00 34 Sanitary Sewer 4" 1,550 LF 24.50 37 ,975 .00 35 Sanitary Sewer Tees 41 Ea 93.00 3,813.00 36 Construction Staking LS 11,250.00 11 ,250.00 37 Geotechnical Report LS 5,500.00 5,500.00 2 Petition 4380 River Trail 2"d Addition to the City of Salina CO I 6" Waterline Extension LS 2,379.16 2,379.16 C02 0.00 0.00 C03 Sidewalk 2460 SF 4.85 11,931.00 Subtotal $863,735.46 Developer's Engineering 32,166.15 Developer's Interest 83,320.74 City Expenses 12-6a01 (d) (5 %) 43,186.77 Interest, Bonding & Issue ( 1 % ) 11 ,100.00 Total $1 ,033,509.12 3 Petition 4380 River Trail 2°d Addition to the City of Salina Cost of General Items Item# Item Quantity Unit Unit Cost Extension 1 Clearing and Grubbing 1 LS 22,000.00 22,000.00 2 Tree Removal LS 21,300.00 21,300.00 3 Common Excavation 4,400 CY 4.50 19,800.00 4 Embankment 2,700 CY 3.80 10,260.00 5 Erosion Control LS 4,000.00 4,000.00 6 Seeding 1 LS 3,500.00 3,500.00 7 Temporary Construction Entrance 93 Ton 100.00 9,300.00 Subtotal General Items $90,160.00 Developer's Engineering 5,361.03 Developer's Interest 13,886.79 City Expenses 12-6a01 (d) (5%) 4,508.00 Interest, Bonding & Issue 1,158.66 Total $115,074.48 Cost of Storm Improvements Item# Item Quantity Unit Unit Cost Extension 8 Area Inlet (18" Nyloplast Drain Basin) 1 Ea 2,750.00 2,750.00 9 Curb Inlet 4 Ea 5,100.00 20,400.00 10 Storm Pipe, 12" RCP 264 LF 31 .50 8,316.00 11 Storm Pipe, 18" RCP 70 LF 37.50 2,625.00 12 Storm Pipe, 24" RCP 133 LF 49.00 6,517.00 13 Storm Pipe, 42"x27" RCHEP 105 LF 107.00 11,235.00 14 Storm Pipe, 30"x19" RCHEP 37 LF 80.00 2,960.00 15 End Section, 12" RC Ea 500.00 500.00 16 End Section, 18" RC Ea 600.00 600.00 17 End Section, 24" RC 2 Ea 700.00 1,400.00 18 End Section, 42"x27" RC 2 Ea 1,400.00 2,800.00 Subtotal Storm $60,103.00 Developer's Engineering 5,361.03 Developer's Interest 13,886.79 City Expenses 12-6a01 (d) (5%) 3,005.15 Interest, Bonding & Issue 772.39 Total $83,128.36 4 Petition 4380 River Trail 2"d Addition to the City of Salina Cost of Street Improvements Item# Item Quantity Unit Unit Cost Extension 19 Curb and Gutter 4,565 LF 14.50 $66,192.50 20 Concrete Pavement 611 7,428 SY 34.80 $258,494.40 21 Subgrade Modification 611 9,166 SY 1.00 $9,166.00 22 Fly Ash (8 lbs/SF) 9,166 SY 6.40 $58,662.40 23 Sidewalk Ramp Type I 8 Ea 535.00 $4,280.00 Subtotal Streets $396,795.30 Developer's Engineering 5,361.03 Developer's Interest 13,886.79 City Expenses 12-6a01 (d) (5%) 19,839.77 Interest, Bonding & Issue 5,099.28 Total $440,982.16 Cost of Water Improvements Item# Item Quantity Unit Unit Cost Extension 24 6 11 Water Main 2,268 LF 18.00 $40,824.00 25 I Yi'' Water Service Line 533 LF 19.00 10,127.00 26 I 11 Water Service Line 108 LF 14.00 1,512.00 27 I Yi'' Water Service Assembly 9 Ea 550.00 4,950.00 28 111 Water Service Assembly 23 Ea 435.00 10,005.00 29 Curb Shutoff Valve and Box 41 Ea 310.00 12,710.00 30 Fire Hydrant and Valve Assembly 4 Ea 3,800.00 15,200.00 31 Fittings LS 2,000.00 2,000.00 Subtotal Water Main $97,328.00 Developer's Engineering 5,361.03 Developer's Interest 13,886.79 City Expenses 12-6a01 (d) (5%) 4,866.40 Interest, Bonding & Issue 1,250.78 Total $122,692.99 5 Petition 4380 River Trail 2"d Addition to the City of Salina Cost of Sanitary Sewer Improvements Item# Item Quantity Unit Unit Cost Extension 32 Sanitary Sewer Pipeline 8" 2,17I LF 31.00 $67,301.00 33 4' Standard Sanitary Manhole Type I I I Ea 7,200.00 79,200.00 34 Sanitary Sewer 4" 1,550 LF 35 Sanitary Sewer Tees 41 Ea Subtotal Sanitary Sewer Developer's Engineering Developer's Interest City Expenses I 2-6a0I (d) (5%) Interest, Bonding & Issue Total Cost of Miscellaneous Items Item# Item 36 Construction Staking 37 Geotechnical Report CO 1 6" Waterline Extension C02 CO 3 Sidewalk Subtotal Miscellaneous Developer's Engineering Developer's Interest City Expenses 12-6a01 (d) (5 %) Interest, Bonding & Issue Total 6 Quantity Unit 1 LS LS LS 2460 SF 24.50 37,975.00 93.00 3,813.00 $I88,289.00 5,361.03 13,886.79 9,4I4.45 2,4I9.73 $219,371.00 Unit Cost Extension I I ,250.00 $1 I ,250.00 5,500.00 $5,500.00 2,379.I6 $2,379.16 0.00 $0.00 4.85 $I I,931.00 $31,060.I6 5,361.03 13,886.79 1,553.0I 399.16 $52,260.I4 River Trail 2nd Addition Block I Lot 1 Lot 2 Lot 3 Lot4 Lot S Lot6 Lot7 Lot8 Lot9 Lot IO Lot 11 Lot 12 Lot 13 Lot 14 Lot 15 Lot 16 Lot 17 Lot 18 Lot 19 Lot20 Lot 21 Lot22 Lot 23 Lot24 Lot 25 Lot 26 Block 2 Lot 1 Lot2 Lot3 Lot4 Lots Lot6 Lot7 Lot 8 Lot 9 Lot 10 Petition 4380 River Trail 2"ct Addition to the City of Salina Property Ownership KC Development, LLC KC Development, LLC Property Owner David A. Tillberg & Michael P. Murray & Cheryl Tillberg Murray City of Salina Park Land KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC JC Builders, Inc. KC Development, LLC KC Development, LLC KC Development, LLC Ronald L. & Beth E. Hanson KC Development, LLC KC Development, LLC JC Builders, Inc. KC Development, LLC Kelly Dunn Construction, Inc. KC Development, LLC KC Development, LLC David A. Tillberg & Michael P. Murray & Cheryl Tillberg Murray KC Development, LLC Kelly Dunn Construction, Inc. Kelly Dunn Construction, Inc. Salina Area Technical College KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC 7 River Trail 2nd Addition Lot 11 Lot 12 Lot 13 Lot 14 Lot 15 Lot 16 Lot 17 Lot 18 Lot 19 Lot 20 Petition 4380 River Trail 2"ct Addition to the City of Salina KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC KC Development, LLC Property Owner Kelly Dunn Construction, Inc. JC Builders, Inc. KC Development, LLC KC Development, LLC 8 Petition 4380 River Trail 2"d Addition to the City of Salina Distribution of Cost Water SS Street Storm General Misc Total Block 1 Lot 1 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot2 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot 3 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot4 City Park Land City Park Land City Park Land Lots 2,222.34 3,970.23 7,976.87 l ,S07 .03 2,084.60 948.94 $18,710.00 Lot6 2,222.34 3,970.23 7,976.87 l ,S07 .03 2,084.60 948.94 $18,710.00 Lot? 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot8 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 Lot 9 2,222.34 3,970.23 7,976.87 l ,S07 .03 2,084.60 948.94 $18,7 10.00 Lot 10 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 Lot 11 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 12 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 13 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot 14 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot lS 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot 16 2,222.34 3,970.23 7,976.87 l ,S07 .03 2,084.60 948.94 $18,710.00 Lot 17 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 18 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 19 2,222.34 3,970.23 7,976.87 1,S07 .03 2,084.60 948.94 $18,710.00 Lot20 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot 21 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot22 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 23 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 Lot 24 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot 2S 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 Lot26 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 Block 2 Lot 1 Platted Drainage Easement/Common Area Platted Drainage Easement/Common Area Lot2 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot3 2,222.34 3,970.23 7,976.87 1,S07 .03 2,084.60 948.94 $18,710.00 Lot4 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,7 10.00 Lot S 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot6 2,222.34 3,970.23 7,976.87 1,S07.03 2,084.60 948.94 $18,710.00 Lot 7 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot8 2,222.34 3,970.23 7,976.87 l ,S07 .03 2,084.60 948.94 $18,710.00 Lot9 2,222.34 3,970.23 7,976.87 l ,S07.03 2,084.60 948.94 $18,710.00 Lot 10 2,222.34 3,970.23 7,976.87 l,S07.03 2,084.60 948.94 $18,710.00 9 Petition 4380 River Trail 2"d Addition to the City of Salina Lot 11 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 12 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 13 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 14 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 15 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 16 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 17 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 18 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 19 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Lot 20 2,222.34 3,970.23 7,976.87 1,507.03 2,084.60 948.94 $18,710.00 Total $91,115.84 $162, 779 .57 $327 ,051.50 $61 ,788.08 $85,468.52 $38,906.64 $767,110.15 tThe values in the table above reflects the 75% of the total value of the individual improvements divided by the number of buildable lots in the benefit district. 10 CITY OF SALINA, KANSAS ***REVISED*** STATEMENT OF FINAL COSTS GRAND PRAIRIE ADDITION PHASE II STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER RESOLUTION NO. 16-7394 CONSTRUCTION COST Construction Cost City Expenses (5%) Total Less Developer's Share (20%) Construction Costs to be Assessed ASSESSMENT AMOUNT Construction Costs to be Assessed Series 2017-I Temporary Notes Interest Series 2017-I Temporary Notes Costs oflssuance Series 2018 Bonds Costs of Issuance Total Project Costs to be Assessed RIVER TRAIL SECOND ADDITION STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER RESOLUTION NO. 16-7365 ***REVISED*** CONSTRUCTION COST Construction Cost -Net Reimbursement to Developer after 25% cost share City Expenses (5% of total construction costs) Total Construction Costs to be Assessed Developer's Cost Share (25%) ASSESSMENT AMOUNT Construction Costs to be Assessed Series 2018 Bonds Costs oflssuance Total Project Costs to be Assessed $385,308.81 19,265.44 $404,574.25 $80,914.85 $323,659.40 $323,659 .40 4,810.89 3,665 .93 5,710.86 $337,847.08 $723,620.07 32,390.08 $756,010.15 $255,602.28 $756,010.15 11,100.00 $767,110.15 ***REVJSED*** ASSESSMENT ROLL CERTIFJCA TION The undersigned having been designated by the City of Salina, Kansas (the "City"), to detem1ine the amounts of the respective assessments and to prepare the proposed ***REVISED*** Assessment Roll therefor in connection with certain internal improvements previously authorized by the governing body hereby reports that each and all of the respective assessments have been detennined to be as shown on Sclledu/e I attached hereto and made a part hereof by reference as though fully set out herein. Dated: l\P'r\ \ I 1 , 2018. CITY OF SALINA, KANSAS J c~~tlYK SCHEDULE/ GRAND PRAIRIE ADDITION PHASE II STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER RESOLUTION N0.16-7394 COLLECTED IN FIFTEEN (15) INSTALLMENTS Description of Property Amount of Proposed Assessment Lot 7, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 8, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 9, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 10, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 11, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 12, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 13, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 14, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 15, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 16, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19 873.36 Lot 17, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 38, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 39, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873 .36 Lot 40, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 41 , Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 42, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19 873.36 TOTAL ASSESSMENTS = $337,847.08 RIVER TRAIL SECOND ADDITION STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER RESOLUTION NO. 16-7365 COLLECTED IN FIFTEEN (15) INSTALLMENTS Description of Property Amount of Proposed Assessment Lot 5, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 6, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 7, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 8, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 9, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot I 0, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 11, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 12, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 13, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 14, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 15, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 16, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18 710.00 Lot 17, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 18, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 19, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 20, Block 1, all in the River Trail 2"d Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 21 , Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 22, Block l, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 23, Block 1, all in the River Trail 2"d Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 24, Block 1, all in the River Trail 2°d Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 25, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 26, Block 1, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 2, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 3, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 4, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 5, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County Kansas $18 710.00 Lot 6, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 7, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County Kansas $18710.00 Lot 8, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 9, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 10, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 11, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 12, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 13, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 14, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 15, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 16, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 17, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 18, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 19, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 TOTAL ASSESSMENTS = $767,110.15 WAIVER OF ASSESSMENT PROCEEDINGS TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: The undersigned property owners (individually, each an "Owner"), are collectively the record titled owners of I 00% of the real estate situated in the City of Salina, Saline County, Kansas (the "City") hereinafter described (the "Property"), liable for special assessment for the costs of constructing the following described improvements (the "Improvements"): River Trail Second Addition -Streets, Drainage, Water System, & Sanitary Sewer Resolution No. 16-7365 The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements"); The installation of approximately 345 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"); The installation of approximately 2,090 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"); and The installation of approximately 2,171 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). The Owner hereby further states that the Owner has received a copy of the Statement of Final Costs and Assessment Roll Certification relating to the Improvements, which have been prepared by or on behalf of the City. After being advised of the Owner's right to a public hearing and other matters related to the Improvements, the Owner hereby agrees and consents to the following: 1. Waiver of formal notice of and the holding of a public hearing by the governing body of the City for the purpose of considering special assessments against the Property; 2. Consent to the levy of special assessments against the Property in the amount of $18,710.00 per Jot (the "Special Assessment") by appropriate proceedings of the governing body of the City; 3. Waiver of the thirty (30) day period after publication of the assessment ordinance of the City to contest the levy of the Special Assessment; and 4. If such special assessments are not prepaid during any period established by the City Commission for the prepayment of the Special Assessment, Owner acknowledges that any unpaid special assessments will be collected in annual installments of fifteen (15) years, together with interest thereon at the rate obtained by the City for its general obligation bonds issued to finance the costs of the Improvements; 5. Consent that the City may immediately proceed to issue its general obligation bonds to finance the costs of the Improvements in accordance with K.S.A. 12-6a01 et seq. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] WAIVER OF ASSESSMENT PROCEEDINGS -RIVER TRAIT, SECOND ADDITION Si!mature ""\ Name: --h -:,I --., I - Title: _/ _ .. , ___ UI / Name: {,~.::,-1/~ \; ,' Title: ' -~ (' _ ·..._/ Ronald L. Hanson Beth E. Hanson Name: -~~~~~~~~ Title: f?re~1At11 t Pronertv Owner KC Development, LLC JC Builders, Inc. Ronald L. & Beth E. Hanson Kelly Dunn Construction, Inc. Salina Area Technical College 2 Property Owned and Liable for Assessment Lots 5-14, 16-18, 20-21, 23 , 25-26 Block 1, and Lots 2, 6-16, 19-20 Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas Lots 15 and 22, Block 1, and Lot 18, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas Lot 19, Block 1, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas Lot 24, Block 1, and Lots 3-4, and 17, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas Lot 5, Block 2, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas I I I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS April 2, 2018 4:00p.m. The City Commission convened at 2:00 p.m. for the Police Department Training Center/Range Facility Tour and Presentation (1960 N. Old Highway 40) and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Karl F. Ryan (presiding), Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS (3.1) The month of April, 2018 as "Fair Housing Month" in the city of Salina. Chris Cadle, Human Relations Commissioner, read the proclamation and announced associated events. (3.2) The month of April, 2018 as "Child Abuse Prevention Month" in the city of Salina. Lori Blake, Child Advocacy and Parenting Services (CAPS) Executive Director, read the proclamation and announced associated events. CmzENS FORUM Judy Larson, Salina, Kansas, provided her thoughts regarding the use of foul language in the community. She continued to provide information regarding a recent experience she was involved in with another individual on the CityGo bus. PuBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of March 26, 2018. (6.2) Authorize Amendment No. 1 to the Loan Agreement between the Kansas Department of Health and Environment, acting on behalf of the State of Kansas, and Salina, Kansas for the purpose of financing improvements to the City's water supply and water distribution system. (6.3) Authorize the Mayor to enter into an agreement for eight (8) wastewater pumps with JCI Industries, Inc. of Lee's Summit, Missouri, in the amount of $113,478. (6.4) Award contract for Ninth Street Tree Removal, Project No. 80016B, to Arbors Masters Tree Service of Wichita, Kansas in the amount of $47,900 with a $2,100 (4.4%) construction contingency. Commissioner Hay requested that Item 6.4 be removed from the consent agenda. Page 1 118-0117 18-0118 I 18-0119 I Moved by Commissioner Davis, seconded by Commissioner Hodges, to approve the consent agenda less item 6.4. Aye: (5). Nay: (0). Motion carried. (6.4) Award contract for Ninth Street Tree Removal, Project No. 800168, to Arbors Masters Tree Service of Wichita, Kansas in the amount of $47,900 with a $2,100 ( 4.4 % ) construction contingency. Commissioner Hay stated there was nearly a $30,000 difference in the engineers estimate and the low bid and asked if staff was comfortable with the low bid. Dan Stack, City Engineer, stated staff had contacted local tree contractors for an estimate of tree removal costs to base the engineers estimate from and stated staff had contacted references for Arbors Masters Tree Service and were happy with the information received. Moved by Commissioner Hay, seconded by Commissioner Davis, to award contract for Ninth Street Tree Removal, Project No. 800168, to Arbors Masters Tree Service of Wichita, Kansas in the amount of $47,900 with a $2,100 (4.4%) construction contingency. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Second reading Ordinance No. 18-10931 authorizing the issuance of Industrial Revenue Bonds for the purpose of providing funds to pay the cost of acquiring, purchasing, constructing, installing, furnishing and equipping commercial hotel facilities for the benefit of Lighthouse Properties III, Inc. Commissioner Hoppock recused himself due to a conflict of interest. Mayor Ryan noted that Ordinance No. 18-10931 was passed on first reading on March 26, 2018 and since that time no comments have been received. Moved by Commissioner Hay, seconded by Commissioner Davis, to adopt Ordinance No. 18- 10931 authorizing the issuance of Industrial Revenue Bonds for the purpose of providing funds to pay the cost of acquiring, purchasing, constructing, installing, furnishing and equipping commercial hotel facilities for the benefit of Lighthouse Properties III, Inc. on second reading. A roll call vote was taken. Aye: (3) Davis, Hay, Ryan. Nay: (1) Hodges. Motion carried. Commissioner Hoppock returned to the meeting. (7.2) 2017 Special Assessment Projects (7.2a) Certification of final costs for 2017 special assessment projects and set April 23, 2018 as the date of public hearing. (7.2b) First reading Ordinance No. 18-10932. Mayor Ryan stated that he had a statutory conflict of interest with Kelly Dunn Construction and due to the agenda item being an administrative item and did not involve a contract; he felt he could participate in the discussion and vote today. Greg Bengtson, City Attorney, explained the statutory conflict and stated Mayor Ryan could participate in the discussion if he wished. Dan Stack, City Engineer, explained the projects, assessment costs and action options. Mayor Ryan asked for clarification on the note at the bottom of the Statement of Final Costs pertaining to the actual costs for the River Trail Second Addition project. Mr. Stack stated Page 2 I I I "' "' 18-0120 18-0121 the developer costs were higher than anticipated and the maximum amoWlt in the development agreement was due to unforeseen improvements. He continued to state there were two (2) lots sold and the developer could get a waiver from the new property owners and ultimately request through the City Commission to ask for the maximum amount to be increased to cover the additional costs. Commissioner Hodges asked how many lots were still remaining in Phase 1 of Grand Prairie. Mr. Stack stated four (4) lots were remaining to be sold. Commissioner Hodges asked at what point did the land valuation move from an agricultural valuation to a residential lot valuation. Jason Gage, City Manager, stated the valuation change did not have a lot to do with the City of Salina's process but he thought once the property was developed on, the valuation would change to a residential lot valuation. Michael Schrage, Deputy City Manager, stated a change would be affective on January 151 of a given year, he continued to state that the Saline County Appraiser's office would check the stage of development of a property to determine the valuation change. Commissioner Hodges asked how many lots were in Phase 2 of Grand Prairie. Mr. Stack stated 17. Commissioner Hodges asked when street maintenance was performed last on Phase 1 of Grand Prairie. Mr. Stack stated the street was microsurfaced last year. Commissioner Hodges asked how old the first phase of River Trail development was. Wayne Nelson, Civil Engineer II, stated the River Trail development was developed in five (5) phases with the first phase in 1998. Commissioner Hodges asked if the condition of the streets in the River Trail development was in an expected condition based on when it was put in. Mr. Stack stated the street was on the list to be crack sealed and microsurfaced this year. A conversation ensued between Commissioner Hodges, Mr. Stack and Mr. Schrage regarding the valuation of properties. Commissioner Hodges provided her thoughts on the timing for the valuation change on newly developed properties. Mr. Gage stated staff could look at the timing for the valuation change and see if anything could be done. Commissioner Hodges asked if soil testing and construction audits were still taking place for new developments. Mr. Stack stated soil testing was still being completed and staff had looked at valuating asphalt versus concrete for streets. Commissioner Hodges provided her thoughts on the condition of the streets. Moved by Commissioner Hoppock, seconded by Commissioner Hay, to certify the final costs for the 2017 Special Assessment Projects and set the Special Assessment public hearing date for April 23, 2018. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Hoppock, seconded by Commissioner Hay, to pass Ordinance No. 18- 10932 on first reading. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTIIER BUSINESS Page 3 I I I Ill Ill 18-0122 Judy Larson, Salina, Kansas, provided additional thoughts on the use of foul language in the community. Commissioner Hodges thanked Jason Gage, City Manager, for sharing an article titled "The Abilene Paradox". She continued to thank Mr. Gage for encouraging the Commission to call a time out if they would need one on a specific agenda item. She continued to ask for guidance for the appropriate way to start the conversations for a time out process. Jason Gage, City Manager, stated it would depend on the topic and staff could assist the Commission in determining the steps to take. ADJOURNMENT Moved by Commissioner Hay, seconded by Commissioner Davis, that the regular meeting of the Board of City Conunissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 4:29 p.m. [SEAL] ATIE.5T: ~/)j~ Shandi Wicks, CMC, City Clerk Trent W. Davis, M.D., Vice-l\fayor Page4 Publisher's Affidavit I, --~Cb......,a .. ·sia.,cy,_._f61in,..k:a..-___ , being duJy sworn declare that J am a lqal CoouUoator of THE SAUNA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county. which newspaper has ~n admitted to the mails as second class matter in said county, and continuously and uninterruptedly publishe4 for five consecutive years prior to first publication of attached notice, and that the ReMJJution 16-7394, 7365 Notice has been correctly published in the entire issue of said newspaper one time, publication being g i\'en in the issue of April 9, \ Subscribed and sworn to before me, this day of -~--·...__-___ _ A.D.20 fi_ Printer's fee $161.00 CERTIJi'JCATE OF MA.ILlNG STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) The undersigned, City Treasurer of the City of Salina, Kansas (the "City"), does hereby certify that on April 9, 2018, I caused to be mailed to each and all of the owners of property affected thereby, at their last known post office address, a Notice of Public Hearing and Statement of the Cost Proposed to be Assessed in connection with certain improvements in the City. A sample copy of the form of such Notice of Hearing and Statement of Cost Proposed to be Assessed is attached hereto. SS my hand and seal as of /) 9~! , 2018. ~~ Debbie Pack, City Treasurer {attach sample copy of fonn] NOTICE OF HEARING AND STATEMENT OF COST PROPOSED TO BE ASSESSED April 6, 2018 Shawn & Kristi Carlson 112 Stratford Ct Garden City, KS 67846-9682 Property Owner: You are hereby notified, as owner of record of a portion of the property described below, that there is proposed to be assessed against the property, certain amounts for the costs of the following internal improvements (the "Improvements") previously authorized by the governing body of the City of Salina, Kansas (the "City"): Grand Prairie Addition Phase II -Streets, Drainage, Water System, & Sanitary Sewer Resolution No. 16-7394 The curb, gutter, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"); The installation of approximately 56 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"); The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"); and The installation of approximately 1, 165 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). Property Description: Lots 7 through 17 and Lots 38 through 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and Cost of Improvements: After allocating 20% of the construction costs to be paid by the Developer, the total costs of the Improvements to be assessed against the property in the Improvement District is $337,847.08. The proposed amount of assessment against each lot in this improvement district is $19,873.36. You are hereby further notified that the governing body of the City will meet on April 23 , 2018, at 4:00 p.m., in the City Commission chambers of the City-County Building, 300 W. Ash Street, Room 107, Salina, Kansas, for the purpose of considering the proposed assessments. The installation of approximately 2,090 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"); and The installation of approximately 2,171 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). Property Description: Lots 5 through 26, Block 1; Lots 2 through 20, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas. Cost of Improvements: After allocating 25% of the construction costs to be paid by the Developer, the total costs of the Improvements to be assessed against the property in the Improvement District is $718,885.58. An Assessment Roll prepared in accordance with the referenced Resolution(s) approved by the governing body is on file in the Office of the City Clerk and may be examined by any interested party. At the conclusion of the public hearing, the governing body will consider an Ordinance levying such special assessments. Debbie Pack City of Salina Director of Finance/ Administration I 18-0140 I I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS April 23, 2018 4:00p.m. The City Commission convened at 1:00 p.m. for the Karen M Graves Plaza Dedication at Tony's Pizza Event Center, 2:30 p.m. for Development Group: Special Assessments Discussion and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Karl F. Ryan (presiding), Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi \'\7icks, City Oerk. AWARDS AND PROCLAMATIONS Mayor Ryan noted that Item No. 3.3 would be added to the agenda for the Arbor Day proclamation. Moved by Commissioner Davis, seconded by Commissioner Hay, to add Agenda Item 3.3 for the Arbor Day proclamation. Aye: (5). Nay: (0). Motion carried. (3.1) The day of April 28, 2018 as "Multiple Sclerosis Awareness Day" in the city of Salina. Dean Atteberry read the proclamation and announced associated events. (3.2) Presentation of the AAA Community Traffic Safety Award to the Salina Police Department by Shawn Steward with AAA Kansas. Shawn Steward provided information about the award and presented the award to Chief Brad Nelson and Sgt. Brent Rupert. (3.3) The day of April 27, 2018 as" Arbor Day" in the city of Salina. Chris Cotten, Director of Parks & Recreation, read the proclamation. CmZEs"IJS FORUM None. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public hearing on the 2017 special assessment projects. (5.la) Second reading Ordinance No. 18-10932 levying special assessments for infrastructure improvements. Mayor Ryan opened the public hearing. Dan Stack, City Engineer, explained the projects, total costs and funding. There being no further comments the public hearing was closed. Page 1 118--0141 I I z c. w c .a r: Cl) I Ii 8 18-0142 18-0143 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to adopt Ordinance No. 18-10932 levying special assessments for infrastructure improvements on second reading. A roll call vote was taken. Aye: (5) Davis, Hay, Hodges, Hoppock, Ryan. Nay: (0). Motion carried. CONSE.'\'T AGENDA (6.1) Approve the minutes of April 16, 2018. (6.2} Award contract for 91h Street Curb & Gutter Improvements, Project No. 80016, to Bryant and Bryant Construction, Inc. in the amount of $586,430 with a 5% construction contingency ($29,321.50). (6.3) Award contract for Parking Lot Entrance Repairs/Sidewalk Ramps, Project No. 80010, to Lancaster Construction of Salina in the amount of $31,770.22 with an $8,739.70 contingency. (6.4) Authorize the Mayor to execute a public utility easement granting a 10 foot utility easement across the south 10 feet of a public parking lot located on Lot 156 on Fifth Street in the Original Town of Salina and to accept the offered public utility easement dedications from Lighthouse Properties III, Inc. and Blue Beacon International, Inc. related to the downtO\\'n hotel project. Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION {7.1) Resolution No. 18-7550 amending the City of Salina's Slznred Vision Stntemenl and Strategic Plan for 2018. Jason Gage, City Manager, explained the amendments and action options. Commissioner Davis suggested eliminating the wording "In addition, Salina will begin making efforts to be an environmentally friendly community" in Section 2 subsection (i). :Mr. Gage stated the wording was redundant to wording in another section. The Commission reached a consensus to remove the wording. Commissioner Hoppock asked if the Planning Commission had a chance to review the plan and when the annual meeting with Planning and Zoning Commission would occur. Dean Andrew, Director of Planning, stated a date had not been set but the Planning and Zoning Commission would be glad to work with the City Conunission to get a joint time set up for the review of the Comprehensive Plan. The City Commission reached a consensus for Mr. Andrew to work with the Planning Commission to secure a date for the annual meeting. Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 18- 7550 amending the City of Salina's Slzared Vision Statement and Strategic Plan for 2018 with the deletion of the last sentence of Section 2 (i). Aye: (5). Nay: (0). Motion carried. (7.2) Discuss the continued inclusion of the Salina Police Department Training Center project in the 2018-2022 Capital Improvement Plan. Jason Gage, City Manager, explained the project. Chief Nelson showed and explained a presentation regarding the project. Page 2 I I I Mr. Gage provided information on the project, project cost, 2018-2022 Capital Improvement Plan project funding and action options. Commissioner Hodges asked if unbacked bonds required the same reserve for deficit. Mr. Gage stated he would have to ask bond counsel for an answer. Commissioner Hodges asked for staff to explain the ORT process and how staff evaluates the process. Michael Schrage, Deputy City Manager, stated the process was optional but the applicant was asked to describe the project which could include site plans; staff would then review the planning and zoning requirements, describing any needed requirements and then would discuss the building and would wrap up with a submittals list of required documents to have a successful project. Commissioner Hodges provided information on the present location and the cost for utility hookups. Mr. Gage stated the cost estimate provided was for on-site utility hookups and all costs for the utility hookup were to be included in the project budget. Commissioner Hodges provided her thoughts on the timing of the project, the potential for collaboration and the project as a whole. Chief Nelson stated there had been work on the project for three (3) years and explained his conversations with the Kansas Highway Patrol on collaboration for the project. He continued to provide his thoughts on the project. Mr. Gage stated the former Saline County Sheriff took the item to the Saline County Commission in the past and they did not have an interest.in the project. Commissioner Hodges continued to provide her thoughts. Mr. Gage asked if the City Comm.lssion had interest in another entity controlling the facility but allowing the City of Salina to use at the same cost estimated today. Commissioner Davis stated no and provided his thoughts on the project. Commissioner Hay provided his thoughts on the current facility and the need for the project. Commissioner Hay stated there were projects (Former Schilling Air Force Base, County- Wide communications system, etc.) that the cost was unknown. Mr. Gage stated there were some projects with the costs unknO\\'ll. He continued to state the Former Schilling Air Force Base cost should be received in a couple weeks, the County-Wide Communications System project cost should be submitted in 3 to 4 months. Commissioner Hay provided his thoughts on other project costs within the 2018-2022 Capital Improvement Plan. A conversation ensued between the ConunissiOners, regarding the other projects within the 2018-2022 Capital Improvement Plan and the Salina Police Department Training Center project moving forward. Mayor Ryan provided his thoughts on the project moving forward and future collaboration for the facility. Commissioner Hop pock asked if a construction manager would still be looked at for the facility. Mr. Gage stated yes at approximately 5%. Conunissioner Hoppock asked what the land acquisition would be. Mr. Gage stated until the decision was made to move forward, he did not want to state the amount. Commissioner Hoppock asked how the utilities would be handled. Mr. Gage stated the Page 3 I I I utilities would be available to be hooked up at the location. Commissioner Hoppock asked how much the simulator would cost. Chief Nelson s.tated approximately $250,000. A conversation ensued between the Commission, Mr. Gage and Chief Nelson on the location of the simulator. Mr. Gage asked if the City Commission would like staff to create an agenda item to bring back to the Commission to allov" for solicitation of private donations for the facility. Commissioner Hoppock asked hm·" Chief Nelson would prioritize the two projects (Salina Police Department Training Center and the county-wide communication system). Chief Nelson stated it was a difficult question but he would have to say the Salina Police Department Training Center project. Darrell Wilson, 613 Oakdale Drive, provided his thoughts on the current facility and the need for a new facility . Mike Marshall, Salina, former employee of the Salina Police Department, provided his thoughts on the use of a public facility and the need for a new facility. Chris Trocheck, Salina, former employee of the Salina Police Department, provided information on his duty in training of officers as a firearms instructor and his thoughts on the need for a ne\-\1 facility. Ron Styles, retired Lieutenant of the Salina Police Department, provided his thoughts on the need for properly trained officers. Luci Larson, Salina, provided her thoughts on the current facility, the struggle to have a full staff at the police department, other important projects in the community and the need for a new facility to store vehicles and ammunition. Carolyn Peterson, Salina, provided her thoughts on the sense of urgency for the project and the need for the facility. Representative J.R. Oaeys, 69lh District, stated he supported the law enforcement training center, he continued to provide information on the process of the Kansas Highway Patrol budget and stated there was interest in a training facility and range with collaboration with the Salina Police Department. Commissioner Hay asked what type of timeframe would it be. Representative Claeys stated the project would need to be developed this summer with funding request to be reviewed for approval next year. Chief Nelson stated the need for the facility to be larger to accommodate both the Salina Police Department and the Kansas Highway Patrol. A conversation ensued between the Commission and Chief Nelson regarding the Jook of the new facility if a collaboration occurred with the Kansas Highway Patrol. Commissioner Hodges asked when the project appeared in the Capital Improvement Plan. Chief Nelson stated in 2016 as unfunded, then was added to the 5-year Capital Improvement Plan. Commissioner Hodges asked if the project would be completed in the 5-year cycle or if the project would be completed in the next year. Mr. Gage stated if the project was on a certain year, there was expectation that the project occur in that year. Commissioner Hoppock asked how the project would be fWlded. Mr. Gage stated through Page 4 I I I general obligation bonds. Commissioner Hodges thanked Representative Claeys for his attendance at the meeting. Representative Claeys provided additional information on options available in the future for collaborations on projects between the State of Kansas and the City of Salina. Commissioner Hay asked if there was a chance for the Kansas Highway Patrol to buy into the project. Mr. Gage stated there \'\'ere several ways to partner on a project; interlocal agreements or user pay agreements. A conversation ensued between Commissioner Hay and Mr. Gage regarding partnerships with other entities. Chief Nelson provided information on the reason why the range was designed with outside lanes. Jon Blanchard, 1117 State Street, stated how necessary the new facility was and thanked the commission for the full review of the project. He stated if the facility were to move to a location other than the current facility, it be in close proximity of the police station and asked how was the location logistically worth operationally and if there were any environmental needs for the possible new location. He continued to provide his thoughts on the project. Commissioner Davis provided his thoughts on the training center project and how collaborations with Saline County might occur. Commissioner Hodges asked if productive conversations could happen between now and January, 2019. Representative Claeys stated yes, he thought a meeting could happen. Commissioner Davis asked if Chief Nelson's meetings with the Kansas Highway Patrol were in regards to collaboration and interest in a new facility. Chief Nelson stated he had two (2) meetings with the Kansas Highway Patrol regarding collaboration and was told the Kansas Highway Patrol was not interested in a new facility. A conversation ensued betv.1een the Commission and Chief Nelson regarding the project and possible collaboration on the training center. Commissioner Hay provided his thoughts on possible collaborations with the Kansas Highway Patrol. Mayor Ryan provided his thoughts on possible collaborations with other entities including the Kansas Highway Patrol and Saline County. Mr. Gage stated he had conversations with Cornell Weber with the Kansas Highway Patrol regarding a training center and Cornell Weber did not have any interest in a new training center. He continued to provide information on the delays of the project if there would be collaboration with other entities. A conversation continued to ensue between the Commission, Chief Nelson and Mr. Gage regarding possible collaborations with other entities. Commissioner Hoppock provided his thoughts on the project · and the funding of the project. Commissioner Hoppock asked if the countrvide communication system could be moved out a year. Mr. Gage stated he would have to check into that. Commissioner Hoppock continued to provide his thoughts on collaboration with the Kansas Highway Patrol. Page 5 I 118-0144 . , 18--0145 Commissioner Hoppock asked if there was a way to put a ceiling on the project when it went out to bid. Mr. Gage stated the budget could always be re-established and the project go back out for bid but it would probably be in the following year. Commissioner Hodges asked how the new location would affect the department's response time. Chief Nelson stated the current facility location was close in proximity to the department's offices. He continued to state the proposed facility would be in far south Salina but the employees would be in training and not on as active duty. Commissioner Hodges asked about potential environmental effects on the project located in south Salina. Mr. Gage stated that there was a potential for environmental effects but the effects would be reviewed by the designer. Mr. Schrage provided additional information regarding the possible environmental effects. Commissioner Hodges asked if the Commission was interested in looking at a collaboration with the Kansas Highway Patrol. Mayor Ryan stated yes. Commissioner Davis stated no and provided his thoughts. Commissioner Hay stated he would like to see a collaboration but did not want the project construction delayed. Chief Nelson stated there were some add alternates that could be added to the project at a later time. Commissioner Hoppock asked if the Commission took no action would that leave the project in the capital improvement plan as it was currently listed. Mr. Gage stated yes, but staff would need to know if the Commission would like staff to take a specific direction. Moved by Commissioner Davis, seconded by Commissioner Hoppock, to take no action. A conversation ensued between the Conunission and Mr. Gage regarding the current project path and possible collaborations. Commissioner Hay asked if the construction cost could be trimmed down if the project was moving forward. Mr. Gage stated yes, the construction cost could be reduced and it would be best for staff to have the information tonight. He continued to state it would be helpful for staff and the bidders to know if the budget was adjusted. Commissioner Hay asked how the Commission would determine what the adjusted budget might be. Mr. Gage stated it was difficult and he would not go below $4 million. A conversation ensued between the Commission and Mr. Gage regarding the budget adjustment and the alternates of the project. Commissioner Hoppock asked if the motion would need to be amended. Mr. Gage stated there was not typically a motion to take no action and explained the action options. Greg Bengtson, City Attorney, stated the withdrawal might be the best way to clean the slate. Commissioner Davis withdrew his motion and Commissioner Hoppock withdrew his second. Moved by Commissioner Davis, seconded by Commissioner Hoppock, to preserve the current 5- year Capital Improvement Plan project status for the Police Department Training Center with all remaining project costs not to exceed $4.5 million dollars and to ask staff to work with the designer to provide alternate bid items. Page 6 118-0146 Commissioner Hodges provided her thoughts on the motion. Commissioner Hay provided his thoughts on the project waiting until 2020. Mayor Ryan called the question. Aye: (3). Nay: (2) Hodges, Ryan. Motion carried. Mayor Ryan called for a 10 minute break at 7:15 pm. The City Commission reconvened at 7:25 p.m. DEVELOPMENT BUSINESS (8.1) First reading Ordinance No. 18-10933 amending Chapter 35, Article XII, Sections 35- 261, 35-262, 35-264, 35-266 and 35-270 to clarify the rights and responsibilities under Sidewalk Caf~ License Agreements approved in the downt0\.\'11 area. Dean Andrew, Director of Planning, explained the amendments and action options. Commissioner Hoppock asked why the hours were 9pm and 10 pm for beverages to be served on the sidewalk. Mr. Andrew stated he thought it was the preference of the commission at the time. Commissioner Hoppock provided his thoughts on the time and would be in favor of changing it. Commissioner Hoppock asked why the area was Hm.ited to 200 square feet. Mr. Andrew stated the language allowed for a larger area to be approved by way of petition. Commissioner Hoppock asked if the ordinance modification had to go to the Planning Commission first. Mr. Andrew stated any modification could be approved by the City Commission. Mr. Andrew stated he did not know if the city manager was aware why the time limit was established. Jason Gage, City Manager, stated he did not know if the time was limited due to the loft living. Michael Schrage, Deputy City Manager, stated the retail sale of alcohol was allowed from 9:00 a.m. to 10:00 p.m. but the sale of alcohol at an establishment was allowed from 9 am to 2 am. Commissioner Davis asked how close the 200 square foot area was allowed to the curb. Mr. Andrew stated a minimum dear zone between the sidewalk and the curb of 8 foot must be maintained. Mayor Ryan asked what the fencing would look like. Mr. Andrew stated a wrought iron fence would be used for the area. Commissioner Hodges asked that the time be changed to 12:00 a.m. instead of 2:00 a.rn. Mr. Andrew asked if the commission wanted to change the limit of hours of sales in Section 35-268 (4) b to midnight. The consensus was yes. Commissioner Hodges asked if the dlanges were made to the fac;ade program guidelines to include any non-permanent items only to be funded as part of a larger project and complimentary to primary, fixed improvements. Penny Bettles, Salina Downtovm, Inc. Director explained that the guidelines were updated and provided to the City Oerk. Moved by Commissioner Hodges, seconded by Commissioner Hay, to pass Ordinance No. 18- 10933 amending Chapter 35, Article XII, Sections 35-261, 35-262, 35-264, 35-266, 35-268 and 35-270 to clarify the rights and responsibilities under Sidewalk Cafe License Agreements approved in the downtown area with the addition of a change to the language in Section 35-268 (4) to allow Page 7 I I z ... w .. i l1 I u 18-0147 18-0148 I alcoholic beverages to be served in sidewalk dining areas until midnight instead of 10:00 p.m., on first reading. Aye: (5). Nay: (0). Motion carried. OTHER BUSINESS Jason Gage, City Manager, stated Commissioner Hay asked for an update on the recycling center. Jim Kowach, Director of Public Works, stated the air, soil and water samplings \-\•ere completed a couple weeks ago. He continued to state staff received the air and soil samples back, the air samples were okay but the soil samples had to be redone and staff was awaiting the results. He also stated staff was hoping for the results in a couple weeks. He additionally stated it looked like the facility would open in late May. Greg Bengtson, City Attorney, stated there was a prospect of action after the executive session. (9.1) Request for executive session (legal). I move the city commission recess into executive session for _ minutes to discuss with legal counsel the subject of the City's legal course of action in response to the decision of the Court of Appeals in the road annexation case based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to K.S.A. 45-7319(b)(2). The open meeting will resume in this room at p.m. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to recess into executive session for 10 minutes to discuss with legal counsel the subject of the City's legal course of action in response to the decision of the Court of Appeals in the road annexation case based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45-7319(b)(2). The open meeting will resume in this room at 7:58 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 7:48 p.m. and reconvened at 7:58 p.m. No action was taken. ADJOURNMEl\'T Moved by Commissioner Hay, seconded by Commissioner Hodges, that the regular meeting of the Board of City Conunissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 7:59 p.m. [SEAL] AITFST: ~·a]~ Shandi Wicks, CMC, City Clerk Karl F. Ryan, Mayor Page 8 I I I z D. w (Summary published in The Salina Journal on April 30, 2018) (Posted on the City of Salina website from April 24 to Mav 8. 2018) ORDINANCE NO. 18-10932 AN ORDINANCE LEVYING SPECIAL ASSESSMENTS ON CERTAIN PROPERTY TO PAY THE COSTS OF INTERNAL IMPROVEMENTS IN THE CITY OF SALINA, KANSAS; PROVIDING FOR THE COLLECTION OF SUCH SPECIAL ASSESSMENTS; AND T AKL~G OTHER RELATED ACTIONS IN CONNECTION WITH SUCH IMPROVEMENTS. . WHEREAS, the governing body of the City of Salina, Kansas (the "City") has previously authorized certain internal improvements (the "Improvements") to be constructed pursuant to K.S.A. l 2-6a0 I er seq. (the "Act"); and WHEREAS, the governing body on this date has conducted a public hearing in accordance with the Act related to the Grand Prairie Addition Phase II improvement district, as further described below, and desires to levy assessments on certain property benefited by the construction of such Improvements; and . WHEREAS, on April 16, 2018, the governing body received a waiver of public hearing and right to protest the levy of special assessment from the owners of I 00% of the property liable for assessment for the cost of the Improvements related to River Trail Second Addition, as further described below, and desires t~ levy assessments on certain property benefited by the construction of such Improvements. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY, OF SALINA, KANSAS: Section 1. Levy of Assessments. For the purpose of paying the costs of the following described Improvements: Grand Prairie Addition Phase ll -Streets, Drainage, Water System, & Sanitary Sewer Resolution No. 16-7394 The curb, guner, pavement and grading for approximately 1,070 lineal feet of Bentgrass Drive (the "Street Improvements"); The installation of approximately 56 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"); The installation of approximately 49 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the ••water System Improvements"); The installation of approximately I, 165 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"); River Trail Second Addition -Streets, Drainage, Water System, & Sanitary Sewer Resolution No. 16·7365 I I I The curb, gutter, pavement and grading for approximately 2,297 lineal feet of Saddlebrook Drive, Murray Lane, River Trail Road, Michael Circle, and Meredith Circle (the "Street Improvements"); The installation of approximately 345 lineal feet of storm sewer pipe, inlets, and all appurtenances thereto (the "Drainage Improvements"); The installation of approximately 2,090 lineal feet of six.inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"); The installation of approximately 2, 171 lineal feet of eight·inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitar)' Sewer Improvements"); there are hereby levied and assessed the amounts (with such clerical or administrative amendments thereto as may be approved by the City Attorney) against the property described on Exhibit A attached hereto. Section 2. Payment of Assessments. The amounts so levied and assessed in Section 1 hereof shall be due and payable from and after the date of publication of this Ordinance. Such amounts may be paid in whole or in part within thirty (30) days from the date of publication of this Ordinance. Section 3. Notification. The City Clerk shall notify the' owners of the properties described in Exhibit A attached hereto (insofar as known to the City Clerk) of the amounts of their respective assessments. The notice shall also state that unless such assessments are paid within thirty (30) days from the date of publication of this Ordinance, bonds wilJ be issued therefor, and the amount of such assessment will be collected in installments with interest. Section 4. Certification. Any amount of special assessments not paid within the time prescribed in Sectio1t 2 hereof shall be certified by the City Clerk to the Clerk of Saline County, Kansas, in the same manner and at the same time as other taxes are certified and will be collected in annual installments over fifteen ( 15) years, together with interest on such amounts at a rate not exceeding the ma.ximum rate therefor as prescribed by the Act. Interest on the assessed amount remaining unpaid between the effective date of this Ordinance and the date the first installment is payable, but not less than the amount of interest due during the coming year on any outstanding bonds issued to finance the Improvements, shall be added to the first installment. The interest for one year on all unpaid installments shall be added to each subsequent installment until paid. Section 5. Reimbursement to Developer for River Trail Second Addition Improvements. Pursuant to Resolution No. 16-7365, the governing body approved and the Mayor executed that certain Improvement District Devel_opment Agreement dated as of August 29, 2016 (the "Development Agreement") between KC Development, LLC (the "Developer") and the City. Nor\vithstanding the terms of the Development Agreement, the governing body hereby approves reimbursement to the Developer in the amount of $723,620.07, which amount represents the actual total eligible costs of the Improvements (as defined in the Development Agreement) less 25% of the City's actual expenses and bond issuance costs. 2 I I I "' "' Section 6. Effecti\'e Date. This Ordinance shall take effect and be in force from and after its passage, approval and publication of the Ordinance or a summary thereof once in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 I .:ll i ... w 2 ~ ~ ., ;R ~ I I PASSED by the governing body of the City on April 23 , 20 l 8 and signed and APPROVED Ai'\D Sl~NED by the Mayor. (SEAL) ATTEST: Shandi Wicks, CMC, City Clerk (Signature Page to Assessment Ordinance) I EXHIBIT A GRAND PRAIRJE ADDITION PHASE II STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER "' RESOLUTION NO. 16-7394 "' i COLLECTED IN FIFTEEN (15) INSTALLMENTS ~ w ~ Description of Property Amount of Proposed .(! i Assessment ;;; J Lot 7, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 8, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 9, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot I 0, Block 2, all in the Grand Prairie Addition, City of Salina, Saline Count\', Kansas $19,873.36 Lot 11 , Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 12, Block 2, all in the Grand Prairie Addition, City of Salina, Saline Countv, Kansas $19,873 .36 Lot 13, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 I Lot 14, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 15, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 16, Block 2, all in the Grand Prairie A.ddition, City of Salina, Saline County, Kansas $19,873.36 Lot 17, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 38, Block 2, all in the Grand Prairie Addition, City of Salina, Saline Countv, Kansas $19,873.36 Lot 39, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 40, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 Lot 41 , Block 2, all in the Grand Prairie Addition, City of Salina, Saline Countv, Kansas $19,873 .36 Lot 42, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873 .36 Lot 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas $19,873.36 TOT AL ASSESSMENTS = $337,847.08 I A-1 I RIVER TRAIL SECOND ADDITION STREETS, DRAINAGE, WATER SYSTEM, & SANITARY SEWER RESOLUTION N0.16-7365 COLLECTED L'I' FIFTEEN (15) L'l'STALLMENTS "' "' z Description of Property Amount of Proposed "-w "' Assessment .E Lot 5, Block 1, all in the River Trail 21Hl Addition, City of Salina, li IJ} ~ Saline County, Kansas $18,710.00 ;i Lot 6, Block I, all in the River Trail 21"' Addition, City of Salina, ~ c Saline Count\', Kansas $18,710.00 8 Lot 7, Block 1, all in the River Trail 2Dd Addition, City of Salina, Saline County, Kansas $18, 710.00 Lot 8, Block 1, all in the River Trail 21111 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 9, Block 1, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot l 0, Block I, all in the River Trail t 10 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 11, Block I, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 12, Block I, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 I Lot 13, Block 1, all in the River Trail 2no Addition, City of Salina, Saline County. Kansas SI 8,710.00 Lot 14, Block 1, all in the River Trail 200 Addition, City of Salina, Saline Counrv, Kansas $18,710.00 Lot 15, Block 1, all in the River Trail 2nc1 Addition, City of Salina, Saline Countv, Kansas $18,710.00 Lot 16, Block 1, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 17, Block l, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 18, Block I, all in the River Trail 2no Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 19, Block I, all in the River Trail 2na Addition, City of Salina, Saline County, Kansas SJ 8,710.00 Lot 20, Block I, all in the River Trail 200 Addition, City of Salina, Saline Count\', Kansas $18,710.00 Lot 21, Block I, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 22, Block I, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas SI 8, 710.00 Lot 23, Block I, all in the River Trail 2n° Addition, City of Salina, Saline County, Kansas SJ8,710.00 Lot 24, Block I, all in the River Trail 2na Addition, City of Salina,· I Saline County, Kansas $18.710.00 Lot 25, Block I, all in the River Trail 200 Addition, City of Salina, Saline Countv, Kansas $18,710.00 Lot 26, Block I, all in the River Trail 2nd Addition, City of Salina, $18,710.00 A-2 I Saline County, Kansas Lot 2, Block 2, all in the River Trail 2na Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 3, Block 2, all in the River Trail 2Dd Addition, City of Salina, :ll Saline County, Kansas $18, 710.00 z Lot 4, Block 2, all in the River Trail 200 Addition, City of Salina, 0.. w Saline County, Kansas $18,710.00 .. s Lot 5, Block 2, all in the River Trail 200 Addition, City of Salina, ii "! .,, Saline County, Kansas $18,710.00 " a i Lot 6, Block 2, all in the River Trail 2"" Addition, City of Salina, 8 Saline County, Kansas $18,710.00 Lot 7, Block 2, all in the River Trail 2nc1 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 8, Block 2, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 9, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 10, Block 2, all in the River Trail 200 Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 11 , Block 2, all in the River Trail 2na Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 12, Block 2, all in the River Trail 2°0 Addition, City of Salina, Saline County, Kansas $18, 710.00 I Lot 13, Block 2, all in the River Trail 2°d Addition, City of Salina, Saline Counn', Kansas $18,710.00 Lot 14, Block 2, all in the River Trail 2°d Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 15, Block 2, all in the River Trail 2Dd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 16, Block 2, all in the River Trail 2no Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 17, Block 2, all in the River Trail 2no Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 18, Block 2, all in the River Trail 2nd Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 19, Block 2, all in the River Trail 2na Addition, City of Salina, Saline County, Kansas $18,710.00 Lot 20, Block 2, all in the River Trail 2n<1 Addition, City of Salina, Saline Count\', Kansas $18,7IO.OO TOTAL ASSESSMENTS= $767,110.15 I A-3 I I I 2 0. w (Published in the Solina Journal on April 30, 20 I 8) SUMMARY OF ORDINANCE NO. 18-10932 On April 23, 20 J 8, the governing body of the City of Salina, Kansas, passed an ordinance entitled: AN ORDINAJ~CE LEVYING SPECIAL ASSESSMENTS ON CERTAIN PROPERTY TO PAY THE COSTS OF L~TERNAL IMPROVEMENTS Th' THE CITY OF SALINA, KANSAS; AND PROVIDING FOR THE COLLECTION OF SUCH SPECIAL ASSESSME1'"TS. The Ordinance levies special assessments on certain property located in Grand Prairie Addition and River Trail Second Addition, which have been benefitted from certain internal improvements constructed pursuant to K.S.A. I 2-6a0 I et seq. and provides an opportunity for prepayment, in whole or in part, of the special assessments. A schedule of the amounts of the special assessments and the property benefitted are attached to the Ordinance. Any amount of special assessments not paid within the time prescribed in the Ordinance shall be certified by the City Clerk to the Clerk of Saline County, Kansas, in the same manner and at the same time as other taxes are certified and will be collected in annual installments, together with interest on such amounts at a rate not exceeding the maximum rate therefor as prescribed by Jaw. A complete text of the Ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 W . Ash Street, Room I 07, Salina, Kansas. A reproduction of the Ordinance is available for not less than 7 days following the publication date of this Summary at www.salina-ks.gov. This Summary is hereby certified to be legally accurate and sufficient pursuant to the laws of the State of Kansas. DA TED: April 2!J_, 2018. A-4 Publisher's Affidavit I, __ _.C~hn ... ·.iaJstyl,J...lfi._.,n..,.k ____ , lx>ing duly sworn declare that I am a legal Coordinator of 1HE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuouslr and uninterruptedly published for five consecutive years prior to first publication of attached notice. and that the Ordinance 18-10032 Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of April 30. 2018 Ch.ru:~tL.+ ~ \ Subscribed and sworn to before me, lhi!. I~ day of -'-~-""fm;...;;..;;.;:i ___ _ A.O. 20 j_f._ Lf/~lJ~~ Notary Public Printer's Fee Sill:,S SCANNE~ CERTIFJCA TE OF MArLrnG STATE OF KANSAS ) ) ss: COUNlY OF SALINE ) The undersigned, City Treasurer of the City of Salina, Kansas, does hereby certify that on April 30, 2018, the date on which Ordinance No. 18-10932 (the "Ordinance") of the City was published, I caused to be mailed to the owners of the properties liable for the assessments set out in the Ordinance, at their last known post office addresses, a Notice of Assessment showing the respective assessments levied against their properties and stating the manner in which the assessments will be collected. A sample copy of the form of such Notice of Assessment is attached hereto. WITNESS my hand and seal as of April 30, 2018. -R~Rcb Debbie Pack, City Treasurer [attach sample copy of form] Department of Finance & Administration Debbie Pack, Director 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 City or TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov NOTICE OF ASSESSMENT April 30, 20 I 8 Cornerstone Development Group, LLC PO Box 1481 Salina, KS 67402-1481 Property Owner: You are hereby notified, as owner of record of the following property: Grand Prairie Addition Phase U Property Description: Lots 7 through IO, 15 through 17, Lots 37 through 38, and Lots 41 through 43, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and that according to the notice mailed to you on April 9, 2018 conceming an assessment against the above-described property for the public improvements previously authorized by the governing body of the City and following the meeting held on April 23, 2018 to hear objections to the proposed assessment, the City Commission has adopted Ordinance No. 18-10932 levying assessments in the amount of$ 19,873.36 against this prope11y. You may pay this assessment in whole or in part to the City Treasurer on or before May 30, 2018. If any amounts remain unpaid after May 30, 2018, the City will issue bonds to finance the assessments. The balance of any unpaid assessment will be collected as an assessment against the above-described property, in annual installments levied over fifteen years, together with interest on such amounts at a rate equal to the rate on bonds issued by the City to finance the assessments. Debbie Pack Department of Finance & Administration Debbie Pack, Director 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov NOTICE OF ASSESSMENT April 30, 2018 Stephen Renich Trust 709 S Santa Fe A venue Salina, KS 67401-4944 Property Owner: You are hereby notified, as owner of record of the following property: Grand Prairie Addition Phase II Property Description: Lots 11 through 13 , Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and that according to the notice mailed to you on April 9, 2018 concerning an assessment against the above-described property for the public improvements previously authorized by the governing body of the City and following the meeting held on April 23, 2018 to hear objections to the proposed assessment, the City Commission has adopted Ordinance No. 18-10932 levying assessments in the amount of$ 19,873.36 against this property. You may pay this assessment in whole or in part to the City Treasurer on or before May 30, 20 I 8. If any amounts remain unpaid after May 30, 2018, the City will issue bonds to finance the assessments. The balance of any unpaid assessment will be collected as an assessment against the above-described property, in annual installments levied over fifteen years, together with interest on such amounts at a rate equal to the rate on bonds issued by the City to finance the assessments. Debbie Pack Department of Finance & Administration Debbie Pack, Director 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov NOTICE OF ASSESSMENT April 30, 2018 Shawn & Kristi Carlson 112 Stratford Court Garden City, KS 67846-9682 Property Owner: You are hereby notified, as owner of record of the following property: Grand Prairie Addition Phase II Property Description: Lots 14, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and that according to the notice mailed to you on April 9, 2018 conceming an assessment against the above-described property for the public improvements previously authorized by the governing body of the City and following the meeting held on April 23, 2018 to hear objections to the proposed assessment, the City Commission has adopted Ordinance No. 18-10932 levying assessments in the amount of$ 19,873 .36 against this property. You may pay this assessment in whole or in part to the City Treasurer on or before May 30, 2018. If any amounts remain unpaid after May 30, 2018, the City will issue bonds to finance the assessments. The balance of any unpaid assessment will be collected as an assessment against the above-described property, in annual installments levied over fifteen years, together with interest on such amounts at a rate equal to the rate on bonds issued by the City to finance the assessments. Debbie Pack Department of Finance & Administration Debbie Pack, Director 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov NOTICE OF ASSESSMENT April 30, 2018 Jeremy & Jessica Ryan 4 14 Greystone Drive Salina, KS 6740 I Property Owner: You are hereby notified, as owner ofrecord of the following property: Grand Prairie Addition Phase D Property Description: Lots 39, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and that according to the notice mailed to you on April 9, 2018 concerning an assessment against the above-described property for the public improvements previously authorized by the governing body of the City and following the meeting held on April 23 , 2018 to hear objections to the proposed assessment, the City Commission has adopted Ordinance No. I 8-10932 levying assessments in the amount of$ 19,873.36 against this property. You may pay this assessment in whole or in part to the City Treasurer on or before May 30, 2018. If any amounts remain unpaid after May 30, 201 8, the City will issue bonds to finance the assessments. The balance of any unpaid assessment will be collected as an assessment against the above-described property, in annual installments levied over fifteen years, together with interest on such amounts at a rate equal to the rate on bonds issued by the City to finance the assessments. Debbie Pack Department of Finance & Administration Debbie Pack, Director 300 West Ash Street, Suite 206 P.O. Box 736 Salina, Kansas 67402-0736 Salina TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov NOTICE OF ASSESSMENT April 30, 2018 James Markle 2546 Dundee Lane Salina, KS 67401 Property Owner: You are hereby notified, as owner of record of the following property: Grand Prairie Addition Phase II Property Description: Lot 40, Block 2, all in the Grand Prairie Addition, City of Salina, Saline County, Kansas; and that according to the notice mailed to you on April 9, 2018 concerning an assessment against the above-described property for the public improvements previously authorized by the governing body of the City and following the meeting held on April 23, 2018 to hear objections to the proposed assessment, the City Commission has adopted Ordinance No. 18-10932 levying assessments in the amount of$ 19,873.36 against this property. You may pay this assessment in whole or in part to the City Treasurer on or before May 30, 2018. If any amounts remain unpaid after May 30, 20 I 8, the City will issue bonds to finance the assessments. The balance of any unpaid assessment will be collected as an assessment against the above-described property, in annual installments levied over fifteen years, together with interest on such amounts at a rate equal to the rate on bonds issued by the City to finance the assessments. Debbie Pack CERTIFICATE OF !'lO PROTEST STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) I, City Clerk of the City of Salina, Kansas, do hereby certify that no suit to set aside the assessments levied pW"SUant to Ordinance No. 18-10932 or to otherwise question the validity of the proceedings in connection with the Grand Prairie, Phase JI hnprovement District was brought before the expiration of thirty (30) days :from the publication of Ordinance No. 18-10932 fixing the assessments related to said Improvement D' . CERTIFICATE OF CITY TREASURER ST ATE OF KANSAS ) ss: COUNTY OF SALINE ) The undersigned, City Treasurer of the City of Salina, Kansas (the "City"), does hereby certify that within the time allowed by Ordinance No. 18-10932 of the City for the payment of special assessments in cash, property owners specially assessed for the costs of certain internal improvements previously authorized by the governing body of the City, paid in cash the amounts set forth below: Resolution No. Amount 16-7394 $30,000.00 16-7365 0 TOTAL $30,000.00 WITNESS my hand on ..... /~..2~-tµy ......... ~----· 2018. ~#)cJ-~Treasurer EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON OCTOBER 22, 2018 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Present: Mayor Karl F. Ryan (Presiding), Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppock Absent: The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The matter of providing for the offering for sale of general obligation bonds and general obligation temporary notes came on for consideration and was discussed. Commissioner Hay presented and moved the adoption of a Resolution entitled: RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS AND GENERAL OBLIGATION TEMPORARY NOTES OF THE CITY OF SALINA, KANSAS. Commissioner Davis seconded the motion to adopt the Resolution. Thereupon, the Resolution was read and considered, and, the question being put to a roll call vote, the vote thereon was as follows: Yea: Mayor Karl F. Ryan (Presiding), Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppock Nay: The Mayor declared the Resolution duly adopted; the Clerk designating the same Resolution No. 18-7613. * * * * * * * * * * * * * * (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ************** CERTIFICATE I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the r.,~ governing body of the City of Salina, Kansas, held on the date stated therein, and that a'f. f such proceedings are on file in my office. ~ .. ... ,, • •. 'A. ~ •• • •• ·y_ J..::. / ofl-GANIZ~o\.7 LL.: :'?'. ~J;ALI. 870 : J> t; • t • 1 . -~ fc· --• • ""'-1-< ~\ \ -eo-/.._CJ •4 v-; ••• ••• ...,,~ 0 ·.n •• •• r..: '.J· Ur •••••••• ._-J A ,e.-; ft ,..<'(:~ ~'.-•...) >--::' ,-~ Clerk (Signature Page to Excerpt of Minutes-Sale Resolution) I I I RESOLUTION N0.18-7613 RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS AND GENERAL OBLIGATION TEMPORARY NOTES OF THE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously authorized certain public improvements described as follo\\'S (collectively, the "Improvements'') and desires to fund such Improvements as follows: Project Description Downtown Streetscape Police Training Center Grand Prairie Addition Phase II River Trail Second Addition Beechcraft Road Onlinance/ Resolution No. Ord. 17-10888 Res. 17-7458 Res. 16-7394 Res. 16-7365 Res. I 7-7470 Total: Series 1018-A BoncJ!a $305,058.35 153,728.34 I ,062,638.85 $2,121,425.54 Serifs 1018-2 ~ $8,445,265.79 4,925,729.21 SJJ,370,995.00 Estimated Improvement Fund deposit from bond and note proceeds; excludes costs of issuance. ; and WHEREAS, the Issuer has previously issued the following temporary notes to temporarily finance a portion of the costs of the Improvements (the "Existing Notes''): ; and ~ 2018-1 Dated nm July 30, 2018 Maturity Date December I, 2018 Outstanding Amoupt $6,000,000 WHEREAS, the Issuer proposes to issue its general obligation temporary notes in order to provide cash funds to meet its obligations incurred in connection with constructing certain Improvements prior to the completion thereof and to retire a portion of the Existing Notes; and WHEREAS, the Issuer desires to issue its general obligation bonds in order to permanently finance the costs of certain Improvements that are now compJete and to retire a portion of the Existing Notes; and WHEREAS, the Issuer has selected the firm of George K. Baum & Co., Kansas City, Missouri ("Municipal Advisor"), as Municipal Advisor for one or more series of temporary notes and bonds of the Issuer, and WHEREAS, the Issuer desires to authorize the Municipal Advisor to procee4 with the offering for sale of said temporary notes and bonds and related activities, including the preparation and distribution of a request for proposals for the purchase of general obligation temporary notes; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation temporary notes and general obligation bonds; and I I I z c. "' c: i "' l c Q I.) WHEREAS, the Issuer desires to authorize the Municipal Advisor and Gilmore & Bell, P.C. ("Bond Counsel"), in conjunction with the Clerk, to proceed with the preparation and distribution of a preliminary official statement and notice of sale, and to authorize the distribution thereof and all other preliminary actions necessary to sell said general obligation temporary notes and general obligation bonds; and \\'HEREAS, due to the volatile nature of the municipal bond market and the desire of the Issuer to achieve maximum benefit of timing of the sale of said general obligation temporary notes and general obligation bonds, the governing body of the Issuer desires to authorize the Mayor to confinn the sale of such general obligation temporary notes and general obligation bonds. if nec.essary, prior to the meeting of the governing body of the Issuer to adopt the necessary ordinance and/or resolution providing for the issuance thereof. BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Issuer is hereby authorized to offer for its General Obligation Internal Improvement Bonds, Series 2018-A (the "Bonds") and General Obligation Temporary Notes, Series 2018-2 (the "Notes," and collectively with the Bonds, the "Obligations") all to provide funds to retire the Existing Notes and finance of the costs of the lmpro\'ements. The Mayor is hereby authoriz.ed to award the sale of the Bonds to the subminer of the best proposal as determined pursuant to the provisions of the Notice of SaJe or to reject all proposals; provided. however, that (a) the principal amount of the Bonds shall not exceed $2,200,000 (b) the true interest cost of the Bonds shall not exceed 4.00°/o, (c) the final maturity of the Bonds shall be no later than October I, 2033 with principal payments of the Bonds to begin no earlier than April t, 2019, and (d) the Bonds maturing October J, 2026 and thereafter shall be subject to prepayment on any day on or after October I, 2025. at a price equal to J 00% of the principal amount thereof. The Mayor is hereby authorized to award the sale of the Notes to the submitter of the best proposal as detennined pursuant to the pro\'isions of the Notice of Sale or to reject all proposals; provided, however, that (a) the principal amount of the Notes shall not exceed $14,000,000, (b) the average annual net interest cost of the Notes shall note exceed 3.25%, (c) the final maturity of the Notes shall be no later than December I, 2019, and (d} the Notes shall be subject to prepayment on any day on or after June 1, 2019, at a price equal to 100% of the principal amount thereof. In the event the Mayor is unavailable to award the sale of the Obligations on the sale date, award of the sale of the Obligations pursuant to the tenns of the preceding paragraph may be authorized by the Vice Mayor. All proposals for the purchase of the Obligations shall be delivered to the governing body of the Issuer at its meeting to be held on the date referenced in the Notice of Sale, at which meeting the governing body of the Issuer shall review such proposals and ratify the award of the sale of the Obligations or the rejection of all proposals. Section l. The Mayor, City Manager, Clerk and Finance Director, in conjunction with the Municipal Advisor and Bond Counsel, are hereby authoriz.ed to cause to be prepared a Notice of Sale and Preliminary Official Statement, and such officials and other representatives of the Issuer are hereby authorized to use such documents in connection with the sale of the Obligations, as necessary. Section 3. The City Manager, Clerk and Finance Director, in conjunction with the Municipal Advisor and Bond Counsel, are hereby authorized and directed to give notice of said bond and note sale by distributing copies of the Notice of Sale and Preliminary Official Statement to prospective purchasers of the I I I Obligations. Proposals for the purchase of the Obligations shall be submitted upon the tenns and conditions set forth in the Notice of Sale, and awarded or rejected in the manner set forth in the Notice of Sale and this Resolution. Section 4. For the purpose of enabling the purchaser(s) of the Obligations (the "Purchaser(s)") to comply with the requirements of Rule l Sc2· I 2 of the Securities and Exchange Commission (the .. Rule"), the Mayor, Clerk and/or Finance Director or other appropriate officers of the Issuer are hereby authorized: (a) to approve the fonn of the Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as ExhibiJ A as approval of the Preliminary Official Statement. such official's signature thereon being conc1usive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rutemaking Board; and (c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser(s) to comply with the requirement of the Rule. Section 5. The Issuer agrees to provide to the Purchaser(s) within seven business days of the date of the saJe of the Obligations or within sufficient time to accompany any coofinnation that requests payment from any customer of the Purchaser(s), whichever is earlier, sufficient copies of the final Official Statement to enable the Purchaser(s) to comply with the requirements of the Rule and with the requirements of Rule G· 32 of the Municipal Securities Rulemaking Board. Section 6. The Mayor, Clerk, Finance Director and the other officers and representatives of the Issuer, the Municipal Advisor and Bond Counsel, are hereby authoriz.ed and directed to take such other action as may be necessary to carry out the sale of the Obligations. Such officials are also directed and authorized to make pro,·ision for payment aml'or redemption of the Existing Notes from proceeds of the general obligation temporary notes and/or bonds and other available funds. Section 7, Thjs Resolution shall bejo full force and effect from and after its adoption. [BALANCE OF nns PAGE INTENTIONALLY LEFT BLANK] by the governing body of the Issuer on October 22, 2018. Mayt{-e 1-, *f- Clerk (Signature Page to Sale Resolution) I I I To: EXHIBIT A CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL October 22, 2018 Re: General Obligation Internal Improvement Bonds, Series 2018-A General Obligation Temporary Notes, Series 2018-2 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the .. Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule J 5c2-12(b)(I} of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such infonnation as is pennitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other tenns of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: ------------Title: Finance Director NOTICE OF SALE CITY OF SALINA, KANSAS $13,500,000. GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 $2,160,000" GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Written and electronic (as explained below) bids for the purchase of the above-referenced notes (the "Notes") and bonds (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the undersigned Clerk of the Issuer at the address hereinafter set forth in the case of written bids, and via PARITY® in the case of electronic bids, on November 1, 2018 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 20 I 8-2 Notes Series 20 I 8-A Bonds SUBMITTAL HOUR (Central Time) 12:00 p.m. 1:00 p.m. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon will be acted upon immediately thereafter by the Issuer's Mayor or Vice Mayor. No oral or auction bids will be considered. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist offully registered notes in the denomination of$5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated November 27, 2018 (the "Dated Date"), and will become due on November 15, 2019. The Notes will bear interest from the Dated Date at rates to be determined when the Notes are sold as hereinafter provided, which interest will be payable at maturity or on earlier redemption (the "Interest Payment Date"). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of each Note and the interest thereon will be payable at maturity or earlier redemption to the owners thereof whose names are on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. 'Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. Note Registration. The Notes will be registered pursuant to a plan ofregistration approved by the Issuer and the Attorney General of the State of Kansas. The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Book-Entry-Only System. The Notes shall be initially registered in the name of Cede & Co., as the nominee of OTC and no beneficial owner will receive certificates representing their interests in the Notes. During the term of the Notes, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Notes to OTC or its nominee as the Registered Owner of the Notes, OTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Notes to its participants who shall be responsible for transmitting payments to beneficial owners of the Notes in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by OTC, its participants or persons acting through such participants. In the event that: (a) OTC determines not to continue to act as securities depository for the Notes, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Notes would adversely affect the interests of the beneficial owners of the Notes, the Issuer will discontinue the book-entry-only form of registration with OTC. If the Issuer fails to identify another qualified securities depository to replace OTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Notes in the form of fully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system of registration of the Notes and OTC. Redemption of Notes Prior to Maturity. General. Whenever the Issuer is to select Notes for the purpose of redemption, it will, in the case of Notes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on June 1, 2019, and thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Notice and Effect of Call for Redemption. Unless waived by any owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar and any provider of municipal bond insurance. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by Kansas law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. 2 Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101 et seq. (specifically including K.S.A. I 0-123), K.S.A. 10-620 et seq., K.S.A. 12-631 r et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 65-163u, all as amended, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvements and refunding a portion of certain outstanding general obligation notes. The Notes shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated November 27, 2018 (the "Dated Date"), and will become due in principal installments on October I in the years as follows: Principal Principal Year Amount* Year Amount" 2019 $125,000 2027 $145,000 2020 115,000 2028 150,000 2021 120,000 2029 155,000 2022 125,000 2030 165,000 2023 130,000 2031 170,000 2024 130,000 2032 175,000 2025 135,000 2033 180,000 2026 140,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2019 (the "Interest Payment Dates"). Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. *Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. 3 Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Owners. Book-Entry-Only System. The Bonds will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of OTC and no beneficial owner will receive certificates representing their interests in the Bonds. During the term of the Bonds, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Bonds to OTC or its nominee as the Registered Owner of the Bonds, OTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Bonds to its participants who shall be responsible for transmitting payments to beneficial owners of the Bonds in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by OTC, its participants or persons acting through such participants. In the event that: (a) OTC determines not to continue to act as securities depository for the Bonds, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Bonds would adversely affect the interests of the beneficial owners of the Bonds, the Issuer will discontinue the book-entry-only form of registration with OTC. If the Issuer fails to identify another qualified securities depository to replace OTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and OTC. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose ofredemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, ifless than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October I in the years 2026, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2025, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of I 00% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITY®. Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, ifthe Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar and any provider of municipal bond insurance. In addition, the Issuer shall cause the Bond Registrar to give written notice of 4 redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by Kansas law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security. The Bonds are being issued pursuant to K.S.A. I 0-10 I et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., and K.S.A. 12-6a01 et seq., all as amended, and an ordinance and a resolution adopted by the Governing Body (collectively, the "Bond Resolution") for the purpose of permanently financing the cost of certain public improvements and refunding a portion of certain outstanding general obligation notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain public improvements, and ifnot so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE NOTES AND THE BONDS Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Obligations and the principal amount of any maturity in order to properly size the Obligations based on the required funding needs and offering prices and interest rates bid on the Obligations. Notwithstanding the requirements of the section herein entitled "Establishment of Issue Price," if requested by the Municipal Advisor, the Successful Bidder(s) shall within 20 minutes of such request provide the Municipal Advisor with the initial offering prices of the Obligations to the public so as to allow for proper resizing of the Obligations. The Successful Bidder(s) may not withdraw its bid or change the interest rates bid as a result of any changes made to the principal amount of the Obligations or principal of any maturity as described herein, provided, however, that the total principal amount of the Notes or the Bonds will not be changed by more than 15% without the consent of the Successful Bidder(s). If there is an increase or decrease in the final aggregate principal amount of the Obligations or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder(s) by means of telephone or facsimile transmission, subsequently confirn1ed in writing, no later than 4:00 p.m., Central Time, on the Sale Date. The net production as a percentage of the principal amount of the Obligations generated from the bid(s) of the Successful Bidder(s) will not be decreased as a result of any change in the total principal amount of the Obligations. Submission of Bids. Written bids must be made on forms which may be procured from the Clerk or the Municipal Advisor and shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2018-2" or "Proposal for General Obligation Internal Improvement Bonds, Series 2018-A," as applicable. Written bids submitted by facsimile should not be preceded by a cover sheet and should be sent only once to (785) 309-5738. Confirmation of receipt of facsimile bids may be made by contacting the Municipal Advisor at the number listed below. Electronic bids via PARITY® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. If provisions of this Notice of Sale conflict with those of PARITY®, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date accompanied by the Deposit (as 5 hereinafter defined), which may be submitted separately as described below. The Issuer and Municipal Advisor shall not be responsible for failure of transmission of facsimile or delivery by mail or in person of any bid. PARITY®. Information about the electronic bidding services of PARITY® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) no interest rate may exceed 5.00%; and (c) no supplemental interest payments will be considered. No bid for less than 99.50% of the principal amount of the Notes and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5.00%; (c) no supplemental interest payments will be considered; ( d) each interest rate specified shall be a multiple of I /8 or I /20 of I%; and ( e) no interest rates of zero percent are pennitted. The difference between the highest rate specified and the lowest rate specified cannot exceed 4.00%. No bid for less than I 00% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. For the Obligations: Each bidder shall certify to the Issuer the correctness of the infonnation contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes or the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment of Issue Price" in this Notice. Good Faith Deposit. All Obligations: Each bid for the Obligations shall be accompanied by a good faith deposit (the "Deposit") payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the bidder to comply with the terms of its bid. The amount of the Deposit shall be 2.00% of the principal amount of each respective Obligation. The Deposit may be submitted in either of the following fonns: (a) Certified or Cashier 's Check. Certified or cashier's check drawn on a bank located in the United States of America received by the Issuer or the Municipal Advisor prior to the Submittal Hour; or (b) Wire Transfer. Wire transfer submitted by the Successful Bidder in Federal Reserve funds, immediately available for use by the Issuer not later than 4:00 p.m. applicable Central Time on the Sale Date (wire transfer information may be obtained from the Municipal Advisor at the addresses set forth below). Contemporaneously with the submission of a wire transfer Deposit, such bidder shall send an email to the Issuer and the Municipal Advisor at the email address set forth below, including the following information: (a) notification that a wire transfer has been made; (b) the amount of the wire transfer; and (c) 6 return wire transfer instructions in the event such bid is unsuccessful. Checks submitted for Deposits by unsuccessful bidders will be returned; wire transfer Deposits submitted by unsuccessful bidders will not be accepted or shall be returned in the same manner received on the next business day following the Sale Date. The Issuer reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. No interest on the Deposit will be paid by the Issuer. If a bid is accepted, the Deposit, or the proceeds thereof, will be held by the Issuer until the Successful Bidder has complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder or deducted from the purchase price at the option of the Issuer. If a bid is accepted but the Issuer fails to deliver the Bonds to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder. If a bid is accepted but the bidder defaults in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: The award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, if any, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders are requested to provide a calculation of the TIC for the Bonds on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Municipal Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will be destroyed. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within Kansas with regard to such dispute. The Issuer's acceptance, including electronic acceptance through PARITY®, of the Successful Bidder(s)' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a bond purchase agreement between the Issuer and the Successful Bidder(s) for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-I 2 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal 7 Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Bond Ratings. The outstanding general obligation temporary notes of the Issuer are rated "MIG 1" by Moody's Investors Service and the outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for a rating on the Obligations herein offered for sale. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations. If the Obligations qualify for municipal bond insurance, and any bidder desires to purchase such policy, such indication and the name of the desired insurer must be set forth on the bidder's Official Bid Form. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest bid to the Issuer. If the Successful Bidder(s) elect to purchase the Bonds or Notes with municipal bond insurance, certain rating agencies will assign their ratings to the Bonds or Notes with the understanding that upon delivery of the Bonds or Notes, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy after the award of the Bonds or Notes shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Bonds or Notes. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. All expenses in relation to the assignment and printing of CUSIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about NOVEMBER 27, 2018 (the "Closing Date"), to DTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name of DTC. Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Notes or the Bonds and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each, an "Issue Price Certificate") containing the following for each maturity of the Notes or the Bonds: (I) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said tern1 is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Notes or the Bonds for its own account in a 8 capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Notes or the Bonds for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Municipal Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Notes and the Bonds pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Notes or Bonds from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and ( 4) the Issuer anticipates awarding the sale of the Bonds and/or Notes, as applicable, to the bidder that provides a bid with the lowest NIC or TIC, as applicable, in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Notes or the Bonds as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms (1) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Notes or the Bonds, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Notes and the Bonds, and (2) that it has an established industry reputation for underwriting municipal securities such as the Notes and the Bonds. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. The Successful Bidder(s) shall promptly advise the Issuer on the Sale Date if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder(s) to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise the "hold-the-offering-price" option for determining the issue price of any remaining maturities, the Successful Bidder(s) shall execute and deliver to the Issuer a written acknowledgement specifying the maturities to which "hold-the-offering-price" option shall apply, and the Issuer will apply the initial offering price to the public provided in the bid as the issue price for such maturities. If the Successful Bidder(s) do not exercise the "hold-the-offering-price" option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price/or the Obligations submitted in the bid of the Successful Bidder(s). Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated October 24, 2018, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Municipal Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder(s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32. Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information 9 necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2017 was $481 ,461 ,005. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold but excluding temporary notes to be redeemed with proceeds from the sale of the Obligations, is $73,070,000. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and Kansas income tax matters relating to the interest on the Obligations. Additional Information. Additional information regarding the Obligations may be obtained from the undersigned, or from the Municipal Advisor, at the addresses set forth below: DATED: October 22, 2018. CITY OF SALINA, KANSAS By Shandi Wicks, Clerk Written and Facsimile Bid and Good Faith Deposit Delivery Address: Mike Schrage, Interim City Manager City of Salina, Kansas 300 West Ash Room 202 Salina, Kansas 67402 Phone No.: (785) 309-5700 Fax No.: (785) 309-5711 Email: mike.schrage@salina.org Municipal Advisor: George K. Baum & Company 4801 Main Street, Suite 500 Kansas City, Missouri 64112 Attn: David Arteberry PhoneNo.: (816)283-5137 Fax No.: (816) 283-5326 Email: arteberry@gkbaum.com 10 OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES TO: Shandi Wicks, Clerk City of Salina, Kansas November 1, 20 18 For $13,500,000' principal amount of General Obligation Temporary Notes, Series 2018-2, of the City of Salina, Kansas, to be dated November 27, 2018, as described in your Notice of Sale dated October 22, 2018 (the "Notice'"), said Notes to bear interest as follows: *Subject to change: see the Notice. Maturity November 15 2019 Principal Amount' $13,500,000 Interest Rate ____ % the undersigned will pay the purchase price for the Notes set forth below, plus accmed interest to the date of delivery . Principal Amount ........................................................... .. ..... .......... ........... $13,500,000.00' Less Discount (not to exceed $67,500 or 0.50%) .. Plus Premium (if any) ................................................ .. Total Purchase Price ..................................................... .. . ... $ _________ _ Total interest cost to maturity at the rate(s) specified . .... $ __________ _ Net interest cost . . . .... . .. .. . .. . . . .. .. .. ........... . . $ _________ _ Average Annual Net Interest Cost . % ------ This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder. the undersigned will comply with all of the provisions contained in said Notice. A cashier's or certified check or a wire transfer in the amount of2.00% of the principal amount of the Notes payable to the order of the Issuer, submitted in the manner set forth in the Notice accompanies this proposal as an evidence of good faith. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule l 5c2-l 2 of the Securities and Exchange Commission and a note purchase agreement for purposes of the laws of the State of Kansas. (LIST ACCOUNT MEMBERS ON REVERSE) ACCEPTANCE Submitted by: By: ------------~ Telephone No. Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on November I, 2018. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made. and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITY", at or prior to 12:00 p.m ., Central Time, on November L 2018. Any bid received after such time will not be accepted or shall be returned to the bidder. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS November 1, 2018 For $2, 160,000* principal amount of General Obligation Internal Improvement Bonds, Series 2018-A, of the City of Salina, Kansas, to be dated November 27, 2018, as described in the Notice of Sale dated October 22, 20I8 (the "Notice"), said Bonds to bear interest as follows: Stated Annual Stated Annual Maturity Principal Rate of Maturity Principal Rate of October 1 Amount' Interest October 1 Amount' Interest 2019 $125,000 % 2027 $145,000 % 2020 115,000 % 2028 150,000 % 2021 120,000 % 2029 155,000 % 2022 125,000 % 2030 165,000 % 2023 130,000 % 2031 170,000 % 2024 130,000 % 2032 175,000 % 2025 135,000 % 2033 180,000 % 2026 140,000 % % *Subject to change; see the Notice. the undersigned will pay the purchase price for the Bonds set forth below, plus accrned interest to the date of delivery . Principal Amount .................. . ........ $2,160,000.00' Plus Premium (if any) Total Purchase Price ....... $ _________ _ Total interest cost to maturity at the rates speci tied ....... $ _________ _ Net interest cost (adjusted for Premium) ....................... . ....... $ _________ _ True Interest Cost . _____ % D The Bidder elects to purchase Municipal Bond Insurance from : [Assured] [AGM] [BAM] Circle one or complete blank. D The Bidder elects to have the following Term Bonds: Maturity Date Years Amount* October l , to $ _____ _ October 1, to $ _____ _ *subject to mandatory redemption requirements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in said Notice. A cashier's or certified check or a wire transfer in the amount of2.00% of the principal amount of the Bonds payable to the order of the Issuer, submitted in the manner set forth in the Notice accompanies this proposal as an evidence of good faith. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by: ---------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: ---------------- Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on November 1, 2018. Attest: Clerk NOTE: Mayor No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITr', at or prior to l :00 p.m., Central Time, on November 1, 2018. Any bid received after such time will not be accepted or shall be returned to the bidder. PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 24, 2018 In the opinion of Gilmore & Bell, P.C., Bond Counsel to the City, under existing Jaw and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"): (1) the interest on the Notes and Bonds [(including any original issue discount properly allocable to an owner thereof)] is excludab/e from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. New Issues Book-Entry Only Moody's Ratings: Bonds-"Applied For" Notes-"Applied For" CITY OF SALINA, KANSAS $13,500,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 $2,160,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A Dated: Date of Delivery Due: As Shown Herein The General Obligation Temporary Notes, Series 2018-2 Notes (the "Notes") will be issued by the City of Salina, Kansas (the "Issuer" or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book- entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the "Note Paying Agent" and "Note Registrar."). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES -"Redemption Provisions" herein. The General Obligation Internal Improvement Bonds, Series 2018-A Bonds (the "Bonds") will be issued by the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2019. The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and "Bond Registrar"). The Bonds are subject to redemption at the option of the City as further described h~rein. See THE BONDS -"Redemption Provisions" herein. MATURITY SCHEDULES (see inside front cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of Bond Counsel. It is expected that the Notes and Bonds will be available for delivery through the facilities of OTC on or about November 27, 2018. BIDS FOR THE PURCHASE OF THE NOTES AND BONDS WILL BE RECEIVED PURSUANT TO THE NOTICE OF SALE: The Series 2018-2 Notes: On or before 12:00 p.m., Central Daylight Time The Series 2018-A Bonds: On or before 1:00 p.m., Central Daylight Time On Thursday, November 1, 2018 . THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. * Preliminary; subject to change Maturity 11-15-19 MATURITY SCHEDULES $13 ,500 ,000111 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 Amountl11 $13,500,000 Base cus1p121 794744 At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on June 1, 2019, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine}, at the Redemption Price of 100% (expressed as a percentage of the principal amount}, plus accrued interest to the Redemption Date. $2,160,000'1' GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A SERIAL BONDS Maturity Amount'1' Rate Yield 10-01-19 $125,000 10-01-20 115,000 10-01-21 120,000 10-01-22 125,000 10-01-23 130,000 10-01-24 130,000 10-01-25 135,000 10-01-26'3' 140,000 10-01-27'3' 145,000 10-01-28(3) 150,000 10-01-29!3) 155,000 10-01-30(3) 165,000 10-01-31(3) 170,000 10-01-32(31 175,000 10-01-33(3) 180,000 [TERM BONDS Maturity Amountl1l (All plus accrued interest, if any) 111 Preliminary; subject to change. Base cus1p12i 794744 CUSIP Ill Base 794744 l 12lCUSIP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. (31 At the option of the City, Bonds maturing on October l , 2026 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2025, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds o,f each maturity to be redeemed to be determined by the City in such equitable manner as it may determine}, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOK/NG STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATER/ALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL (EXCEPT FOR PERMITTED OMISSIONS) BY THE ISSUER FOR PURPOSES OF COMPLYING WITH RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300 West Ash P. 0. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Karl Ryan, Mayor Trent W. Davis, M .D., Vice Mayor Mike Hoppock, Commissioner Melissa Rose Hodges, Commissioner Joe Hay, Jr., Commissioner CITY STAFF Mike Schrage, Interim City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri MUNICIPAL ADVISOR George K. Baum & Company Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The · information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ............................................................................................................. 1 THE NOTES.......................................................................................................................................... 2 THE BONDS ......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN ......................................................................................................................... 13 SOURCES AND USES OF FUNDS.......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................................... 14 LEGAL MATTERS................................................................................................................................. 16 TAX MATTERS ..................................................................................................................................... 16 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 18 UNDERWRITING ................................................................................................................................. 18 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 19 CONTINUING DISCLOSURE ................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 19 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY.............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY ........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY ..................................................................... A-6 DEBT SUMMARY OF THE CITY ....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................................... A-13 APPENDIX B: OMNIBUS CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2017 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $13,500,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 $2,160,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $13,500,000* General Obligation Temporary Notes, Series 2018-2 (the "Notes"), and its $2,160,000* General Obligation Internal Improvement Bonds, Series 2018-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City and the Salina Airport Authority. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES-"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATIERS, TAX MATIERS, and APPENDIX B-OMNIBUS CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. *Preliminary; subject to change 1 THE NOTES Authority The Notes are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq., (specifically including K.S.A. 10-123), K.S.A. 10-620 et seq., K.S.A. 12-631r et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 6S-163u, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest from the proceeds of general obligation bonds of the Issuer, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated November 27, 2018 (the "Dated Date"), shall become due in the amount on the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on June 1, 2019, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). 2 Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar" and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. 3 In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon 4 written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to ~e paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES-Book-Entry Notes; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the 5 Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note .Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq. and K.S.A. 12- 6a01 et seq., all as amended, and an ordinance and resolution adopted by the governing body of the City authorizing the issuance of the Bonds (collectively, the "Bond Resolution"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain public improvements (as herein after described in the section entitled "THE FINANCING PLAN. The Bond Projects"), and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner 6 provided by law. Such taxes and/or assessments shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes and/or assessments shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, takin~ into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. · Description The Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated November 27, 2018 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shal l bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2026 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2025, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. [ Mandatory Redemption. The Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Term Bonds: *Final Maturity] Principal Amount Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, 7 such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall 8 transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co . or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. 9 SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than SO% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. 10 In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("OTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of OTC. One fully- registered bond certificate will be issued for each scheduled maturity of the Securities, and will be deposited with OTC. 2. OTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. OTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with OTC. OTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. OTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). OTC has a Standard & Poor's rating of "AA+". The OTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about OTC can be found at www.dtcc.com. 3. Purchases of Securities under the OTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from OTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with OTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with OTC and their registration in the name of Cede & Co. or such other OTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities ar~ credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 11 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co . (or such other nominee as may be requested by an authorized representative of OTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through OTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. 12 THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (the "Note Projects") and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Downtown Streetscape Police Training Center Ordinance/ Resolution Ord. 17-10888 Res. 17-7458 Authority K.S.A. 12-631r; K.S .A. 12- 685 et seq; K.S.A. 65-163u K.S.A. 12-1736 et seq. Total Estimated Improvement Fund Deposit $8,445,265.79 4,925, 729.21 $13,370,995.00 (Excludes issuance costs) A portion of the Note proceeds will be used to retire a portion of general obligation temporary notes of the City previously issued for certain Note Projects as well as pay issuance costs . The Bond Projects Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (the "Bond Projects"), to pay the costs associated with the issuance of the Bonds and retire a portion of the City's outstanding general obligation temporary notes. The Bond Projects are as follows: Project Description Grand Prairie Addition, Phase II River Trail Second Addition Beechcraft Road Resolution Res. 16-7394 Res. 16-7365 Res. 17-7470 Authority K.S.A. 12-6a01 et seq. K.S.A. 12-6a01 et seq. K.S.A. 12-685 et seq. Total SOURCES AND USES OF FUNDS Estimated Improvement Fund Deposit $305,058.35 753,728.34 1,062,038.85 $2,120,825.54 (Excludes issuance costs) Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount [Original Issue Premium/ Discount] Total Sources of Funds Uses of Funds : Deposit to Improvement Fund -Project Costs Deposit to Improvement Fund -Retire Series 2018-1 Notes Underwriter's Discount Costs of Issuance Total Application of Funds 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITER. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A-FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." Kansas Public Employees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The 14 Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under "TAX MATTERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on Bonds [The initial offering prices of certain maturities of the Bonds that are subject to optional redemption may be in excess of the respective principal amounts thereof.] Any person who purchases such a Bond in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Bonds are subject to redemption at par under the various circumstances described under "THE BONDS-Redemption Provisions." No Additional Interest or Mandatory Redemption upon Event of Taxability Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. 15 Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATIERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATIERS, TAX MATIERS, and APPENDIX B - OMNIBUS CONTINUING DISCLOSURE UNDERTAKING. TAXMATIERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. 16 Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities [(including any original issue discount properly allocable to an owner thereof)] is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §265(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code§ 1288, OID on tax-exempt obligations accrues on a compound basis. The amount of OID that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on such Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID.) Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. ) Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will 17 be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS The City has applied to Moody's Investors Service for a rating on the Notes and Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. MUNICIPAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by [ ] (the "Notes Underwriter") at a price equal to the principal amount of the Notes,[ plus an original issue premium of$ ], [less an underwriting discount of$ ]. The Bonds are being purchased by [ ] (the "Bonds Underwriter") at a price equal to the par amount of the Bonds, [plus an original issue premium of$ ), [less an underwriting discount of$ ]. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as (the "Underwriters"). 18 ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In 2013, the Issuer adopted an Omnibus Continuing Disclosure Undertaking (the "Disclosure Undertaking") wherein the Issuer covenanted to provide annually certain Financial Information and Operating Data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. The Disclosure Undertaking modified previous undertakings the Issuer entered into pursuant to the Rule (the "Prior Undertakings"), in order to promote future compliance with its undertakings under the Rule. In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B-OMNIBUS CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Due to administrative oversight in implementation of the new Disclosure Undertaking, for the fiscal year ended December 31, 2013, the Issuer failed to timely file certain operating data, including a "Financial Overview." This operating data was filed in a supplemental operating data filing on July 8, 2014. A notice of failure to file such operating data was filed on July 15, 2015. 2. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The City's audited financial statements for the fiscal years ended December 31, 2016 and 2017 were not yet completed by the filing deadlines. In compliance of the City's prior disclosure undertakings, the City timely filed unaudited financial statements. The City filed the audited financial statements for fiscal years ended December 31, 2016 and 2017 promptly when they became available which was October 16, 2018. The City's final audited financial statements for these years were delayed because of challenges with financial software conversion, staff turnover and delayed receipt of component unit audits. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 19 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2017 Estimated Actual Valuation (1) 2017 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2016 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,097,885,103 $ 481,461,005 $ 54,955,000 $ $ $ $ $ $ $ $ 46,994 1,169 1.77% 11.41% 18,115,000 11,973,966 939,264 11,850,000 124,811,822 209,855,788 4,466 6.77% 43.59% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY-"Estimated Actual Valuation". (2) Includes the Bonds. Preliminary; subject to change. (3) Does not include notes to be retired with proceeds from the sale of the Series 2018-A Bonds and the Series 2018-2 Notes. Preliminary; subject to change. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full faith and credit. See DEBT SUMMARY OF THE CITY -"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY -"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2017 U.S. Census Bureau estimate of 46,994. The City is the county seat for Saline County which had an estimated 2017 U.S. Census Bureau population of 54,734. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Karl Ryan Trent W. Davis, M.D. Mike Hoppock Melissa Rose Hodges Joe Hay, Jr. Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2020 2020 2022 2022 2022 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,994 47,336 47,813 47,867 47,846 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 194 full-time employees for out of the 436 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full-time firefighters. The fire department operates 3S vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 102 personnel, of which 72 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,400. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. A military school is located in the City and operates both a grade school and high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 572 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 791 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 50 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by Great Lakes Airlines. The airline offers daily scheduled passenger air service to Denver International Airport with a 30-passenger Embraer EMB-120 regional aircraft. Great Lakes Airlines is a United Airlines code share partner. A-3 Utilities and Infrastructure Westar Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $1.042 billion as of Spring 2018. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System {"KPERS") established in 1962, as an instrumentality of the State, pursua.nt to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of December 31, 2017, KPERS serves approximately 311,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: {a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. A-4 (b) Local Group -all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution is 8.39% of the employee's gross salary for calendar year 2018. The Issuer's contribution is projected to change to 8.89% of gross compensation for calendar year 2019. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2017 (the "2017 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1.458 billion at the end of 2017. The amount of the UAAL in 2017 changed from the previous year's amount due to the factors discussed in the 2017 Va luation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2017 Valuation Report is available on the KPERS website at kpers .org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2017 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2017 Valuation Report sets the employer contribution rate for the period beginning January 1, 2020, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.61% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2017 Valuation Report. The statutory contribution rate of employers currently equals the 2017 Valuation Report's actuarial rate . As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2017 Valuation Report, KP&F carried an UAAL of approximately $859 million at the end of 2017. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2018, the Issuer contributes 20.09% of employees' gross compensation. Beginning January 1, 2019, the Issuer's contribution is projected to change to 22.13% of gross compensation for calendar year 2019. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums, tennis courts, and ice and roller skating facilities. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,SOO-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, EIDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips Lighting. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas first class cities in 2012 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2016, over 100 businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 3,600 employees with a combined payroll in excess of $143.2 million. The report also cited that the Airport/Airport Industrial Center accounted for 12 percent of the employment in Saline County and 25 percent of the total economic activity in a seven -county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2017 to be 25,815 persons and year-to-date 2018 to be $25,81S. The estimated median household income for the City in 2016 was $45,896 and owner-occupied housing rates in the City were 63.7% Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority") is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous 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. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas . The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, SkyWest Airlines began daily United Express Jet Service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier-manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2017, the Salina Air Traffic Control Tower logged over 61,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.6 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2017 and 1,680,242 as of August 2018. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight 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 and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwan's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Walmart Philips Lighting Company Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,800 1,700 1,500 1,100 600 425 300 250 250 230 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A $44,732 43,552 41,447 41,096 40,235 State of Kansas $47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2018 (Aug) 25,815 24,975 840 3.3% 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 2014 26,303 25,159 1,144 4.4 2013 25,458 24,515 1,459 5.1 A-8 State of Kansas: Total Unemployment Year Labor Force Employed Unemployed Rate 2018 (Aug) 1,476,834 1,425,342 51,492 3.5% 2017 1,478,783 1,425,216 53,567 3.6 2016 1,484,001 1,422,122 61,879 4.2 2015 1,499,009 1,435,884 63,125 4.2 2014 1,500,353 1,432,359 67,994 4.6 2013 1,491,745 1,405,036 86,709 5.3 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 Total Series 2008-B 2009-A 2010-A 2010-B 2011-A 2012-A 2012-B 2013-A 2013-B 2014-A 2015-A 2016-A 2016-B 2017-A 2018-A 1111ncludes the Bonds. <21Preliminary; subject to change. Purpose Internal Improvements Internal Improvements Refunding & Improvement Refunding Internal Improvements Internal Improvements Refunding Taxable Improvements Improvements Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements (the Bonds) Amount of Issue $3,525,000 23,695,000 6,875,000 7,860,000 6,565,000 2,365,000 3,785,000 1,360,000 4,330,000 7,570,000 6,825,000 6,570,000 13,750,000 9,310,000 2,160,000(2) Final Maturity 07-01-24 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 Amount Outstanding<1l $1,035,000 2,845,000 650,000 1,720,000 1,095,000 1,495,000 415,000 995,000 3,170,000 5,240,000 5,860,000 6,060,000 13,080,000 9,135,000 2.160,000(2) $54,955,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Series 2016-2 2018-1 2018-2 l111ncludes the Notes. Date Issued 07-20-16 07-30-18 11-27-18 Maturity Date 09-01-19 12-01-18 11-15-19 Final Original Note Amount Amount Outstanding<1J $4,615,000 $4,615,000 6,000,000 6,000,000(21 13,500,000<2J 13,500,ooo<3J $18,115,000 l2JTo be redeemed with proceeds from the sale of the Notes, Bonds or other available funds. <31Preliminary; subject to change. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Issued 04-15-11 Purpose Improvements Amount of Issue $16,120,000 Final Maturity 10-01-31 Amount Outstanding $11,850,000 Lease Obligations (as of December 31, 2017): State Loans Item HVAC System Year Issued 2012 Original Amount 1,100,000 Final Year 2027 Amount Outstanding $939,264 The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultimately secured by the City's ability to levy unlimited ad valorem property taxes. Project Year Final Original Amount Number Purpose Originated Payment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $9,330,000 $ 7,967,785 KDHE 2841 Water 2015 08-01-35 4,250,000 4,006,181 $11,973,966 A-10 Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Amount Outstanding $ 21,040,000 260,000 110,555,000 Estimated Share of the City Jurisdiction Salina Airport Authority Saline County* Unified School District No. 305 *As of December 31, 2017 Annual Debt Payments (to be updated) Amount $ 21,040,000 192,842 103,578,980 $124,811,822 Percentage . 100.00% 74.17 93.69 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2018-A Bonds Year Principal Interest Principal Interest Total 2019 $6,690,000 $1,598,986 2020 4,545,000 1,402,656 2021 4,340,000 1,269,786 2022 4,420,000 1,121,296 2023 4,260,000 950,741 2024 3,870,000 784,621 2025 3,445,000 690,406 2026 3,110,000 604,336 2027 2,835,000 523,041 2028 2,495,000 447,896 2029 2,185,000 379,589 2030 1,680,000 321,726 2031 1,680,000 273,964 2032 1,560,000 224,892 2033 1,510,000 176,844 2034 1,470,000 129,613 2035 1,230,000 83,250 2036 930,000 45,413 2037 540,000 18,225 $52,795,000 $11,047,281 *Excludes payments made prior to the closing date of the Bonds. A-11 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2017 $59,985,000 12.46% 1.94% 43,336 $1,267.22 2016 56,875,000 12.03 1.87 47,813 1,189.53 2015 57,535,000 12.43 1.94 47,867 1,201 .98 2014 63,805,000 13.98 2.19 47,707 1,337.43 2013 64,515,000 14.21 2.23 48,045 1,342.80 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $15 million of improvements including construction of a riverfront renewal project and police training facility. A portion of the debt service payments on bonds issued for the riverfront project are anticipated to be paid from local sales tax. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City currently expects to issue STAR Bonds by December 2018 in the approximate principal amount of $23,500,000 to finance and refinance certain improvements in the City's downtown consisting of a fieldhouse, various infrastructure improvements and certain private improvements. The STAR Bonds are expected to be primarily payable from the tax increment from certain state and local sales tax, compensating use tax and transient guest tax generated within the downtown STAR bond district; the STAR Bonds will not be general obligations of the City. A portion of the proceeds of the STAR Bonds may be used to retire the City's General Obligation Temporary Notes, Series 2016-2, previously issued to temporarily finance certain costs of the fieldhouse. The City has been involved with civil litigation concerning environmental contamination in certain areas within the boundaries of the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University (the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency (DoD) caused contamination. The Salina Public Entities have reached a settlement agreement with the U.S. Department of Justice (DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provides for a 10% local share of initial project costs to be paid by the City. The Consent Decree settlement is in relation to an investigation to determine the extent and severity of the contamination and to determine the best method of remediation. It does not include any funding for actual remediation, but the investigation is fully funded by the settlement. Once the investigation is completed, there will be another round of negotiations with the Federal Government to determine respective financial responsibilities for remediating the contamination. In the event funding cannot be secured in a timely fashion or in sufficient amounts, it may be necessary for the City to issue debt to relocate certain water supply wells. The exact timing and amount, if any, of such borrowing cannot be determined at this time. If City borrowing is necessary for the project, it is anticipated that utility revenue bonds will be the final type of debt considered. A-12 Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the "Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; A-13 (E) expiration of any abatement of property from property tax; or (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or (F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding calendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "[w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax Lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "[b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. A-14 The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2017 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"}, which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2014 2015 2016 2017 Property Taxes $ 9,278,832 $9,244,160 $9,217,596 $10,115, 784 Sales Tax 12,688,980 12,930,811 12,780,891 12,906,032 Other Taxes 5,636,239 5,663,843 6,347,717 5,215,264 Intergovernmental 1,162,384 975,720 1,301,106 1,133,310 Charges for Services 7,826,289 6,046,903 6,472,698 6,153,450 Investment Revenue 11,536 0 102,045 3,336 Miscellaneous 629,259 498,557 507.330 1,709,491 Total Revenues $37,233,769 $35,359,034 $36, 729,383 $37,236,667 Expenditures: General Government $ 3,986,212 $5,342,433 $5,422,010 $5,423,241 Public Safety 19,558,487 21,267,630 21,664,398 21,628,730 Public Works 6,949,477 4,875,641 5,066,426 5,328,315 Public Health and Sanitation 146,178 754,347 703,606 749,656 Culture and Recreation 2,697,564 4,039,856 4,147,736 4,424,221 Planning and Development 2,209,836 586,358 980,950 752,825 Capital Outlay 843,975 1,041,690 1,098,587 896,026 Total Expenditures $36,391, 729 $37,907,955 $39,083, 713 $39,203,014 Revenues Over (Under) $842,040 $(2,548,921) $(2,354,330) $(1,966,347) Other Sources (Uses) {137,351} 2,962,350 2,546,500 3,816,500 Net Change in Fund Balance $704,689 $413,429 192,170 1,850,153 Fund Balance January 1 $3,549,740 $4,254,432 $4,840,186 $5,032,356 Restatement of Prior Year Balance 0 172,325 0 0 Fund Balance December 31 $4,254,429 $4,840,186 $5,032,356 $6,882,509 A-15 Assessed Valuation According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propertv!2l Utilities Vehicle Valuation 2018(l) $404,305,533 $9,417,565 $20,485,144 $50,970,796 $485,179,038 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 2013 370,390,092 17,769,120 16,948,264 48,882,411 453,989,887 (ll Preliminary 2018 assessed valuation figures used for budgeting purposes. 2018 motor vehicle valuation not yet available; 2017 data used for estimation purposes only. (2)Personal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2018 2017 2016 2015 2014 2013 2012 Special Assessments Residential Real Estate Equalization Ratio N/A N/A 11.36 11.28 11.65 11.55 11.95 Estimated Actual Value $3,137,602,986 3,097,885,103 3,046,949,034 2,968,008, 193 2,917,267, 724 2,889,385,914 2,884,188,981 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities . The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. A-16 The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount ~ Amount ~ 2017* 26.129 $11,163,201 $10,903,120 97.7% $10,933,735 97.9% 2016 27.603 11,566,105 11,321,285 97.9 11,505,024 99.5 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99 .6 2014 27.080 10,991,959 9,312,515 84.7 10,832,972 98.6 2013 26.927 10,868,225 8,101,775 74.5 10,839,120 99 .7 2012 26.190 10,550,730 6,597,038 62.5 10,500,249 99 .5 *Represents collections through September 21, 2018. A-17 Tax Levies Nov Nov Nov Nov Nov Nov 2012 2013 2014 2015 2016 2017 Levy Levy Levy Levy Levy Levy City of Salina 26.190 26.927 27.080 27.311 27.603 26.129 Salina Library 5.452 5.761 6.034 5.895 5.893 5.989 State Education & Other 1.500 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 58.649 58.116 55 .605 56.120 55.743 56 .501 Airport Authority 4.007 4.504 4.486 4.396 4.396 4.225 Central Kansas Extension District 1.176 1.176 1.285 1.502 1.510 1.475 Saline County 34.823 37.895 37 .047 38 .275 37.508 37.321 Total 131.797 135.879 134.037 134.999 134.153 133.140 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2017 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Westar Utility $11,856,980 2.46% SFC Global Supply Chain Inc Manufacturing 7,508,620 1.56% RAF Salina LLC Regional Shopping Center 4,674,872 0.97% Kansas Gas Service Utility 3,784,188 0.79% Central Mall Realty Holding LLC Retail Shopping Center 3,696,437 0.77% S&B Motels Inc Motel 3,424,974 0.71% Sams Real Estate Business Trust/Walmart Discount Store 2,529,908 0.53% Menard Inc. Home Improvement Store 2,501,856 0.52% Individual Residential 2,333,789 0.48% Wal-Mart Retail 2,282.451 0.47% Total $44,594,075 9.26% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Year Value 2018 (Sept) $57,989,096 2017 59,975,197 2016 97,910,328 2015 56,989,007 2014 24,214,432 2013 29,285,213 A-18 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by th-e state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The total sales tax for goods and services in the City is 8.75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. 2016 1992 City's Portion of .75% Citywide .50% Citywide 1% Countywide Local Option Local Option Local Option Year Sales Tax Receipts Sales Tax Receipts Sales Tax Receipts 2018(l) $5,196,237 $3,464,158 $4,392,098 2017 8,642,821 5,761,881 7,368,869 2016 4,648,280(2) 5,810,350 7,312,618 2015 4,610,032(2) 5,762,541 7,376,708 2014 4,488,672(2) 5,610,840 7,188,934 2013 4,313,345(2) 5,391,681 6,998,806 (1lAs of July, 2018 (2lCollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the 2016 sales tax. Source: City Clerk Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from A-19 future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25 .0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. A-20 Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2016 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.36%, and commercial and industrial property was 24.68%. A-21 APPENDIX B Omnibus Continuing Disclosure Undertaking CITY OF SALINA, KANSAS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING DATED AS OF JULY 15, 2013 OMNIBUS CONTINUING DISCLOSURE UNDERTAKING THIS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING (the "Disclosure Undertaking"), dated as of July 15, 2013, is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Disclosure Undertaking is executed and delivered by the Issuer, pursuant to a resolution adopted by the governing body of the Issuer to consolidate the continuing disclosure obligations of the Issuer with respect to the Bonds and the Prior Undertakings, both as defined below, to enhance efficiency of the administration of Prior Undertakings and promote timely disclosure by the Issuer. 2. The Issuer is executing this Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist each Participating Underwriter in complying with the SEC Rule, as defined below. The Issuer is the only "obligated person," as defined in the SEC Rule, with responsibility for continuing disclosure hereunder. 3. This Disclosure Undertaking shall apply with respect to any series of Bonds issued prior to the effective date hereof and subject to the SEC Rule. In consideration of the foregoing, the Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized term used in this Disclosure Undertaking, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described in, Section 2 of this Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the Financial Information and Operating Data. "Beneficial Owner" means, with respect to a series of Bonds, any registered owner of any Bonds of such series and any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds of such series (including persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds of such series for federal income tax purposes. "Bond Insurer" means the provider of the bond insurance policy, if any, for any series of Bonds. "Bond Resolution" means collectively the ordinance(s) and/or resolution(s) of the governing body of the Issuer authorizing the issuance of each series of the Bonds. "Bonds" means all bonds, notes, installment sale agreements, leases or certificates intended to be a debt obligation of the Issuer identified on Schedule 1 as such schedule may be supplemented and amended and, as context may require, the Bonds of any particular series identified on Schedule 1. The Issuer may make future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. "Business Day" means a day other than: (a) a Saturday, Sunday or legal holiday; (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the trustee, any paying agent or a Dissemination Agent, as applicable, is located are required or authorized by law to remain closed; or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Designated Agent" means Gilmore & Bell, P.C. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of this Disclosure Undertaking. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation substantially in the form attached hereto as Exhibit C. "EMMA" means the Electronic Municipal Market Access system for municipal secunt1es disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Information" means the financial information of the Issuer described in Section 2(a)(J) hereof. "Fiscal Year" means the one-year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units, as in effect at the time of the preparation of the Financial Information. "Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any of the events listed in Section 3(a) hereof. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the SEC Rule. "Official Statement" means collectively the Issuer's Official Statement(s) for each series of the Bonds, including all appendices and exhibits thereto. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "Participating Underwriter" means each of the original underwriters of a series of Bonds required to comply with the SEC Rule in connection with the offering of such Bonds. "Prior Undertakings" means the prior continuing disclosure undertakings of the Issuer under the SEC Rule. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission of the United States. "SEC Rule" means Rule 15c2-l 2 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. 2 "System" means the entire combined waterworks plant and system and sewerage plant and system owned and operated by the Issuer for the production, storage, treatment and distribution of water, and for the collection, treatment and disposal of sewage, to serve the needs of the Issuer and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the Issuer. Section 2. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than I 80 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ended in 2013, file with the Repository the Issuer's Annual Report, consisting of the Financial Information and Operating Data described as follows: (1) Financial Information. The financial statements of the Issuer and the System for such prior Fiscal Year, accompanied by an audit report resulting from an audit conducted by an Independent Accountant in conformity with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all governmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accounting basis is contained in Appendix A of the Official Statement. If such audit report is not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain summary unaudited financial information and the audit report and accompanying financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Information may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as of the end of the Fiscal Year of certain financial information and operating data described in Exhibit A , with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer; provided, any substantive change to information provid_ed shall be effected only in accordance with Section 6 hereof. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the Repository. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(b). (b) From and after such time that Section (b)(5) of the SEC Rule applies to any series of Bonds, ifthe Annual Report is not filed within the time period specified in subsection (a) hereof, the Issuer shall send a notice to the Repository in a timely manner, in substantially the form attached as Exhibit B. 3 (c) Pursuant to Section (d)(3) of the SEC Rule, the provisions of Section 2(a)(J) hereof shall not apply to any Bonds with a stated maturity of 18 months or Jess. Section 3. Reporting of Material Events. (a) No later than I 0 Business Days after the occurrence of any of the following Material Events, the Issuer shall give, or cause to be given, to the Repository notice of the occurrence of any of the following Material Events with respect to the Bonds, with copies to the Bond Insurer, if any: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (I 0) release, substitution or sale of property securing repayment of the Bonds, if material; ( 11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer or System (which shall be deemed to occur as provided in the SEC Rule); (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or System or the sale of all or substantially all of the assets of the Issuer or System, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and ( 14) appointment of a successor or additional paying agent or trustee or the change of name of the paying agent or trustee, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. 4 Section 4. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as Dissemination Agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Disclosure Undertaking. (b) Annual Reports. Except as provided in Section 2(c) hereof, if a Dissemination Agent is appointed, not later than 15 Business Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent or the Repository. The Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Undertaking, stating the date it was filed, or that the Issuer has certified to the Dissemination Agent that the Issuer has filed the Annual Report with the Repository. Except as provided in Section 2(b) hereof, if the Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report with the Repository, by the date required in Section 2(a), the Dissemination Agent shall send a notice to the Repository in substantially the form attached as Exhibit A. (c) Material Event Notices. (1) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) Whenever the Issuer obtains knowledge of the occurrence of an event, because of a notice from the Dissemination Agent pursuant to Section 4(c)(J) or otherwise, the Issuer shall promptly determine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent of such determination. If appropriate, such writing shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer and the Bond Insurer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. ( d) Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Undertaking, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of 5 the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Undertaking. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Undertaking for a particular series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of that series of Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as permitted in the Bond Resolution, such person shall be responsible for compliance with under this Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or assumption occurs prior to the final maturity of such Bonds, the Issuer shall give notice of such termination or assumption in the same manner as for a Material Event under Section 3(b). Section 6. Bonds Subject to this Disclosure Undertaking; Amendment; Waiver. (a) All outstanding Bonds as of the date of this Disclosure Undertaking shown on Schedule 1 are hereby made subject to this Disclosure Undertaking. The Issuer may make any future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. (b) All references to the "Bonds" in this Disclosure Undertaking shall apply separately to each series of Bonds that are or become subject to this Disclosure Undertaking, without further amendment hereto. (c) Notwithstanding the prov1s10ns of subsection (d) or anything else contained in this Disclosure Undertaking to the contrary, in conjunction with the public offering of any series of Bonds, the Issuer and the Dissemination Agent may amend the categories of Operating Data to be updated as set forth in Section 2(a)(2) and Exhibit A to conform to the operating data included in the final Official Statement for such series of Bonds, in conformance with the requirements and interpretations of the SEC Rule as of the date of such final Official Statement, without further amendment to this Disclosure Undertaking. Thereafter, the Operating Data to be filed by the Issuer with the Repository with respect to the Bonds (and all other series of Bonds then subject to this Disclosure Undertaking) shall be deemed to be amended to reflect the requirements of the revised Exhibit A for the new series of Bonds. (d) Except as otherwise provided in subsection (c), the Issuer may amend this Disclosure Undertaking and any provision of this Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to this Disclosure Undertaking; provided, however, that this Disclosure Undertaking, including Schedule 1 hereto, may be amended for the purpose of (1) extending the coverage of this Disclosure Undertaking to any additional series of Bonds or (2) removing reference to any series of Bonds for which the Issuer's reporting obligations have terminated in accordance with Section 5 hereof, each without the provision of a written opinion as otherwise required by this paragraph. 6 ( e) If a provision of this Disclosure Undertaking is amended or waived with respect to a series of Bonds pursuant to subsection (d), the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, ifthe amendment relates to the accounting principles to be followed in preparing financial statements: (1) notice of such change shall be given in the same manner as for a Material Event under Section 3(b); and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, iffeasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under this Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of this Disclosure Undertaking with respect to a series of Bonds, any Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under this Disclosure Undertaking. Noncompliance with the provisions of this Disclosure Undertaking shall not be deemed an Event of Default under the Bond Resolution or the Bonds, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with this Disclosure Undertaking shall be an action to compel performance. Section 9. Notices. Any notices or communications to or among the parties referenced in this Disclosure Undertaking shall be given the Notice Representatives at the Notice Addresses set forth in the Bond Resolution for each series of Bonds; provided notice to the Dissemination Agent shall be given at the Notice Address set forth on Exhibit C hereto. Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, each Participating Underwriter and Beneficial Owners from time to time with respect to a series of Bonds, and shall create no rights in any other person or entity. Section 12. Severability. If any provision in this Disclosure Undertaking, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Disclosure Undertaking shall not in any way be affected or impaired thereby. 7 Section 13. Governing Law. This Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 8 IN WITNESS WHEREOF, the Issuer has caused this Disclosure Undertaking to be executed as of July 15, 2013. CITY OF SALINA, KANSAS (SEAL) Mayor Clerk (Signature Page to Continuing Disclosure Undertaking) SCHEDULE I DESCRIPTION OF BONDS SUBJECT TO DISCLOSURE UNDERTAKING General Obligation Bonds (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Internal Improvement Bonds, Series 2008-B General Obligation Internal Improvement Bonds, Series 2009-A General Obligation Refunding and Improvement Bonds, Series 2010-A General Obligation Refunding Bonds, Series 2010-B General Obligation Internal Improvement Bonds, Series 2011-A General Obligation Internal Improvement Bonds, Series 2012-A General Obligation Refunding Bonds, Series 2012-B General Obligation Taxable Improvement Bonds, Series 2013-A General Obligation Internal Improvement Bonds, Series 2013-B General Obligation Internal Improvement Bonds, Series 2014-A General Obligation Refunding & Internal Improvement Bonds, Series 2015-A General Obligation Internal Improvement Bonds, Series 2016-A General Obligation Refunding Bonds, Series 2016-B General Obligation Internal Improvement Bonds, Series 2017-A General Obligation Internal Improvement Bonds, Series 2018-A Dated Date 12-15-08 07-15-09 05-01 -10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-26-16 07-26-16 07-27-17 11-27-18 Temporary Notes (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Temporary Notes, Series 2018-2 Dated Date I 1-27-18 Revenue Bonds (Base CUSIP No.: 794811) Description of Indebtedness Water and Sewage System Revenue Bonds, Series 2011 S-1 Dated Date 04-15-11 Final Maturi!! 07-01-28 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 I 0-01-36 10-01-3 I 10-01-37 10-01-33 Final Maturi!! 11-15-19 Final Maturi!! 10-01-31 EXHIBIT A OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The Operating Data in the sections and tables contained in the most recent Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) generally described as follows: Operating Data for General Obligation Bonds, Temporary Notes, Lease Obligations Financial Overview Tax Levies Assessed Valuation Estimated Actual Valuation Tax Collections Largest Taxpayers Operating Data for Revenue Bonds User Characteristics (number of users; percentage split between residential and other customers) Largest Users (top ten; name; business type; total cf billed; total dollars billed) User Trends (gallons of water metered; gallons of sewage treated; average number of customers) Current Water Rate Structures Current Sewage Rate Structure Historical and Projected Financials (but only updating historical financials) Outstanding System Indebtedness (Net Income, Debt Service, Bond Coverage, Additional Utility Debt Payments) Additionally, for obligations issued on or before November 1, 2018, the Issuer shall provide updates as of the end of the Fiscal Year for any material adverse changes in the portions of the final Official Statement concerning Property Valuations and Pension and Employee Retirement Plans. A-1 EXHIBITB NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series[_], dated as of[Bonds Dated Date] Name of Obligated Person: City of Salina, Kansas Date of Issuance: [Bonds Closing Date] NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as required by the Issuer's Omnibus Continuing Disclosure Undertaking. The Jssuer anticipates that the Annual Report will be filed by _____ _ Dated: -------- CITY OF SALINA, KANSAS By ____________ _ By _____________ ,as Dissemination Agent cc: City of Salina, Kansas B-1 EXHIBITC ACCEPTANCE OF DISSEMINATION AGENT Name of Issuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series L_], dated as of[Bonds Dated Date] Dissemination Agent: Notice Address of Dissemination Agent: ___________ , having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Disclosure Undertaking, to which this acceptance is attached, accepts such duties and responsibilities set forth therein. Dated: C-1 APPENDIX C December 31, 2017 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2017, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal Organizational Chart List of Principal Officials FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i -iv v vi 1 -3 4 -15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Schedule of Funding Progress and Schedule of Employer Contributions KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement City Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -67 68 69 69 70 -71 72 73 74 -75 76-77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS-CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds Net Position by Component -Last Ten Years Changes in Net Position -Last Ten Years STATISTICAL SECTION Fund Balances, Governmental Fund -Last Ten Years Changes in Fund Balances, Governmental Funds -Last Ten Years Tax Revenues by Source, Governmental Funds -Last Ten Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Years Direct and Overlapping Property Tax Rates -Last Ten Years Principal Property Tax Payers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 95 96 97 98-99 100 101 102 Schedule 103 2 104 3 105 4 106 5 107 6 108 7 109 8 110 9 111 10 112 11 113 12 114 13 115 14 116 15 117 16 118 17 119 18 120 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 October 12, 2018 Salina To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina , Kansas (the "City") for the year ended December 31 , 2017, is hereby submitted. The City's Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City's accounting system and budgetary controls, and a brief discussion of the City's economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor's report, Management's discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information , generally presented on a multi-year basis. The reader is specifically directed to Management's Discussion and Analysis (MD&A) which immediately follows the independent auditor's report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City's comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is 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 exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31 , 2017 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to insure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921 . The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 47,336. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City .. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore , these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2017. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2017 as compared to 2016. In July of 2017, the Salina Field House was opened for business. Other major projects that were on going, included reconstruction on Country Club Road, South Well Field improvements, continued improvements to ii the water distribution system and preliminary design on the Smoky Hill River Renewal and Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2% were implemented in 2017. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of "routine" capital-including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: • 2018 2019 2020 2021 2022 Sales tax $ 8,260,500 $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 3,895,000 Water & wastewater fund 1,776,101 General obligation bonds 4,500,000 6,135,000 25,000,000 Revenue bonds 38,250,000 4,000,000 5,850,000 32,000,000 4,000,000 Other sources 7,810,000 750,000 $ 60,596,601 $ 15,265,000 $35,235,000 $36,390,000 $ 7,895,000 *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Insure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). iii Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Mize Houser auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. iv Municipal Court Risk Management Development Services Lauren Driscoll Building Services Neighborhood Services Planning & Zoning Community Relations Parks & Recreation Public Works Chris Cotten JimKowach Parks Division Engineering Recreation Division Public Services Golf Course Streets Facility Maintenance Traffic Control Animal Services Flood Control *Tony's Event Center Sanitation Solid Waste Central Garage Computer Technology Jack Rolfs CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rose Hodges Mike Hoppock Joe Hay Interim City Manager Michael Schrage Deputy City Manager Michael Schrage Utilities Martha Tasker Finance/ Administration Debbie Pack Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Arts & Humanities Brad Anderson [ Smoky Hill Museum v City Clerk Water Customer Accounting Finance Legal Services Clark Mize & Linville Chartered* Greg Bengtson Continuous Process Improvement Scott Gardner Fire Administration Fire Suppression Fire Prevention EMS Human Resources Natalie Fischer Police Brad Nelson Administration Patrol Division Support Division Investigative Division City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Hodges, Commissioner Joe Hay, Jr, Commissioner City Executive Staff Michael Schrage, Interim City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities vi FINANCIAL SECTION I Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT -MI.ZE0 HOUSER OMPANYP.A. We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 6% and 0%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $47, 156,349 as of December 31, 2017 and total revenues of $5,559,861 for the year then ended, and the Housing Authority of the City of Salina which statements reflect total assets and deferred outflows of resources of $7,613,952 as of June 30, 2017 and total revenues of $2,623,955 for the year then ended , which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina is based solely on the reports of the other auditors. www.mizehouser.com • mhco@mlzehouser.com 534 S Kansas Ave. Suite 700 •Topeka, KS 66603-3465 • 785.233.0536 p • 785.233.1078 f 534 S Kansas Ave, Suite 400 •Topeka, KS 66603-3454 • 785.234.5573 p • 785.234.1037f 7101 College Blvd, Suite 900 •Overland Pork, KS 66210-1984 • 913.451.1882 p • 913.451.2211 f 211 E Eighth Suite Am Lawrence, KS 66044-2771 • 785.842.8844 p • 785.842.9049 f 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31 , 2017, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15 and the schedules of funding progress on page 68, the schedule of the City's proportionate share of the net pension liability on page 69 and the schedule of City contributions on page 69 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 2 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas October 12, 2018 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2017. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City's financial condition. Financial Highlights • On an accrual basis, the City's government-wide net position increased $9.4 million from current operations with net position increases of $7 .8 million and $1 .6 million in governmental activities and business-type activities, respectively. • At the close of 2017, the City's governmental funds reported combined ending fund balances of $21 .8 million, an increase of $5.1 million from the prior year. This primarily resulted from issuance of general obligation bonds in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance increased $1 .9 million over the prior year. • At the close of 2017, the City's enterprise funds reported a combined ending Net Position of $89.1 million, an increase of $1 .5 million over prior year. Positive performance was shared by all enterprise funds, with the Water and Sewer Fund providing the bulk of the change ($.9 million). • Revenues from governmental funds decreased $.6 million from the prior year and revenues from business type funds increased $1 .1 million from the prior year. • Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader's understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City's operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City's assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City's overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City's financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an "Other Governmental Funds" column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve, and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund 's budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City's operations and economy. 5 The City as a Whole CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($36.8 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $1.1 million (3%) from the prior year with the solid waste disposal fund increasing $370K (13.24%) and water and sewer fund increasing $533K (3%). The increase in charges for services in the solid waste disposal fund is a result an increase in disposal fees of 3.5%, as well as well as a large one time customer, while the increase in the water and sewer fund is a result of an increase in water and wastewater fees by 3%. Sales taxes are the next largest component of the revenue mix, providing 25.5% ($21 .7 million) of the total revenues. The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1 % sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 13.6% ($11.6 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by .5%. The total City mill levy decreased 1.06%. The overlapping levy decreased in 2017 by .63%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $11.1 million from its peak of $39.7 million in 2007. At the 2017 tax rate, this exemption is equivalent to over $760K in annual lost revenue. Motor vehicle value decreased 1.66%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year 2Q.1l ~ Real Estate and Personal Property Assessed Valuation $ 422,364,328 $ 420,849,599 City Mill Levy($ per $1,000) Operating (General Fund) 21 .694 19.95 Debt Service 5.909 7.361 Total City Rate 27.603 27.311 Total Overlapping Levy 134.153 134.999 Percent of Total Taxes Collected 99.9% 93.5% Ratio of Total Taxes (including delinquent collections) to taxes levied 101.7% 95.5% Motor Vehicle Valuation $ 50,970,796 $ 51,833,505 ~ $ 1,514,729 1.744 (1.452) 0.292 (0.846) 6.4% 6.2% $ (862,709) The unemployment rate in Salina decreased slightly from 3.3% at the end of 2016 to 2. 7% at the end of 2017, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force stayed at 27,684. In 2017, the top ten property taxpayers accounted for 14.24% of total assessed value. This is less concentrated than ten years ago (at 15.48% ). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $212.8 million at December 31, 2017. This represents an increase in net assets of $9.4 million over 2016. A comparative Condensed Statement of Net Position at December 31 , 2017 and 2016: 7 Cash and investments Other current assets Noncurrent (capital) assets Total assets Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities Noncurrent liabilities Total liabilities Total deferred inflows of resources Net position: Net investment in capital assets Restricted for permanent funds Restricted for debt service Unrestricted Total net position Percent of total net position Cash and investments as a percentage of current liabilities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-T:z:f:!e Activities 2017 2016 2017 2016 2017 $ 24,491 $ 26,B73 $ 30,336 $ 29,505 $ 54,B27 13,B36 13,990 2,33B 2,213 16,174 206,600 197,122 91,306 90,7B4 297,906 244,927 237,9B5 123,9BO 122,502 36B,907 5,96B 6,6B1 BB? B7B 6,B55 250,B95 244,666 124,B67 123,3BO 375 762 12,540 17,370 3,B79 3,59B 16,419 102,076 9B,15B 31,6B5 32,020 133,761 114,616 115,52B 35,564 35,61B 150,1BO 12 57B 13 270 220 202 12 79B 129,921 124,635 63,316 62,427 193,237 502 4B9 502 1,510 1,249 1,512 1,512 3,022 (8,232) (10,505) 24 255 23 621 16 023 123 701 115 B68 B9 OB3 B7 560 212 784 5B% 57% 42% 43% 100% 195% 155% 7B2% B20% 334% Total Prima~ Government %of %of 2017-2016 Total 2016 Total change 15% $ 56,37B 16% $ (1 ,551) 4% 16,203 4% (29) lil'.'fo 2B7 ,906 aQ'.Y. 10,000 ~ 360,4B7 ~ B,420 ~ 7,559 ~ (704) 36B 046 7,716 11 % 20,96B 14% (4,549) ~ 130,178 ~ 3,5B3 ~ 151,146 ~ (966) 13,472 (674) 91 % 1B7,062 92% 6,175 0% 4B9 0% 13 1% 2,761 1% 261 ~ 13116 ~ 2 907 ~ 203,42B ~ 9 356 100% 269% The largest segment of the City's net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City's obligations to citizens and creditors. In 2017, the amount of net investment in capital assets increased by $6.2 million. Amount restricted for debt service increased by $261 thousand . Outside of the increase in net investment in capital assets and the increase of restricted for debt service, 2017 resulted in a $2.9 million increase to the net position. Total liabilities decreased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities and non-current liabilities decreased primarily due to a reduction in temporary notes and an increase in general obligation bonds. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 Statement of Activities A Condensed Statement of Activities is shown below. Condensed Statement of Activities For the Year Ended December 31 Governmental Business· T~e Activities Activities Total Primary Government 2017-201> 2017 2015 2017 2015 2017 % 20'6 % Change ------ Program Revenues: Charges for Services $ 1J;DO $ 'D,085 $ 26,703 $ 25,657 36,803 43% $ 35,742 42% 1,061 Operating Grants and Contributions 4,541 4,332 4,541 5% 4,332 5% 209 Capital Grants and Contributions 734 0% 734 1% (734) General Revenues: Property Taxes 12,960 12,588 12,960 '6% 12,588 '6% 372 Sales Taxes 2'738 17,682 21,738 25% 17,682 2 1% 4,056 Other Taxes 6,899 7,991 6,899 8% 7,991 9% (t092) Investment Revenue 93 148 129 78 222 0% 226 0% (4) Other Miscellaneous ~ ~ '1)3 79 ~ 2% ~ 7% ~) Total Revenues: 58,334 ~ 26,935 25,814 85,269 1)0% ~ 1)0% 54 Expenses: General Government 9,781 9,138 9,781 13% 9,138 12% 593 Public Safety 23,120 22,232 23, 120 30% 22,232 30% 888 Public Works 'D,345 9,773 'D,345 14% 9,773 t3% 572 Public Health and Sanitation 1,126 \095 1, 126 1% 1,095 1% 31 Culture and Recreation 6,880 6,612 6,880 9% 6,612 9% 268 Planning and Development 1,835 2,047 1,835 2% 2,047 3% (212) Solid Waste Disposal 2,364 2,335 2,364 3% 2,335 3% 29 Water and Sewer 15,650 14,807 15,650 21% 14,807 20% 843 Sanitation 2,178 2,043 2,178 3% 2,043 3% tl5 Golf Course 852 792 852 1% 792 1'/o 60 Interest on Long Term Debt ~ ~ ~ 2% ~ 4% ~) Total Expenses ~ ~ 21,044 "ll,977 ~ .:!!£% 73,895 1)0% ~ Increase in net assets before transfers 3,523 5,483 5,891 5,837 9,414 11,320 ,906 Transfers and other extraordinary items ~ ~ (4,367) ~1) ~) ti __22) Change in Net Position ~ ~ ~ 2,256 ~ ~ ~ Net Position January 1 115,869 '06,704 87,559 85,229 203,428 "ll1,933 11,495 Prior Period Adjustment 82 74 ~ ~) Net Position January'\ restated 115,869 '06,786 87,559 85,303 203,428 "ll2,089 11,339 Net Position December 31 ~ ~ ~ ~ ~ ~ ~ Governmental Activities. Charges for services attributable to governmental activities totaled $10.1 million and operating grants for those purposes were $4.5 million. Both of these revenue streams increased slightly from the prior year. The balance was funded by general revenues. Sales taxes accounted for $21.7 million of general revenues, with property taxes providing $12.9 million. The net position increased by $7.8 million as a result of governmental activities. This increase was primarily related to the increase in sales tax as a result of the collection of two months of sales tax with the new special purpose sales tax rate. Total expenses for governmental activities for the year ending December 31 , 2017 were $54.8 million compared to $53.9 million in 2016. Governmental activities represent 72% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% of the total. 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $21 million, or 27% of the City's total expenses. The majority of this expense ($15.6 million) is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position decreased by $1 .5 million. This decrease was primarily related to the increase in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2017 and December 31,2016. Governmental Fund Balances as of December 31 , (in OOO's) Fund 2017 2016 Change General $ 6,883 $ 5,032 $ 1,851 Tourism and Conwntion 213 183 30 Special Gas 1,082 812 270 Sales Tax Capital 2,084 1,667 417 Schilling Capital Improvement 3,024 4,061 (1,037) Debt Service 1,510 1,249 261 Capital Projects 895 (6,823) 7,718 SFH QalicB 1,715 6,811 (5,096) Other Governmental Funds 4,353 3,685 668 $ 21 ,759 $ 16,677 $ 5,082 Total governmental fund balances increased by $5.1 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund increase was largely the result of the issuance of general obligation bonds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2017 and 2016. Consolidated Statement of Revenues and Expenditures for Major Go-.ernmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2017 Revenues (Including Other Financing Sources) General $ 41 ,864 $ Tourism and Con-.ention 1,685 Special Gas 1,598 Sales Tax Capital 8,265 Schilling Capital Improvement 12 Debt Service 6,659 Capital Projects 12, 125 SFH QalicB 248 Other Governmental Funds 4,067 Total Revenues 76,523 Less Other Sources (19,924) Revenues, net of other sources $ 56,599 $ Expenditures (Including Other Finacing Uses) General $ 40,013 $ Tourism and Con-.ention 1,655 Special Gas 1,328 Sales Tax Capital 7,848 Schilling Capital Improvement 1,049 Debt Service 6,398 Capital Projects 4,407 SFH QalicB 5,344 Other Governmental Funds 3,399 Total Expenditures 71,441 Less Other Uses (4,160) Expenditures, net of other uses $ 67,281 $ 2016 Change 40,081 $ 1,783 1,643 42 1,570 28 4,439 3,826 10 2 20,228 (13,569) 16,432 (4,307) 12,573 (12,325) 4,119 ~) 101 ,095 (24,572) (43,876) 23,952 57,219 ~) 39,889 $ 124 1,624 31 1,396 (68) 4,392 3,456 1,484 (435) 19,724 (13,326) 12,718 (8,311) 5,762 (418) 3,838 ~) 90,827 (19,386) (3,971)~) 86,856 $ (19,575) Total revenues, including other sources, were down $24.6 million compared to 2016. The largest components of this change were a $13.6 million decrease in Debt Service Fund primarily resulting from decreased bond proceeds and a $12.3 million decrease in the SFH QalicB Fund primarily resulting from a decrease in bond proceeds. Expenditures decreased in most every fund. The Sales Tax Capital Fund expenditures increased as a result the ability of the city to expend additional revenues generated by the newly approved special purpose sales tax. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: Co!ll>arative Sunmary Staterrent of Net Fbsition as of DeceniJer 31 (in $000's) Solid Waste Disposal Water and Sew er 2017 2016 Oiange 2017 2016 Change Current Assets $ 6,709 $ 5,886 $ 823 $ 24,014 $ 24,445 $ (431) Capital Assets 3,196 4,047 (851) 86,888 85,444 1,444 Deferred Outflows 79 72 7 676 675 1 Total Assets and deferred outflows $ 9,984 $ 10,005 $ (21) $ 111,578 $ 110,564 $ 1,014 Current Liabilities $ 445 $ 442 $ 3 $ 3,299 $ 3,043 $ 256 Noncurrent Liabilities 3,272 3,605 (333) 27,440 27,554 (114) Deferred hflow s 30 26 4 143 129 14 Total Liabilities $ 3,747 $ 4,073 $ (326) $ 30,882 $ 30,726 $ 156 Net investrrent in capital assets $ 2,041 $ 2,527 $ (486) $ 60,053 $ 66,038 $ (5,985) Restricted 1,512 1,512 Unrestricted 4,196 3,405 791 19, 131 12,288 6,843 Total Net Fbsition $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 c..:urrent Assets as a percentage ot current liabilities 1508% 1332% 728% 803% Sanitation Golf Course 2017 2016 Oiange 2017 2016 Change Current Assets $ 1,787 $ 1,250 $ 537 $ 164 $ 136 $ 28 Capital Assets 826 894 (68) 395 399 (4) Deferred Outflows 102 100 2 32 31 Total Assets $ 2,715 $ 2,244 $ 471 $ 591 $ 566 $ 25 Current Liabilities $ 87 $ 75 $ 12 $ 48 $ 38 $ 10 Noncurrent Liabilities 733 613 120 240 248 (8) Deferred hflow s 38 36 2 11 11 Total Liabilities $ 858 $ 724 $ 134 $ 299 $ 297 $ 2 Net investrrent in capital assets $ 826 $ 894 $ (68) $ 395 $ 399 $ (4) Restricted Unrestricted 1,031 626 405 (103) (130) 27 Total Net Fbsition $ 1,857 $ 1,520 $ 337 $ 292 $ 269 $ 23 Current Assets as a percentage of current liabilities 2054% 1667% 342% 358% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. Corrparative Sunmary of Revenues, Expenses and Oianges in Net Fbsition for the Year Ended Cecerrt>er 31 (In $000's) Solid Waste Dsposal Water and Sew er 2017 2016 Change W1 2016 Change Operating Revenues $ 3,185 $ 2,816 $ 369 $ 19,861 $ 19,328 $ 533 Operating Expenses 2,320 2,312 8 14,721 13,982 739 Operating hcorre 865 504 361 5,140 5,346 (206) Non-operating revenues (expenses) (20) (8) (12) (832) (764) (68) lncorre (Loss) before Transfers 845 496 349 4,308 4,582 (274) Transfers in (out) (540) (640) 100 (3,450) (2,450) (1,000) Change in Net Fbsition 305 (144) 449 858 2,132 (1,274) Net Fbs it ion January 1 5,932 6,067 (135) 79,838 77,649 2,189 Restaterrent 9 (9) 57 (57) Net Fbsition January 1, restated 5,932 6,076 (144) 79,838 77,706 2,132 Net Fbsition Cecerrt>er 31 $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 Sanitation Golf Course 2017 2016 Change 2017 2016 Change Operating Revenues $ 2,886 $ 2,751 $ 135 $ 876 $ 840 $ 36 Operating Expenses 2,178 2,092 86 852 788 64 Operating hcorre 708 659 49 24 52 (28) Non-operating revenues (expenses) 6 52 (46) (4) 4 Income (Loss) before Transfers 714 711 3 24 48 (24) Transfers in (out) (377) (492) 115 Change in Net Fbsition 337 219 118 24 48 (24) Net Fbsition January 1 1,520 1,296 224 268 217 51 Restatement 5 (5) 3 (3) Net Fbsition January 1, restated 1,520 1,301 219 268 220 48 Net Fbsition Cecerrt>er 31 $ 1,857 $ 1,520 $ 337 $ 292 $ 268 $ 24 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31 , 2017. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund . As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31 , 2017 was $297,905,515 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2017 and 2016: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Go-.ernmental Acti-.ity Acti-.ity 2017 2016 2017 Equipment, Furniture and Fixtures $ 2,040 $ 1, 190 $ 1,484 Vehicles 3,521 3,148 1,041 Buildings and lmprmements 33,079 24,857 9,362 Land 24,093 24,002 1,542 Infrastructure 114,958 113, 114 75,727 Construction in Progress 28,909 30,811 2,150 Total $206,600 $ 197, 122 $ 91,306 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Net Additions Changes to Capital Assets, 2017 (in OOO's) Governmental Business-Type Acti"1ty Acti"1ty $ 26,318 $ 22,846 (11 , 129) (18,014) (5,711) (4,311) $ 9,478 $ 521 2016 $ 1,692 1,161 9,783 1,542 60,879 15,728 $ 90,785 Total $ 49, 164 (29, 143) (10,022) $ 9,999 Total 2017 2016 $ 3,524 $ 2,882 4,562 4,309 42,441 34,640 25,635 25,544 190,685 173,993 31,059 46,539 $ 297,906 $287,907 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The City's general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2017 totaled $55,994,305. In addition, there were temporary notes outstanding in the amount of $6,811 ,742, as well as a financing lease in the amount of $157,868. Business-type activities had $12,606,747 in revenue bonds outstanding, as well as $6,520,433 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $8,862,810. The City engaged in the following debt transactions during 2017: • On July 21st, the City issued 2017A, $9,310,000 of improvement bonds. The proceeds were used to finance construction of the Bicentennial Center, Country Club road, and fund preliminary design costs for the Smoky Hill River Renewal. • On July 21st, the City issued $2,180,000 in temporary notes to finance construction of Downtown Streetscape, Grand Prairie Addition Phase II and the Police Training Facility. This note will be refinanced into a long term bond issue in August 2018. Additional information on the City's debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City's finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401 . 15 BASIC FINANCIAL STATEMENTS CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31 , 2017 Prima~ Government Total Total Total Governmental Business-type Primary Activities Activities Government ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Restricted cash and investments Prepaid expenses Total current assets Noncurrent assets: Capital assets, nondepreciable Construction in progress Land Capital assets, depreciable Less: Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources: Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outnows of resources Total assets and deferred outflows of resources Liabilities: Current liabilities: Accounts payable Retainage payable Accrued liabilities Accrued interest payable Deposits payable Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portlon of revenue bonds payable Current portion of financing leases payable Current portion of special assessment debt payable Current portion of general obligation bonds payable Total current liabilittes Noncurrent liabilities: Accrued liabilities Compensated absences Security deposits returnable Net OPEB obligation Net pension liability Temporary notes payable loans payable Revenue bonds payable Special assessment debt payable General obligation bonds payable landfill post-closure care liabilities Total noncurrent liabilities Total liabilities Deferred inflows of resources: Unavailable revenue -property taxes Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources Net Position Net investment in capital assets Restricted for: Permanent funds: Expendable Debt service Unrestricted Total net position 22,490,234 30,335,879 1,791,556 1,902,943 11,708,927 16,726 16 318,107 435,252 2,001,589 38,327139 32,674,090 28,909,568 2,149,789 24,092,859 1,541,806 269,325,527 151,065,494 115,728,000 63,451,528 206,599,954 91,305,561 244,927,093 123,979,651 5,841,010 651,365 127,336 236 123 5,968,346 887 488 s 250,895,439 $ 124,867, 139 1,764,815 $ 568,035 604,811 10,681 572,832 182,225 236,626 176,114 1,499,345 344,215 2,196,742 571,773 708,696 157,868 5,561,280 1,242,407 12,539,918 3 878,547 44,772 1,298,613 298, 132 4,548,909 604,645 28,966,518 3,333,610 4,615,000 12,171,090 8,291,037 11,898,051 50,433,025 5,278,026 1,981,498 102,077,927 31,684,999 114,617,845 35,563,546 11,165,043 1,411,701 220,777 12,576,744 220,777 $ 127, 194,589 35,784,323 s 129,921 ,343 63,315,571 501 ,693 1,509,863 1,512,125 (8,232,049) 24,255,120 $ 123,700,850 89,082,816 The notes to the basic financial statements are an integral part of this statement. 16 52,826,113 3,694,499 11,708,927 16,742 753,359 2,001,589 71,001,229 31 ,059,357 25,634,665 420,391,021 179, 179,528 297,905,515 368,906 744 6,492,375 363 459 6 855,834 $ 375,762,578 2,352,850 615,492 572,832 418,851 176,114 1,843,560 2,196,742 571 ,773 708,696 157,868 6,803,687 16,418 465 44,772 1,596,745 5,153,554 32,300,128 4,615,000 20,462,127 11,898,051 55,711,051 1,981,498 133,762,926 150, 181,391 11,165,043 1,632,478 12,797,521 $ 162,978,912 $ 193,236,914 501 ,693 3,021 ,968 16,023,071 $ 212,783,666 Com(!:2nent Units Salina Salina Housing Airport Authoritl'. Authori!l 1,962,074 1,613,791 18,369 266,634 30,763 146,622 39,652 8,838 2,197,480 1,889,263 148,719 3,010,444 1,454.559 9,888,105 8,299,346 72,676,151 4 571 879 41,804,269 5,330,745 43,770 431 7,528,225 45,659,694 85,727 105,185 1,391 470 85 727 1,496 655 7,613,952 47,156,349 38,686 158,295 37,118 92,466 270,898 92.027 3,176 2,153 1,220,000 171 007 1 743,812 38,412 28,576 49,347 373,407 603,456 7,054 22,787,515 440,395 23,447,372 611,402 25,191,184 10,742 60,495 15,329 96,486 26,071 156,981 637,473 25,348,165 5,330,745 19,753,708 14,718 1,631,016 2 054,476 6,976,479 21,808,184 Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitation Golf Course Total business-type activities Total primary government Component units: Salina Housing Authority Salina Airport Authority Total component units CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Net [Expenses] Revenue and Pr~ram Revenues Operating Capital Charges for Grants and Grants and Exeenses Services Contributions Contributions $ 9,779,656 $ 3,470,076 $ 824,116 23,120,215 4,600,899 1,147,371 10,345,513 347,672 1,934,805 1,126,249 49,966 277,255 6,880,276 1,540,620 213,229 1,834,917 91,013 144,615 1,724439 54,811,265 10,100,246 4,541,391 2,364,863 3,164,761 15,650,277 19,855,033 2,177,632 2,884,526 852,260 798,368 21,045,032 26,702,688 $ 75,856,297 $ 36,802,934 $ 4,541 391 $ 2,661,191 $ 5,474,912 384,749 $ 2,124,815 $ 2,213,300 8,136,103 2,598,049 $ 2,124,815 General Revenues: Property taxes levied for General purposes Debt service Motor vehicle tax General purposes Sales tax General purposes Selective purposes Other taxes General purposes Investment revenues Miscellaneous Transfers, net Subtotal general revenues Change in net position Net position -beginning Net position -ending 100,059 1,280,204 1,380,263 Changes in Net Position Prima!}'. Government Total Total Total Governmental Business-type Primary Activities Activities Government $ (5,485,464] $ [5,485,464] [17 ,371 ,945] (17 ,371,945] [8,063,036] [8,063,036] [799,028] [799,028] [5, 126,427] (5, 126,427] (1 ,599,289] (1,599,289] [1 ,724,439) (1,724,439) (40, 169,628) (40, 169,628] 799,898 799,898 4,204,756 4,204,756 706,894 706,894 (53,892] (53,892] 5,657,656 5,657,656 [40, 169,628] 5,657,656 [34,511,972) 9,100,808 9, 100,808 2,486,666 2,486,666 1,372,532 1,372,532 12,906,032 12,906,032 8,832,312 8,832,312 6,899,586 6,899,586 92,820 129,144 221,964 2,002,864 103,082 2,105,946 4,308,834 [4,366,500) [57,666) 48,002,454 [4,134,274) 43,868,180 7,832,826 1,523,382 9,356,208 115,868,024 87,559,434 203,427,458 $ 123, 700,850 s 89,082,816 $ 212,783,666 The notes to the basic financial statements are an integral part of this statement. 17 Component Units Salina Salina Housing Airport Authori!l Authority [51,568] [1,981,408) [51,568) [1,981,408) 2,043,302 8,835 974 5,497 22,081 14,332 2,066,357 (37,236] 84,949 7 013,715 21,723,235 6,976,479 $ 21,808, 184 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS 43100 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,853,666 $ 847 $ 802,597 $ 2,265,055 Restricted cash Receivables (net) Accounts 1,257,980 476,551 Taxes 8,864,737 322,888 Interest 16,726 Inventory 152,982 Due from other funds 27,854 Total assets $ 16,173,945 $ 477,398 $ 1,125,485 $ 2,265,055 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 600,386 $ 263,937 $ 43,187 $ 17,775 Retainage payable 163,666 Due to other funds Total liabilities 600,386 263,937 43,187 181,441 Deferred inflows of resources Unavailable revenue -property taxes 8,691,050 Total deferred inflows of resources 8,691 ,050 Fund balance: Nonspendable 152,982 Restricted 213,461 1,072,347 Committed 1,658,876 Assigned 214,010 9,951 424,738 Unassigned 6,515,517 Total fund balances 6,882,509 213,461 1,082,298 2,083,614 Total liabilities, deferred inflows of resources and fund balances $ 16,173,945 $ 477,398 $ 1, 125,485 $ 2,265,055 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ $ 3,024,578 $ 1,462,554 $ 1,483,544 $ 6,896 $ 4,540,664 $ 19,440,401 2,001,589 2,001,589 54,161 123,914 2,864 1,915,470 2,521,302 11,708,927 16,726 152,982 9,656 37,510 3,024,578 $ 3,983,856 $ 1,547,361 $ 2,132,399 $ 4,543,528 $ 35,273,605 -$ -$ 560,602 $ 58,284 $ 162,754 $ 1,706,925 91,642 349,503 604,811 9,656 27,854 37,510 652,244 417,443 190,608 2,349,246 2,473,993 11,165,043 2,473,993 11,165,043 152,982 1,509,863 1,395,051 4,190,722 2,817,807 895,117 1,714,956 2,985,723 10,072,479 206,771 855,470 [27,854] 6,487,663 3,024,578 1,509,863 895,117 1,714,956 4,352,920 21,759,316 3,024,578 $ 3,983,856 $ 1,547,361 $ 2,132,399 $ 4,543,528 $ 35,273,605 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2017 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported an a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at. year end consist of: Compensated absences Net OPEB obligation Net pension liability Temporary notes payable Bonds payable Financing leases payable Loans payable 322, 143,628 115,567,034 2,744,388 4,548,909 28,800,959 6,811 ,742 55,994,305 157,868 12,171,090 $ 21 ,759,316 127,336 206,576,594 5,809,770 [1,400,363] [123,914] 2,363,597 Accrued interest on the bonds 182,225 [111,411,486] Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 123,700,850 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31 , 2017 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,943,754 $ -$ -$ Delinquent taxes 157,054 Motor vehicle taxes 1,014,976 General sales taxes 12,906,032 Selective sales taxes 8,251 ,546 Other taxes 5,215,264 1,684,322 Intergovernmental 1,133,310 1,435, 167 Special assessments Licenses and permits Charges for services 6,153,450 Investment revenue 3,336 480 2,777 13,381 Donations Miscellaneous 1,709,491 Total revenues 37,236,667 1,684,802 1,437,944 8,264,927 EXPENDITURES: Current General government 5,423,241 Public safety 21 ,628,730 Public works 5,328,315 495,919 Public health and sanitation 749,656 Culture and recreation 4,424,221 Planning and development 752,825 930,916 Miscellaneous Capital outlay 896,026 831 ,852 5,280,012 Debt service Principal retirement Interest and other charges Total expenditures 39,203,014 930,916 1,327,771 5,280,012 Excess [deficiency) of revenue and other sources over [under] expenditures and other [uses) [1 ,966,347] 753,886 110,173 2,984,915 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Transfers in 4,626,500 160,000 Transfers [out] [810,000] [723,942] [2 ,568,350] Total other financing sources [uses] 3,816,500 [723,942] 160,000 [2,568,350] Net change in fund balance 1,850,153 29,944 270, 173 416,565 Fund balance -Beginning of year 5,032,356 183,517 812, 125 1,667,049 Fund balance -End of year $ 6,882,509 $ 213,461 $ 1,082,298 $ 2,083,614 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,433,770 $ -$ -$ -$ 11,377,524 52,896 209,950 357,556 1,372,532 12,906,032 580,766 8,832,312 6,899,586 494,337 1,473,276 4,536,090 1,538,904 1,538,904 5,300 5,300 246,458 480,385 6,880,293 12,794 17,104 1,104 28,178 79,154 110,606 110,606 63,818 77,763 1,851,072 12,794 4,400,230 558,155 247,562 2,756,274 56,599,355 5,423,241 21 ,628,730 223,912 6,048,146 347,442 1,097,098 1,718,877 6, 143,098 31,081 86,832 1,801,654 35 35 1,049,381 4,210,392 5,262,024 751,068 18,280,755 4,907,918 180,000 5,087,918 1,490,423 139,036 50,486 90,935 1,770,880 1,049,381 6,398,341 4,349,428 5,343,591 3,399,101 67,281,555 [1,036,587) [1,998, 111) [3, 791 ,273) [5,096,029) [642,827) [10,682,200) 1,000 9,309,000 9,310,000 2, 180,000 2,180,000 16,751 78,361 95, 112 2,241,309 1,310,983 8,338,792 [57,666) [4, 159,958) 2,259,060 11,509,695 1,310,983 15,763,946 [1 ,036,587] 260,949 7,718,422 [5,096,029) 668,156 5,081 ,746 4,061 ,165 1,248,914 [6,823,305] 6,810,985 3,684,764 16,677,570 $ 3,024,578 $ 1,509,863 $ 895, 117 $ 1,714,956 $ 4,352,920 $ 21 ,759,316 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31 , 2017 Total Net Change In Fund Balances.-Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is [151 ,301] 15,709,428 [6,066,797] $ 5,081,746 9,491 ,330 the amount by which interest decreased . 46,441 An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. 285,664 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [123,914] Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds . 30,943 Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. [723,482] Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. [11,476,527] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities. 5,220,625 Changes In Net Position of Governmental Activities $ 7,832,826 The notes to the basic financial statements are an integral part of this statement. 21 Revenues Taxes Real estate taxes Delinquent taxes Motor vehicle taxes General sales tax Other taxes Intergovernmental Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Capital outlay Total expenditures Excess [deficiency) of revenues over [under) expenditures Other financing sources [uses] Transfers in Transfers [out) Total other financing sources [uses) Excess [deficiency] of revenues and other sources over [under) expenditures and other [uses) Unreserved fund balance, January 1 Prior year cancelled encumbrances CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS} GENERAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 8,943,754 $ 9,075,239 $ 9,075,239 157,054 125,000 125,000 1,016,439 991 ,987 991,987 12,906,032 12,805,000 12,805,000 5,215,264 6,804,632 6,804,632 1,133,310 1,145,000 1,145,000 5,481,314 6,025,327 6,025,327 11,540 1,709,490 183,739 183,739 36,574,197 37,155,924 37,155,924 4,967,756 3,405,885 3,405,885 21,750,244 20,726,693 20,726,693 5,337,833 5,790,152 5,790,152 749,656 4,426,706 5,283,377 5,283,377 752,825 2,213,740 2,213,740 951,921 4,259,262 4,259,262 38,936,941 41,679,109 41 ,679,109 [2,362,744) [4,523, 185) [4,523, 185) 4,626,500 4,675,089 4,675,089 [810,000) [3,661, 132) [3,661,132) 3,816,500 1,013,957 1,013,957 1,453,756 [3,509,228) [3,509,228) 3,509,762 3,509,228 3,509,228 103,606 Unreserved fund balance, December 31 5,067,124 $ -$ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 16,726 1,257,980 8,864,737 152,982 [8,691,050) 214,010 $ 6,882,509 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative) $ [131,485) 32,054 24,452 101,032 [1,589,368) [11,690) [544,013) 11,540 1,525,751 [581,727) [1,561 ,871) [1,023,551) 452,319 [749,656) 856,671 1,460,915 3,307,341 2,742,168 2,160,441 [48,589) 2,851,132 2,802,543 4,962,984 534 103,606 $ 5,067,124 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Final Revenues Other taxes $ 1,616,808 $ 1,608,000 $ 1,658,000 Investment revenue 480 Total revenues 1,617,288 1,608,000 1,658,000 Expenditures Planning and development 930,916 893,000 893,000 Total expenditures 930,916 893,000 893,000 Excess (deficiency] of revenues over [under) expenditures 686,372 715,000 765,000 Other financing sources [uses) Transfers [out) [723,942) [683,800) [733,800] Total other financing sources [uses] [723,942] [683,800] [733,800) Excess [deficiency) of revenues and other sources over [under) expenditures and other [uses] [37,570) 31 ,200 31 ,200 Unreserved fund balance, January 1 (225,520) 80,343 368 Unreserved fund balance, December 31 [263,090) $ 111 ,543 $ 31 ,568 Reconciliation to GAAP Accounts receivable 476,551 GAAP Fund Balance, December 31 $ 213,461 See independent auditor's report on the financial statements. 23 Variance with Final Budget Positive [Negative] $ (41,192] 480 [40,712] [37,916] [37,916) [78 ,628) 9,858 9,858 [68,770) [225,888) $ [294,658) CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,435,031 $ 1,370,400 $ 1,370,400 Investment revenue 2,777 6,000 6,000 Total revenues 1,437,808 1,376,400 1,376,400 Expenditures Public works 495,919 569,915 569,915 Capital outlay 745,820 946,243 946,243 Total expenditures 1,241,739 1,516,158 1,516,158 Excess [deficiency] of revenues over [under] expenditures 196,069 [139,758] Other financing sources [uses] Transfers in 160,000 160,000 Total other financing sources [uses] 160,000 160,000 Excess [deficiency] of revenues and other sources over [under] 356,069 20,242 expenditures and other [uses] Unreserved fund balance, January 1 387,919 669,880 Prior year cancelled encumbrances 5,471 Unreserved fund balance, December 31 749,459 $ 690,122 $ Reconciliation to GAAP Taxes receivable 322,888 Current year encumbrances 9,951 GAAP Fund Balance, December 31 $ 1,082,298 See independent auditor's report on the financial statements. 24 [139,758] 160,000 160,000 20,242 669,880 690,122 Variance with Final Budget Positive [Negative] $ 64,631 [3,223] 61,408 73,996 200,423 274,419 335,827 335,827 [281 ,961] 5,471 $ 59,337 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,251 ,546 $ 8,043,656 $ 8,269,993 Investment revenue 13,381 5,000 5,000 Total revenues 8,264,927 8,048,656 8,274,993 Expenditures Capital outlay 5,270,351 4,620,500 6,470,500 Total expenditures 5,270,351 4,620,500 6,470,500 Excess [deficiency) of revenues over [under) expenditures 2,994,576 3,428,156 1,804,493 Other financing sources [uses] Transfers [out) [2,568,350) [3,750,000) [2,500,000) Total other financing sources [uses] [2,568,350) [3,750,000] [2,500,000) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 426,226 [321 ,844] [695,507) Unreserved fund balance, January 1 1,056,648 785,304 1,797,359 Prior year cancelled encumbrances 176,002 Unreserved fund balance, December 31 1,658,876 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 424,738 GAAP Fund Balance, December 31 $ 2,083,614 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [18,447) 8,381 [10,066) 1,200, 149 1,200,149 1,190,083 [68,350) [68,350) 1, 121,733 [740,711) 176,002 $ 557,024 Cl1Y OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2017 Business-Type Activities: Ente!:Erise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Diseosal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments $ 6,515,002 $ 22,115,048 $1,568,556 $ 137,273 $ 30,335,879 $ 3,049,833 Receivables (net of allowance for uncollectibles) Accounts 194,086 1,490,712 218,145 1,902,943 Interest 16 16 Inventory and prepaid supplies 408,562 26,690 435,252 165,125 Total current assets 6,709,104 24,014,322 1,786,701 163,963 32,674,090 3,214,958 Capital assets: Nondepreciable capital assets: Construction in progress 2,149,789 2,149,789 Land 682,000 844,806 15,000 1,541,806 Depreciable capital assets: Capital assets 11,312,996 136,213,033 2,377,725 1,161,740 151,065,494 184,326 Less: accumulated depreciation 8,798,898 52,319,351 1,551,983 781,296 63,451 ,528 160,966 Total capital assets 3, 196,098 86,888,277 825,742 395,444 91,305,561 23,360 Total assets 9,905,202 110,902,599 2,612,443 559,407 123,979,651 3,238,318 Deferred outflows of resources: Pension deferred outflows of resources 78,469 439,410 102,050 31,436 651,365 31,240 Deferred charge on bond issuance 236, 123 236,123 Total deferred outflows of resources 78,469 675,533 102,050 31,436 887 488 31 240 Total assets and deferred outflows of resources $ 9,983,671 $ 111,578,132 $ 2,714,493 $ 590,843 $ 124,867,139 $ 3,269,558 Liabilities and deferred inflows of resources: Current liabilities Accounts payable $ 24,885 $ 535,111 $ 18,675 $ 9,364 $ 588,035 $ 57,890 Retainage payable 10,681 10,681 Interest payable 10,937 225,689 236,626 Meter deposits payable 176,114 176,114 Current portion of compensated absences payable 33,697 203,412 68,558 38,548 344,215 28,707 Current portion of accrued claims payable 572,832 Current portion of loans payable 571,773 571,773 Current portion of general obligation bonds payable 375,000 867,407 1,242,407 Current portion of revenue bonds payable 708,696 708,696 Total current liabilities 444,519 3,298,883 87,233 47,912 3,878,547 659,429 Noncurrent liabilities: Compensated absences payable 29,185 176,179 59,381 33,387 298,132 24,863 Accrued claims payable 44,772 Net OPEB Obligation 78,890 374,881 116,258 34,616 604,645 Net pension liability 402,327 2,202,239 557,424 171 ,620 3,333,610 165,559 Payable from restricted assets Loans payable 8,291,037 8,291 ,037 General obligation bonds payable 780,000 4,498,026 5,278,026 Revenue bonds payable 11 ,898,051 11,898,051 Landfill post-closure care liabilities 1,981 498 1,981,498 Total noncurrent liabilities 3,271,900 27,440,413 733,063 239,623 31,684,999 235,194 Total liabilities 3,716,419 30,739,296 820,296 287,535 35,563,546 894,623 Deferred inflows of resources Pension deferred inflows of resources 30 040 141,970 37,644 11,123 220,777 11,338 Total deferred inflows of resources 30,040 141,970 37,644 11,123 220,777 11,338 Total liabilities and deferred inflows of resources $ 3,746,459 $ 30,881,266 $ 857,940 $ 298,658 $ 35,784,323 $ 905,961 Net position Net investment in capital assets $ 2,041,098 $ 60,053,287 $ 825,742 $ 395,444 $ 63,315,571 $ 23,360 Restricted Restricted for bond retirement 1,512,125 1,512,125 Unrestricted 4,196,114 19, 131,454 1,030,811 (103,259) 24,255, 120 2,340,237 Total net position $ 6,237,212 $ 80,696,866 $1,856,553 $ 292,185 $ 89,082,816 $ 2,363,597 The notes to the basic financial statements are an integral part of this statement. 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31 , 2017 Business-Type Activities: EnterErise Funds Solid Waste Water and DisEosal Sewer Sanitation Golf Course Operating revenues Charges for services $3,164,761 $19,855,033 $2,884,526 $ 798,368 Miscellaneous 20,552 5,522 77,008 Total operating revenues 3'.185,313 19,860,555 2,884,526 875,376 Operating expenses General government Public works 1,469,858 11 ,398,035 2,024,390 Recreation 820,627 Depreciation 850,548 3,322,113 153,242 31 ,633 Total operating expenses 2,320,406 14,720,148 2,177,632 852,260 Operating income (loss] 864,907 5,140,407 706,894 23,116 Nonoperating revenues [expenses] Investment revenue 24,658 98,307 5,793 386 Interest expense [44,457] (923,217] Gain/[loss] on disposal of fixed assets Accretion of bond premium 11,560 Amortization of bond issuance costs (18,472) Total nonoperating revenues [expenses] (19,799) (831 ,822) 5,793 386 Income [loss] before transfers 845,108 4,308,585 712,687 23,502 Transfers from [to] other funds Transfers in Transfers [out] (540,000) (3,450,000) (376,500) Total transfers (540,000) (3,450,000) (376,500) Change in net position 305,108 858,585 336, 187 23,502 Net position, January 1 5,932,104 79,838,281 1,520,366 268,683 Net position, December 31 $ 6,237,212 $ 80,696,866 $1,856,553 $ 292,185 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 26,702,688 $8,323,935 103,082 41, 186 26,805,770 8,365, 121 8,209,819 14,892,283 820,627 4,357,536 9,260 20,070,446 8,219,079 6,735,324 146,042 129,144 13,666 (967,674] (4,044] 11,560 (18,472) (845,442) 9,622 5,889,882 155,664 130,000 (4,366,500) (4,366,500] 130,000 1,523,382 285,664 87,559,434 2,077,933 $ 89,082,816 $2,363,597 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: Enter[!rise Funds Solid Waste Water and Dis[!osal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $ 3,160, 158 $ 19,691 ,753 $ 2,856,083 $ 798,368 Cash paid to suppliers of goods or services [828,507] [7,171,517] [1 , 101,055] [400,392] Cash paid to employees [607,960] [3,976,523] [791 ,564] [423,329] Other operating receipts 20,552 5,522 77,008 Net cash provided by [used in] operating activities 1,744,243 8,549,235 963,464 51,655 Cash flows from capital and related financing activities Purchase and construction of capital assets [4,719,132] [84,953] [27,642] Proceeds from sale of capital assets [47,023] Proceeds from loans 2,116,375 Principal payments -loans [685,589] Principal payments -general obligation bonds [365,000] [747,082] Principal payments -revenue bonds [675,000] Interest paid [45,118) [960,485) Net cash provided by [used in] capital and related financing activities [410,118) [5,717,936) (84,953) (27,642) Cash flows from investing activities Interest received 24,658 98,307 5,793 386 Cash flows from noncapital financing activities Transfers in Transfers [out] [540,000) [3,450,000) [376,500) Net cash provided by [used in] noncapital financing activities [540,000J [3,450,000) [376,500) Net increase [decrease] in cash and cash equivalents 818,783 [520,394] 507,804 24,399 Cash and cash equivalents, January 1 5,696,219 22,635,442 1,060,752 112,874 Cash and cash equivalents, December 31 $6,515,002 $ 22.115,048 $1,568,556 $ 137,273 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,506,362 $ 8,392,053 [9,501,471] [7,875,819] [5,799,376] [275,772] 103,082 41 , 185 11,308,597 281,647 [4,831,727] [47,023] 2, 116,375 (685,589] [1, 112,082] (675,000] (1,005,603) (6,240,649) 129, 144 13,666 130,000 [4,366,500) [4,366,500) 130,000 830,592 425,313 29,505,287 2,624,520 $ 30,335,879 $ 3,049,833 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31 , 2017 Business-Type Activities: Enterprise Funds Total Internal Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Service Funds Operating income [loss] $ 864,907 $ 5, 140,407 $ 706,894 $ 23, 116 $ 6,735,324 $ 146,042 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in accounts receivable [Increase] decrease in inventory [Increase) decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease) in retainage payable Increase [decrease) in accrued compensated absences Increase [decrease) in claims payable Increase [decrease) in landfill postclosure liabilities Increase [decrease) in net pension liability Increase [decrease) in net OBEB obligation Increase [decrease) in meter deposits payable Increase [decrease) in deferred inflows Net cash provided by [used in) operating activities $ 850,548 [4,603) [5,914) 1,701 [16,221) 63,649 [1, 191) [12,601) 3,968 1,744,243 3,322,113 [160,456) 71,210 [19,295) 433,569 [282,912] (27,819) [3,883) 66,180 [2,824) 12,945 $ 8,549,235 153,242 31 ,633 [28,443) [3,706) [2,089) [287) 4,827 6,743 11 ,794 4,467 [421) [58] 116,258 [10,445) 1,402 192 $963,464 $ 51 ,655 The notes to the basic financial statements are an integral part of this statement. 29 4,357,536 9,260 [193,502) 67,504 24,761 [27,585) [1,162) 446,840 20,018 [282,912) [27,779) 14,065 68,117 63,649 [5,553) [234) 159,392 [2,824) 18,507 780 $ 11,308,597 $ 281,647 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2017 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 389,555 $ 389,555 $ 389,555 $ 389,555 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five- member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2017. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469 s. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued} Joint Ventures {Continued) Total unencumbered cash, December 31, 2017 Total change in unencumbered cash, year ended December 31, 2017 Total cash receipts, year ended December 31, 2017 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building $ Authority (Audited) 1,173,041 22,690 1,431, 170 440,883 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the · primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program . Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker's compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General fund -To account for resources traditionally associated with government, which are not required legally, or by sound financial management to be accounted for in another fund. Tourism and convention fund -To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or improvement of streets within the City. Sales tax capital fund -To account for 93% of the .40 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt service fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City' reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the municipal golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1 . Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2018. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out {FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period, Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5 -15 6 -10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001 , a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8. Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Maior Governmental Funds Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Governmental Governmental ~ ~ ~ l&l!ilaJ lmQrQ)'.!iUDcat ~ ~ Qa.li&!l ~ ~ Fund Balances: Nonspendable for: Inventory 152,982 152,982 Restricted for: Public wori<s 1,072,347 1,072,347 Public health and sanitation 164 164 Culture and recreation 124,221 124,221 Planning and development 213,461 232,778 446,239 Debt payments 1,509,863 1,037,888 2,547,751 Committed for: Public safety 375,147 375, 147 Culture and recreation 690,067 690,067 Planning and development 1,714,956 18,589 1 ,733,545 Cemetery 495,895 495,895 Capital improvements 1,658,876 2,817,807 895,117 1,406,025 6,777,825 Assigned for: General government 28,477 28,477 Public safety 121,515 121,515 Public works 61,533 61,533 Culture and recreation 2,485 2,485 Capital improvements 9,951 424,738 206,771 641,460 Unassigned: 6,515,517 ------------------(27,854) 6 487,663 Total Fund Balances $ 6,882,509 ~ $ 1,082,298 $ 2,083,614 $ 3,024,578 $ 1,509,863 $ 895,1 17 $ 1,714,956 $ 4,352,920 $ 21 ,759,316 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued} 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, the City reports changes in the pension liability proportion and contributions made to the pension plan after the measurement date of the net pension liability as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue -property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, the City reports differences between expected and actual experience, differences between projected and actual investment earnings, changes in assumptions, and changes in the pension liability proportion as deferred inflows for governmental activities. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11 . Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund , special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2017 budget was amended for the Tourism and Convention Fund and the Sales Tax Capital Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31 , 2017 in the Tourism and Convention Fund which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31 , 2017, the statutory limit for the City was $142,000,537, providing a debt margin of $80,704,353. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 3. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401 . The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131 . This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's investors service or Standard and Poor's corporation , and various other investments as specified in KSA 10-131. At December 31, 2017, the City has the following investments: Investment Type Fair Value Kansas Municipal Investment Pool $ 305,523 S&P AAAf/S1+ Total fair value $ 305,523 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S . government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31 2017, the City's deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31 , 2017, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,439,071 , $437,246, and $125,272, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables C. Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt Capital SFH General Convention Gas Service Projects QalicB Primary Government Receivables: Accounts $ 6,066.477 $ 476,551 $ $ $ 54,161 123,914 Taxes 8.864,737 322,888 2,521,302 Interest 16 726 ---Gross receivables 14.947.940 476,551 322,888 2,521,302 54,161 123,914 Less: allowance for uncollectibles [4,808,497) ---Total 10,139,443 $ 476 551 ~ 322 888 ~ 2 521,302 54161 123,914 Solid Water Waste and Diseosal Sewer Primary Government Receivables: Accounts $ 194,086 $ 2,790,241 Taxes Interest 16 Gross receivables 194,102 2,790,241 Less: allowance for uncolleclibles [1,299,529) Total ~ 194102 ~ 1,490,712 Component Units Salina Airport Authority Accounts Less: allowance for uncol1ectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Interest Total Salina Housing Authority Total lnterfund Receivables and Payables The composition of interfund balances as of December 31, 2017, is as follows: Fund Types General Fund Capital Project Fund SFH QalicB Fund Police Grants Fund Due From $ 27,854 9,656 Due To $ 9,656 27,854 $ 37,510 $ 37,510 Other Governmental Subtotal 16,034 $ 6,737,137 11.708,927 16 726 16,034 18,462,790 [13,170) [4,821,667] ~ 2,864 ~ 13 641 123 Sanitation Total 408,313 10,129,777 11,708,927 16742 408,313 21,855,446 [190,168) [6,311,364) 218 145 ~ 15 544,082 268,134 [1,500) 266 634 18,934 (1,000) 435 18369 ~ 285,003 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2017, was as follows: Balance Adj. Bal. Balance 12/31/2016 Adjustments 12/31/2016 Additions Retirements 12/31/2017 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress $ 30,810,942 $ $ 30,810,942 $ 8,706,902 s 10,608,276 $ 28,909,568 Land 24,001,859 24,001,859 91,000 24,092,859 Capital assets, being depreciated Infrastructure 193,545,859 193,545,859 5,769,479 199,315,338 Buildings and improvements 43,599,404 43,599,404 9,417,305 7,030 53,009,679 Vehicles 9,551,939 9,551,939 1,276,732 442,172 10,386,499 Equipment, furniture and fixtures 5,628,958 5,628,958 1,056,286 71,233 6,614,011 Total capital assets 307,138,961 307, 138,961 26,317,704 11,128,711 322,327,954 Less accumulated depreciation for: Infrastructure 80,432,297 80,432,297 3,925,147 84,357,444 Buildings and improvements 18,742,249 18,742,249 1,191,358 3,156 19,930,451 Vehicles 6,403,701 6,403,701 763,511 300,936 6,866,276 Equipment, furniture and fixtures 4,438,786 4,438,786 196,041 60,998 4,573,829 Total accumulated depreciation 110,017,033 110,017,033 6,076,057 365,090 115,728,000 Governmental activities capital assets, net $ 197,121,928 $ -$ 197, 121,928 $ 20,241,647 $ 10,763,621 $ 206,599,954 Business-type activities: Capital assets, not being depreciated Construction in progress $ 15,727,780 $ $ 15,727,780 $ 4,389,421 $ 17,967,412 $ 2, 149,789 Land 1,541,806 1,541,806 1,541,806 Capital assets, being depreciated Infrastructure 101,119,995 101,119,995 18,337,654 119,457,649 Buildings and improvements 22,579,933 22,579,933 22,579,933 Vehicles 3,652,923 3,652,923 84,953 47,024 3,690,852 Equipment, furniture and fixtures 5,302,926 5,302,926 34,134 5,337,060 Total capital assets 149,925,363 149,925,363 22,846,162 18,014,436 154,757,089 Less accumulated depreciation for: Infrastructure 40,241 ,102 40,241 ,102 3,488,860 43,729,962 Buildings and improvements 12,796,638 12,796,638 421,287 13,217,925 Vehicles 2,492,221 2,492,221 205,045 47,024 2,650,242 Equipment, furniture and fixtures 3611055 3,611 ,055 242 344 3,853,399 Total accumulated depreciation 59,141 ,016 59,141 ,016 4,357,536 47,024 63,451,528 Business-type activities capital assets, net $ 90,784,347 $ -$ 90,784,347 $ 18,488,626 $ 17,967,412 91,305,561 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City's depreciation expense was charged to governmental functions as follows: Governmental Activities: General government $ 75,433 Public safety 721,766 Public works 4,280,905 Public health 30,270 Culture and recreation 811,875 Planning and development 1551808 Total depreciation $ 6,076,057 Business-type Activities: Solid Waste Disposal $ 850,548 Water and Sewer 3,322,113 Sanitation 153,242 Golf Course Division 31 633 Total depreciation $ 4,357,536 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2017: Restated Balance Balance January 1, December 31 , 2017 Additions ~ 2.Qjl Governmental activities: General obligation bonds $ 51 ,816,400 $ 9,388,370 $ 5,210,465 $ 55,994,305 Financing lease 321 ,174 163,306 157,868 Loans payable 12,157,127 13,963 12,171 ,090 Accrued compensation 2,803,847 1,493,457 1,499,346 2,797,958 Temporary notes 11 ,505,000 2,196,742 6,890,000 6811742 Total $ 78,603,548 $ 13,092,532 $ 13,763, 117 $ 77 ,932,963 . Business-type activities: General obligation bonds $ 7,640,380 $ $ 1,119,947 $ 6,520,433 Revenue bonds 13,285,443 678,696 12,606,747 Loans payable 7,432,024 2,116,375 685,589 8,862,810 Accrued compensation 670,126 316436 344 215 642 347 Total $ 29,027,973 $ 2,432,811 $ 2,828,447 $ 28,632,337 Component Units: General obligation bonds $ 22,632,000 $ 2,520,000 $ 1,065,000 $ 24,087,000 Less unamortized discount [204,733] [53,956] [179,204] [79,485] Special assessment debt 11,268 2061 9,207 Total component units $ 22,438,535 $ 2,466,044 $ 887,857 $ 24,016,722 44 Amounts Due Within ~ $ 5,561 ,280 157,868 1,499,345 2,196,742 $ 9,415,235 $ 1,242,407 708,696 571,773 344 215 $ 2,867,091 $ 1,220,000 2,153 $ 1,222,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal Improvements 2008B, due 7/1/2028 Internal Improvements 2009A, due 10/1/2029 Internal Improvements 2010A, due 10/1/2025 Internal Improvements 201 OB, due 10/1 /2023 Internal Improvements 2011A, due 10/1/2031 Internal Improvements 2012A, due 10/1/2027 Refunding 2012B, due 10/1/2020 Internal Improvements 2013A, due 10/1 /28 Internal Improvements 2013B, due 10/1 /33 Internal Improvements 2014A, due 10/1/34 Improvement and Refunding 2015A, due 10/1/35 Internal Improvements 2016A, due 10/1 /36 Refunding 2016B, due 10/1/2031 Internal Improvements 2017A, due 10/1/37 Total general obligation bonds Revenue Bonds Revenue 2011, due 10/1/31 Total revenue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2017-1, due 8/1/2018 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable Financing Lease, due 2/10/2017 Equipment, due 5/8/18 Software, due 10/10/18 45 Original Issue $ 3,525,000 23,695,000 6,916,592 7,973,044 6,587,985 2,383,903 3,817,108 1,369,380 4,485,073 7,839,050 7,157,688 6,681 ,766 15,141 ,004 9,388,370 $ 16,193,925 $ 4,615,000 2,180,000 $ 9,330,000 4,250,000 12,640,000 $ 146,235 456,370 Interest Rates 3.65% to 5.00% 2.00% to 5.00% 2.00% to 3.875% 0.50% to 3.00% 2.00% to 5.00% 1.00% to 2.45% 1.00% to 1.40% 3.00% to 4.00% 0.60% to 3.65% 2.50% to 3.75% 2.00% to 4.00% 2.00% to 3.00% 2.00% to 5.00% 3.00% to 3.375% 2.00% to 4.60% 1.00% 2.00% 2.12% 2.78% 1.58% 3.28% 3.19% Bonds Outstanding $ 1,845,000 5,220,404 968,318 2,297,173 1,444,598 1,662,602 902,040 1,086,880 3,539 ,058 6,088,693 6,494,420 6,436,178 15,141,004 9,388,370 $ 62,514,738 $ 12,606,747 $ 12,606,747 $ 4,615,000 2,196,742 $ 6,811 ,742 $ 4,833,476 4,029,334 12,171,090 $ 21,033,900 $ 38,347 119,521 $ 157,868 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued} E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 20098, due 2021 General Obligation 2011 A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1, due 2019 Temporary Note 2017-1 , due 2019 General Obligation 2017A, due 2030 General Obligation 20178, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $ 6,080,000 11,820,000 3,075,000 657,000 1,440,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 1.43% 3.04% 3.02% 4.47% Bonds Outstanding $ 1,545,000 3,160,000 2,195,000 657,000 1,440,000 10,255,000 4,835,000 33,023 [112,508] 24,007,515 9,207 9,207 $ 24,016,722 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2018 $ 6,803,687 $ 1,899,204 $ 8,702,891 2019 6,923,687 1,627,845 8,551 ,532 2020 4,778,686 1,431,514 6,210,200 2021 4,498,434 1,298,645 5,797,079 2022 4,577,283 1,150,154 5,727,437 2023-2027 18,891,638 18,891,638 37,783,276 2028-2032 10,234,792 1,648,156 11 ,882,948 2033-2037 5,806,531 453,346 6,259!877 Total $ 62,514,738 $ 28,400,502 $ 90,915,240 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued} Year 2018 $ 2019 2020 2021 2022 2023 -2027 2028 -2031 Total $ General Obligation -Component Units Bonds Outstanding 1,220,000 1,310,000 1,350,000 1,400,000 1,455,000 7,970,000 7,285,000 21 ,990 1000 $ Interest Due 746,880 $ 652,277 612,110 565,880 511 , 135 1,852,938 575,795 Total 1,966,880 1,962,277 1,962, 110 1,965,880 1,966, 135 9,822,938 7,860,795 $ 5,517,015 $ 27,507,015 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prima!:J'. Government Bonds Interest Year Outstanding Due Total 2018 $ 708,696 $ 509,141 $ 1,217,837 2019 728,696 487,991 1,216,687 2020 748,696 466,242 1,214,938 2021 773,696 798,696 1,572,392 2022 798,696 414,148 1,212,844 2023-2027 4,498,480 1,563, 177 6,061 ,657 2028-2031 4,349,787 504,816 4,854,603 Total $ 12,606,747 $ 4,744,211 $ 17,350,958 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Go..ernment Notes Interest Year Outstanding Due Total 2018 $ 2,196,742 $ 90,234 $ 2,286,976 2019 4,615,000 46, 150 4,661 ,150 Total $ 6,811 ,742 $ 136,384 $ 6,948, 126 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for financing leases -to be paid from revenues: Ca12ital Lease -PrimaD'. Government Lease Interest Year Outstanding Due Total 2018 $ 157,868 $ 5,071 $ 162!939 Total $ 157,868 $ 5,071 $ 162,939 Kansas Public Water Supply Loans. The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Kansas Water Supply Loans -Primary GO\.emment Loans Interest Year Outstanding Due Total 2018 $ 2019 2020 2021 2022 2023-2027 2028-2032 2033-2035 571 ,773 580,276 593,764 607,573 621,707 3,332,540 3,739,637 2,150,661 12,197,931 Total =$========= $ $ 277, 128 $ 848,901 268,625 848,901 255, 137 848,901 241,328 848,901 227, 194 848,901 911,965 4,244,505 504,868 4,244,505 95,361 2,246,022 2,781,606 $ 14,979,537 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll , LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due.· At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $6,016,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Dakotas Note B -On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31 , 2017, the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31 , 2017, the note balance was $2,674,000. CNMC Note B -On July 27, 2016, a $1 ,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $1 ,326,000. As of December 31 , 2017, the principal balance of these four loans net of $468,910 of unamortized debt issuance costs was $12, 171 ,090. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2018 $ 2,153 $ 412 $ 2,565 2019 2,249 315 2,564 2020 2,350 215 2,565 2021 2,455 110 2,565 Total $ 9,207 $ 1,052 $ 101259 Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease. On July 27 , 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2017, SFH QalicB earned $246,458 of rental income under the terms of the Net Lease. As of December 31 , 2017, rental income of $123,914 remained receivable from the City. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Premises lease (continued). The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31 , 2017: 2018 $ 130,000 2019 130,000 2020 130,000 2021 130,000 2022 130,000 2023-2027 1,917,500 2028-2032 3,250,000 2033-2037 3,250,000 2038-2042 3,250,000 2043-2046 2,275,000 $ 14,592,500 F. Operating Leases On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City's share of the lease agreement is 40% and will pay the lessor $1, 100,000, plus interest, through monthly payments of $7 ,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2017. The future minimum lease payments for the lease are as follows : Year Amount 2018 $ 93,926 2019 93,926 2020 93,926 2021 93,926 2022 93,926 2023-2027 469,633 Total $ 939,263 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transf~r Out Major Funds: General fund $4,626,500 $ 810,000 Tourism and convention fund 723,942 Special gas fund 160,000 Sales tax capital fund 2,568,350 Debt service 2,241 ,309 Capital projects 57,666 Salina Fieldhouse QALICB, Inc. Other governmental funds 1,310,983 Agency funds 57,666 Solid waste disposal fund 540,000 Water and sewer fund 3,450,000 Sanitation fund 376,500 Central garage fund 130,000 Total Transfers $8,526,458 $ 8,526,458 The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporling for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan . Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law, and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 74-4921 . All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2017. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.46% 19.03% Statutory Employer Capped Rate 8.46% 19.03% Member contribution rates as a percentage of eligible compensation for the fiscal year 2017 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: • State/School • Local • Police and Firemen • Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City's share of the collective pension amounts as of December 31 , 2017, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31 , 2017. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2017, the City's proportion for the Local employees group was 0.811%, which was an increase of .05% from its proportion measured at June 30, 2016. At June 30, 2017, the City's proportion for the Police and Firemen group was 2.191 %, which was an increase of .011 % from its proportion measured at June 30, 2016. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2017 and 2016, the City and its component units reported a liability of $33,276,991 and $32,923,025, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2016, which was rolled forward to June 30, 2017, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31 , 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2017 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return Global Equity 47.00% 6.80% Fixed Income 13.00% 1.25% Yield driven 8.00% 6.55% Real Return 11.00% 1.71% Real estate 11 .00% 5.05% Alternatives 8.00% 9.85% Short-term investments 2.00% -0.25% 100 00% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System's Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 · Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate . The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8. 75%) than the current rate: 1% Decrease (6.75%) $ 16,927,244 29 148 713 Discount Rate (7.75%) 1% Increase (8.75%) Local $ 11 ,753,246 $ 7,391,770 Police & Firemen Total 20.546.882 13.345.922 $ 46,075,957 $ 32,300, 128 _$ ___ 2_0..._,7_37 ....... 6_9_2 Pension Expense. For the year ended December 31 , 2017, the City recognized Local pension expense of $1, 138,591 and Police and Firemen pension expense of $2,722,012, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority's and Salina Airport Authority's portion of the Local pension expense were $32,442 and $41,605, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31 , 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows of resources of resources Differences between actual and expected experience $ 56,846 $ 406,403 Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion 595,232 368,680 632,961 85,945 576,693 310,651 2,230,412 Total ..,$ __ ..._.......,_ $ 802,999 Police & Firemen Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total 56 Deferred outflows Deferred inflows of resources of resources $ 993,261 $ 153,700 $ 1,006,499 761 ,169 1,434,755 91,820 66,279 583,959 4,261,963 _$ __ 82-'9..._,4_7_9 CITY OF SALINA, KANSAS NOTES T:O THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2017, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Housing Authori!}'. Ai!Eort Authori!}'. Deferred outflows Deferred inflows Deferred outflows Deferred inflows ~ Qf [!1SQU[l<!1S Qf C!1SQU[l<!1S Qf t!1SQU[l<!1~ Qf teSQL!Cl<!1~ Differences between actual and expected experience $ 2,167 $ 6,740 $ 2,919 $ 20,866 Contributions subsequent to the measurement date 36,983 5,290 Net differences between projected and actual earnings on investments 44,110 18,930 Changes in assumptions 3,493 32,499 4,413 Changes in proportion 2 467 5 096 45 547 71 207 Total $ 85 727 $ 15,329 $ 105185 $ 96 486 $1,601,731 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows) Outflows (Inflows) Outflows December 31, Amount Amount Total 2018 $ (8,406) $ 356,816 $ 348,410 2019 449,682 1,137,553 1,587,235 2020 306,743 714,701 1,021,444 2021 (6 ,545) 58,150 51 ,605 2022 90,707 158,765 249,472 Total $ 832,181 $ 2,425,985 $ 3,258,166 $36,983 and $5,290 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 , 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended (Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ 2,399 $ (17,980] $ [15,581] 2019 16,286 7,594 23,880 2020 12,198 9,651 21,849 2021 134 (2,028] (1,894] 2022 2,398 6,172 8,570 Total $ 33,415 $ 3,409 $ 36,824 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan {l.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan . Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $177,141 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2017 2016 Unpaid claims, January 1 $ 255,154 $ 281,601 Incurred claims (including IBNRs) 622,556 947,583 Claim payments [655,797] [974,030] Unpaid claims, December 31 $ 221,913 $ 255,154 The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 $ $ 2017 2016 294,333 $ 275,440 4,244,648 3,951 ,548 [4, 143,290) [3,932,655) 395,691 $ 294,333 The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2017. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2017. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December31, 2017. Project Authorization Ex12enditures Markley-Magnolia W Sewer $ 5,150,000 $ 200,718 Cloud from Ohio to Levee 155,014 69,242 Ninth and Cloud Intersection Realignn 1,100,000 1,048,542 Bicentennial Center Improvements 10,200,000 12,344,709 Lakewood Middle School Safe Route 81,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 Water Well 13 & 14 Maintenance 52,184 50,830 Pavement Condition Survey 36,222 33,909 Community Fieldhouse 6,937,827 8,681,599 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58,858 Rebuild High Service Pump P-203 24,187 6,259 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18,128 2017 Country Club Road lmprovemen 1,200,000 953,747 Dowtown ST AR District 58,000 87,312 Downtown CID -Alley 1, 159 Downtown TIF 1,944 2017 Mill & Inlay 1,577,502 1,413,554 2017 Major Concrete Rehab 469,472 423,675 Downtown Streetscape 12,165,000 1, 109,400 Smoky Hill River Renewal 3,200,000 1,429,129 S Well Field & WTP Phase 1 1,964,525 366,655 2017 Sidewalks 69,092 53,105 Police Training Facility 4,900,000 4,204 Beechcraft Road lmprovements-Airpo 1,500,000 401 Indiana Ave Trail 79,262 74,486 Preliminary Design Broadway lmpr 50,000 50,000 2018 Pavement Sealing 325,000 275 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina· Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May, 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1 ), Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011 , Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1 ). Count II of the Counterclaim alleges a claim .for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1 ,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during 01 2018. The Feasibility Study portion of the CAFO scope of work was also completed during 01 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work are scheduled to be completed during 02 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 04 2018. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Postemployment Health Care Plan Plan Description. The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. Plan participants contributed approximately $265,000 to the Plan (approximately 100% of total premiums) through their required contribution of $525 per month for retiree-only coverage and $1,408 for family coverage. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the Plan for the year, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the Plan: Annual required contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB cost (expense) Benefit payments Change in net OPEB obligation Net OPEB obligation -beginning of year Net OPEB obligation -end of year $ 430,085 150,156 (166,838] 413,403 (265,000] 148,403 5,005, 151 $ 5,153,554 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the year ended December 31 , 2017 was as follows : 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) Annual Fiscal Annual OPES Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31 , 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31 , 2014 534,877 185,000 4,336,620 December 31 , 2015 556,385 209,000 4,684,005 December 31 , 2016 578, 146 257,000 5,005,151 December 31 , 2017 413,403 265,000 5, 153,554 Funding Status and Funding Progress. As of the year ended December 31, 2017, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $4,471 ,205 and the actuarial value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $4,471 ,205. The covered payroll (annual payroll of active employees covered by the plan) was $23,770,671 , and the ratio of the UAAL to the covered payroll was 18.81 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the year ended December 31 , 2017, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 3.00% investment rate of return, which is the rate of the employer's own investments as there are no plan assets and an initial annual medical and dental healthcare cost trend of 6.80%, reduced by decrements to an ultimate rate 4.10% after eighty years. The UAAL is being amortized as a level dollar over an open thirty-year period. J. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $[27,854) at December 31 , 2017. 64 K. TAX ABATEMENTS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 In 2017, the City of Salina participated in real property tax abatements for six local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start-ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Ad Valorem Property Tax Abatements 2017 Tax Company Start End % Abated Salina Vortex Corp (facility impro\ements) 2015 2024 75% $ 20,981 Bergkamp (facility addition/impro1.ements) 2010 2019 50% 6,486 Great Plains Mfg (facility imprm.ements) 2014 2023 100% - Veris Technologies (facility addition/impro\ements) 2015 2024 40.5% 1,925 Twin Oaks (facility addition/impro\ements) 2015 2024 55% 2,602 Salina Field House (facility) 2017 2026 100% 27,401 Total $ 59,395 Tax Increment Financing (TIF). TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements . Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified , and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) TIF Project Plans District Purpose Base Year Expires Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and prhate Lambertz infrastructure 2007 2027 Total 2017 Reimbursements Sales Tax Property Tax $ 212,624 $ 258,932 $ 212,624 $ 258,932 Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID . If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Community Improvement District (CID) 2017 Eligible Reimbursement Name Rate Start Expires Purpose Amount* Assist with impro-.ements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center $ 154,154 Total $ 154,154 * Reimbursement was not actually paid to de1eloper until Jan. 2018 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid , there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) Neighborhood Revitalization Act (NRA) Property/Business Name Address Weis Fire & Safety lmprmement #2 Erick Mendenhal1 1325 N. 3rd Annie/Arlene Lewis 1005 N. 10th Street Michelle Malone 809 N. 2nd Street Boyd E. Smith Trust 148 S. Santa Fe Boyd E. Smith Trust 148 S. Santa Fe Welsh lmestments LLC 300 S. 9th Street Leon Marrs Trust 740 N. 2nd Street Johnny M. & Sung Hee Kim 233A S. Fourth Street Pioneer Presidents Place LP 210 W .Mulberry Street Christpher Helm 613 N 5th Street Paul Foster 523 N. 11th James M. Monroe 620 W. Hamilton Street Chanel Thomas 241 N. Front Street Christina litwiller 148 N. 12th Street Jeremy Cessna 219 N. Front Street Troy & Dawn Cramer 1101 N.10th William & Mary Warhurst 714 Park Street Holly Fain 204 Forest A1enue Arlene Cox 200 Forest A1enue Gloria Williams 903 N. 10th Street Michelle Rogan 240 S. Clark Street Samuel A. Rock 1329 N. 4th Street Jessica A. Ziegler 221 N. 2nd Street Delin or Jessica Know 207 N. Penn Rawy lnwstments LLC 157 N. Se1enth, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Lamont Outland 1206 N. 7th Street Michelle Bunch 634 N. 8th Street Jermaine and Tykea Polk 226 N. 2nd Street Mary Marshall 937 N. 3rd Street Angela Fishburn 1219 N. 8th Street Kress Building LLC 134 S. Santa Fe A1e Heritage at Haw1horne Partners, LLC 715 N. 9th Street Will & Mary Warhurst 809W. Ash Donnie & Ramona Marrs 2035 E. Iron #300R T JTh.1, Inc. 2035 E. Iron #213C Troy Valcil 853 Na\0ho Michelle Malone 815 N. 2nd Street Timothy & Linda Rickman 719 E. Ash Ywtte Gelinas 1115 N. 8th Street Charles H Carroll Jr Trust 156-158 S. Santa Fe Pestinger Enterprises LLC 2035 East Iron, Unit 306R Latisha Pierce 705 N. 2nd Street Tanya Shiehzadeh 703 N. 2nd Street Robert & Brenda Burns 1205 N. 4th Street Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Phill Hemmer 2035 E. Iron Awnue, Unit #203R Curtis and Rebecca Schlosser 2035 E. Iron Awnue, Unit #206R Daryl Bixby Construction Co. 156-158 N. 11th Street Traniesh Byrd 701 N. 2nd Street TJTh.1 Inc 2035 E. Iron #105R TJTh.1 Inc 2035 E. Iron #302R TJTh.1 Inc 2035 E. Iron #202R TJTho11nc 2035 E. Iron #205R Mark Martin liling Trust 2035 E. Iron #104R Total 67 2017 Type Rebate Pal~ Com $ 353 Res 49 Res 6 Res 21 Res 104 Com 121 Com 1,130 Res 37 Res 153 Com 2,472 Com 427 Res 31 Res 136 Res 115 Res 77 Res 82 Res 14 Res 52 Res 94 Res 95 Res 89 Res 109 Res 21 Res 90 Res 277 Ash Com 1,116 Res 200 Res 212 Res 107 Res 184 Res 184 Com 509 Com 1,523 Res 228 Res 815 Res 92 Res 111 Res 23 Res 134 Res 201 Com 2,576 Res 449 Res 244 Res 220 Res 174 Com 2,466 Res 1,843 Res 960 Com 516 Res 199 Com 702 Com 636 Com 756 Com 310 Com 717 $ 24,560 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION December 31 , 2017 Schedule of Employer Contributions: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31 , 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31, 2014 534,877 185,000 4,336,620 December 31 , 2015 556,385 209,000 4,684,005 December 31 , 2016 578, 146 257,000 5,005, 151 December 31, 2017 413,403 265,000 5,153,554 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued ML Ratio Payroll Date Assets (a} Liabilit~ (b) (b} -(a} (a/b} !fl 12/31/2013 $ -$ 5,579,912 $ 5,579,912 0.0% $ 22,283,185 12/31/2014 5,538,770 5,538,770 0.0% 22,156,127 12/31/2015 5,538,770 5,538,770 0.0% 22,958,300 12/31/2016 5,538,770 5,538,770 0.0% 23,245,887 12/31/2017 4,471,205 4,471,205 0.0% 23,770,67 1 68 UMLas Percent of Payroll (b-a}/(c} 25.04% 25.00% 24.13% 23.83% 18.81% CITY OF SALINA, KANSAS KPERS PENSION PLAN REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) December 31 , 2017 Schedule of the City's Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Local 1m.1ill City's proportion of the net pension liability 0.764% City's proportionate share of the net pension liability $10,027,679 City's covered-employee payroll $12,931 ,197 City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% Plan fiduciary net position as a percentage of the total pension liability 71.98% • -The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Police and Firemen Local 1m.1ill .1.ZQ1l12 2.258% 0.761% $ 16,395,794 $ 11 ,770,699 $ 10, 161,866 $13,371 ,550 161.35% 88.03% 74.60% 68.55% Schedule of the City's Contributions Last Ten Fiscal Years* Police and Firemen .1.2fill12 2.180% $ 20,251 ,512 $10,799,898 187.52% 69.30% Police and Police and Local Firemen Local Firemen .1.2illlli 12illill .1m..1L1§ 12l.3..1L12 Contractually required contribution $ 1,256,217 $ 2,527,995 $ 1,243,711 $ 2,361,273 $ Contributions in relation to the contractually required contribution 1,256,217 2,527,995 1243711 2,361,273 Contribution deficiency (excess] $ $ $ $ $ Local 1m1L1l 0.811% s 11,753,246 $ 13,606,499 86.38% 72.15% Local 12Llli1l 1,179,745 1 179 745 City's covered-employee payroll $ 13,251,236 $10,730,033 $ 13,548,056 $10,593,419 $ 13,944,989 Contributions as a percentage of covered employee payroll • -Data became available with the inception of GASS 68 during fiscal year 2015, therefore 10 years of data is unavailable. 9.48% 69 23.56% 9.18% 22.29% 8.46% Police and Firemen 1Z&1L1.Z 2.191% $ 20,546,882 $ 10,606,934 193.71% 70.99% Police and Firemen 1l&1L.1l $ 1,986,933 1,986,933 $ $ 10,441,055 19.03% COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. Business improvement district fund -State· law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 12.5% of the 1/4 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund -To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund -To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund -To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund -To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund -To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund -To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds -To account for revenue and expenses associated with federal Equitable Sharing Program funds. 70 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Homeowners' assistance fund -To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund -To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund -To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year 2076. 71 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31 , 2017 Total Total Nonmajor Non major Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 3,001 ,083 $ 501 ,693 $ 1,037,888 Receivables Accounts 2,864 Total assets $ 3,003,947 $ 501 ,693 $ 1,037,888 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 162,754 $ -$ - Due to other funds 27,854 Total liabilities 190,608 Fund balances: Restricted 357,163 1,037,888 Committed 2,484,030 501 ,693 Assigned Unassigned [27,854] Total fund balances 2,813,339 501,693 1,037,888 Total liabilities and fund balances $ 3,003,947 $ 501 ,693 $ 1,037,888 See independent auditor's report on the financial statements. 72 Total Nonmajor Governmental Funds $ 4,540,664 2,864 $ 4,543,528 $ 162,754 27,854 190,608 1,395,051 2,985,723 [27,854] 4,352,920 $ 4,543,528 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 580,766 $ -$ - Intergovernmental 851,416 621,860 Charges for services 469,766 10,619 Licenses and permits 5,300 Investment revenue 22,421 1,828 3,929 Donations 110,606 Miscellaneous 77,763 Total revenues 2,118,038 12,447 625,789 EXPENDITURES Current Culture and recreation 1,718,877 Public safety 223,912 Public health and sanitation 347,442 Planning and development 86,832 Miscellaneous 35 Debt service Principal retirement 180,000 Interest and other charges 90,935 Capital outlay 751,068 Total expenditures 3,128,131 35 270,935 Excess [deficiency] of revenues over (under] expenditures [1,010,093) 12,412 354,854 Other financing sources [uses] Transfers in 1,310,983 Transfers [out] Total other financing sources [uses] 1,310,983 Net change in fund balance 300,890 12,412 354,854 Fund balance -Beginning of year 2,512,449 489,281 683,034 Fund balance -End of year $ 2,813,339 $ 501,693 $ 1,037,888 See independent auditor's report on the financial statements. 73 Total Non major Governmental Funds $ 580,766 1,473,276 480,385 5,300 28,178 110,606 77,763 2,756,274 1,718,877 223,912 347,442 86,832 35 180,000 90,935 751,068 3,399,101 [642,827) 1,310,983 1,310,983 668,156 3,684,764 $ 4,352,920 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit] Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS 43100 Business Bicentennial Improvement Neighborhood Center District Park $ 143,841 $ 13,304 $ 21 ,599 2,864 $ 143,841 $ 16, 168 $ 21,599 $ 85,861 $ -$ - 85,861 16, 168 57,980 21 ,599 57,980 16, 168 21,599 $ 143,841 $ 16, 168 $ 21 ,599 Special Parks & Special Recreation Alcohol $ 124,221 $ 164 $ 124,221 $ 164 $ -$ 124,221 164 124,221 164 $ 124,221 $ 164 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Develo12ment District #1 9th CID Grants Communications $ 185,112 $ 1,052,103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ 185,112 $ 1,052, 103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ -$ 50 ,000 $ -$ -$ -$ 9,670 50,000 9,670 185,112 1,002, 103 101 ,631 290,851 6,436 365,228 185,112 1,002,103 101 ,631 '290,851 6,436 365,228 $ 185,112 $ 1,052,103 $ 101 ,631 $ 290,851 $ 6,436 _$ __ 3_7_4,,_,8_9_8 See independent auditor's report on the financial statements. 74 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) 43100 Kenwood Special Cove Law Police Capital Enforcement Grants $ 101,852 $ 81 $ $ 101,852 $ 81 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 7,689 $ -$ - Due to other funds 27,854 Total liabilities 7,689 27,854 Fund balance: Restricted Committed 94 ,163 81 Assigned Unassigned [27,854) Total fund balance [deficit] 94,163 81 [27,854) Total liabilities and fund balances $ 101,852 $ 81 $ - Federal DARE Grants Donations $ 3,304 $ 18,824 $ 3,304 $ 18,824 $ -$ 235 235 3,304 18,589 3,304 18,589 $ 3,304 $ 18,824 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,001 ,083 2,864 $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,003,947 $ 225 $ 4,680 $ -$ -$ -$ -$ 4,394 $ 162,754 225 4,680 25,973 5,525 32,066 105,313 98 11,440 32,066 105,313 25,973 98 11,440 5,525 98 $ 32,291 $ 109,993 $ 25,973 ... $ ____ _ $ 11,440 $ 5,525 See independent auditor's report on the financial statements. 75 27,854 4,394 190,608 357,163 373,148 2,484,030 [27,854) 373,148 2,813,339 $ 377,542 $ 3,003,947 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2017 Business Bicentennial Improvement Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 79, 117 Licenses and permits 5,300 Investment revenue 12,513 47 94 Donations Miscellaneous Total Revenues 12,513 79,164 5,394 Expenditures Current Culture and recreation 738,507 Public safety Public health and sanitation Planning and development 72,197 Capital outlay 32,139 Total Expenditures 738,507 72,197 32,139 Excess [deficiency] of revenues over [under] expenditures (725,994] 6,967 (26,745) Other financing sources (uses) Transfers in 742,633 Transfers [out] Total other financing sources [uses] 742.633 Net change in fund balance 16,639 6,967 (26,745) Fund balance, beginning of year 41 ,341 9,201 48,344 Fund balance, end of year $ 57,980 $ 16,168 $ 21 ,599 Special Parks & Special Recreation Alcohol $ -$ 202,255 202,255 642 30 202,897 202,285 202,255 211,320 211 ,320 202,255 [8,423) 30 (8,423) 30 132,644 134 $ 124,221 $ 164 Community Development Revolving $ - 681 681 681 681 184,431 Sales Tax Economic Development $ 335,247 4,060 339,307 441,606 441 ,606 [102,299] [102,299] 1, 104,402 Downtown TIF District #1 $ 88,219 336 88,555 88,555 88,555 13,076 $ South 9th CID 157,300 713 10,371 168,384 168,384 168,384 122,467 $ State Grants - 10,974 22 10,996 10,996 10,996 [4 ,560] 911 Communications $ 331 ,339 1,122 332,461 223,912 223,912 108,549 108,549 256,679 $ 185,112 $ 1,002,103 $ 101 ,631 $ 290,851 $ 6,436 $ 365,228 --------- See independent auditor's report on the financial statements. 76 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2017 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 21,033 Charges for services Licenses and permits Investment revenue 180 Donations Miscellaneous Total Revenues 180 21,033 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 46,276 2,800 16,927 Total Expenditures 46,276 2,800 16,927 Excess (deficiency] of revenues over [under] expenditures (46,096] (2,799] 4,106 Other financing sources [uses] Transfers in 68,350 Transfers (out] Total other financing sources [uses] 68.350 Net change in fund balance 22,254 [2,799] 4,106 Fund balance, beginning of year 71 ,909 2,880 (31 ,960] Fund balance, end of year $ 94, 163 $ 81 $ [27,854) Federal DARE Grants Donations $ -$ 50 54 18,707 50 18,761 14,635 14,635 50 4,126 50 4,126 3,254 14,463 $ 3,304 $ 18,589 War Memorial Maintenance $ - 118 118 345 345 [227] [227] 32,293 $ 32,066 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ -$ -$ -$ -$ - 8,560 390,649 93 96 38 3 40,464 2,699 5,522 431,206 8,656 2,737 5,525 980,025 980,025 [548,819] 8,656 2,737 5,525 500,000 500.000 [48,819] 8,656 2,737 5,525 154,132 17,317 98 8,703 $ 105,313 $ 25,973 $ 98 $ 11,440 $ 5,525 See independent auditor's report on the financial statements. 77 Animal Shelter Donations Totals $ -$ 580,766 75,000 851,416 469,766 5,300 1,528 22,421 110,606 110,606 77,763 187,134 2,118,038 1,718,877 223,912 145,187 347,442 86,832 751,068 145,187 3,128,131 41,947 [1,010,093] 1,310,983 1.310.983 41 ,947 300,890 331,201 2,512,449 $373,148 $2,813,339 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December 31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total $ 493,866 $ 2,029 ""'-$ __ 5....:.,.,7_9_8 $ 501,693 $ 493,866 $ 2,029 _$ __ 5 ..... 7_9_8 $ 501,693 493,866 2,029 5,798 501,693 $ 493,866 $ 2,029 _$ __ 5 .... ,7_9_8 $ 501,693 See independent auditor's report on the financial statements. 78 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 10,619 $ -$ Investment revenue 1,798 8 Total revenues 12,417 8 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,382 8 Fund balances -beginning of year 481,484 2,021 Fund balances -end of year $ 493,866 $ 2,029 $ See independent auditor's report on the financial statements. 79 - 22 22 22 5,776 5,798 Total $ 10,619 1,828 12,447 35 35 12,412 489,281 $ 501 ,693 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES JN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Investment revenue $ 12,513 $ -$ Total revenues 12,513 Expenditures Culture and recreation 738,507 750,000 Total expenditures 738,507 750,000 Excess [deficiency] of revenues over [under] expenditures [725,994] [750,000] Other financing sources [uses] Transfers in 742,633 720,000 Total other financing sources [uses] 742,633 720,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,639 [30,000] Unreserved fund balance, January 1 41,341 214,254 Unreserved fund balance/GAAP fund balance December 31 $ 57 ,980 $ 184,254 $ See independent auditor's report on the financial statements. 80 Final - 750,000 750,000 [750,000] 720,000 720,000 [30,000] 214,254 184,254 Variance with Final Budget Positive [Negative] $ 12,513 12,513 11,493 11,493 24,006 22,633 22,633 46,639 [172,913] $ [126,274) Revenues CITY OF SALINA. KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Investment revenue $ 77,493 $ 47 89,175 $ 15 89,175 $ 15 [11 ,682] 32 Total revenues Expenditures Planning and development Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 Reconciliation to GAAP Accounts receivable GAAP Fund Balance, December 31 77,540 89,190 72,197 89, 175 72, 197 89, 175 5,343 15 7,961 4,754 13,304 $ 4,769 $ 2,864 $ 16,168 See independent auditor's report on the financial statements. 81 89,190 [11 ,650] 89,175 16,978 89, 175 16,978 15 5,328 4,754 3,207 4, 769 $..___...;8.:..;;,5;.;;;.3~5 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) NEIGHBORHOOD PARK FUND Revenues Licenses and permits Investment revenue Total revenues Expenditures Capital outlay Tota r expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Prior year cancelled encumbrances For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 5,300 $ 10,000 $ 10,000 94 500 500 5,394 10,500 10,500 32,139 95,073 95,073 32, 139 95,073 95,073 (26,745] (84,573] [84 ,573] 48,344 84,573 84,573 Variance with Final Budget Positive [Negative] $ (4,700] (406] (5,106] 62,934 62,934 57,828 (36,229] Unreserved fund balance, December 31 21 ,599 _$ ____ -__ $ ____ -_$ __ 2_1 __ ,5_9_9 Reconciliation to GMP Current year encumbrances GMP Fund Balance, December 31 $ 21 ,599 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Revenues Intergovernmental Investment revenue $ 202,255 $ 642 190,082 $ 4,000 190,082 $ 4,000 12,173 [3,358] Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 Prior year cancelled encumbrances Unreserved fund balance, December 31 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 202,897 194,082 194,000 194,000 194,000 194,000 8,897 82 8,897 82 104,904 51,169 10,420 124,221 $ 51,251 $ 124,221 See independent auditor's report on the financial statements. 83 194,082 8,815 194,000 194,000 82 8,815 82 8,815 51,169 53,735 10,420 51,251 ,;;,.$_.....;.:72::.:.,9;;..;7..;.0 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 202,255 $ 216,086 $ Investment revenue 30 Total revenues 202,285 216,086 Expenditures Public health and sanitation 202,255 216,086 Total expenditures 202,255 216,086 Excess [deficiency] of revenues over [under] expenditures 30 Unreserved fund balance, January 1 134 Unreserved fund balance/GAAP fund balance December 31 $ 164 $ -$ See independent auditor's report on the financial statements. 84 Final 216,086 216,086 216,086 216,086 - Variance with Final Budget Positive [Negative] $ [13,831] 30 [13,801] 13,831 13,831 30 134 $ 164 Revenues Taxes Investment revenue Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 335,247 $ 649,849 $ 649,849 4,060 5,000 5,000 339,307 654,849 654,849 441 ,606 1,474,000 1,474,000 441 ,606 1,474,000 1,474,000 Excess [deficiency] of revenues over [under] expenditures [102,299] [819,151] Unreserved fund balance, January 1 1, 104,402 869,281 Unreserved fund balance/GAAP fund balance December 31 $ 1,002,103 $ 50,130 $ See independent auditor's report on the financial statements. 85 [819,151] 869,281 50,130 Variance with Final Budget Positive [Negative] $ [314,602] [940] [315,542] 1,032,394 1,032,394 716,852 235,121 $ 951 ,973 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 390,649 $ 480,350 $ Investment revenue 93 2,000 Miscellaneous 40,464 500 Total revenues 431 ,206 482,850 Expenditures Culture and recreation 980,025 1,016,988 Total expenditures 980,025 1,016,988 Excess [deficiency] of revenues over [under] expenditures [548,819] [534,138] Other financing sources [uses] Transfers in 500,000 500,000 Transfers [out] Total other financing sources [uses] 500,000 500,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [48,819] [34,138] Unreserved fund balance, January 1 154,132 138,327 Unreserved fund balance/GAAP fund balance December 31 $ 105,313 $ 104, 189 $ See independent auditor's report on the financial statements. 86 Final 480,350 2,000 500 482,850 1,016,988 1,016,988 [534,138] 500,000 500,000 [34, 138] 138,327 104, 189 Variance with Final Budget Positive [Negative] $ [89,701] [1 ,907] 39,964 [51,644] 36,963 36,963 [14,681] [14,681] 15,805 $ 1, 124 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,433,770 $ 2,691,197 Delinquent taxes 52,896 55,000 Motor vehicle taxes 374,874 365,992 Special assessments 1,538,904 1,635,000 Investment revenue 17,102 2,500 Miscellaneous 75,000 Total revenues 4,417,546 4,824,689 Expenditures Debt Service Principal retirement 4,907,918 5,157,920 Interest and other charges 1,490,423 2,086,687 Total expenditures 6,398,341 7,244,607 Excess [deficiency] of revenues over [under] expenditures [1 ,980,795) [2,419,918) Other financing sources [uses] Issuance of bonds 1,000 Premium on bonds 16,751 Transfers in 2,241 ,309 2,000,000 Total other financing sources [uses] 2,259,060 2,000,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 278,265 [419,918] Unreserved fund balance, January 1 1,184,289 419,918 Unreserved fund balance December 31 1,462,554 $ - Reconciliation to GAAP Taxes receivable 2,521,302 Deferred revenue [2,473,993] GAAP Fund Balance, December 31 $ 1,509,863 See independent auditor's report on the financial statements. 87 Final $ 2,691 ,197 55,000 365,992 1,635,000 2,500 75,000 4,824,689 5,157,920 2,086,687 7,244,607 [2,419,918) 2,000,000 2,000,000 (419,918] 419,918 $ - Variance with Final Budget Positive [Negative] $ [257,427] [2,104] 8,882 [96,096] 14,602 [75,000] [407,143] 250,002 596,264 846,266 439,123 1,000 16,751 241 ,309 259,060 698,183 764,371 $ 1,462,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 3, 160, 158 $ 2,047,479 Investment revenue 14,079 4,000 Miscellaneous 20,552 49,310 Total revenues 3,194,789 2,100,789 Expenditures Public works 1,449,639 1,678,330 Total expenditures 1,449,639 1,678,330 Excess [deficiency) of revenues over [under) expenditures 1,745,150 422,459 Other financing sources [uses] Transfers [out] [905,000] [707,000] Total other financing sources [uses] [905,000] [707,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 840,150 [284,541] Unreserved fund balances, January 1 3,040,780 2,090,260 Unreserved fund balances, December 31 $ 3,880,930 $ 1,805,719 See independent auditor's report on the financial statements. 88 Final $ 2,047,479 4,000 49,310 2,100,789 1,678,330 1,678,330 422,459 [707,000] [707,000] [284,541] 2,090,260 $ 1,805,719 Variance with Final Budget Positive [Negative] $ 1,112,679 10,079 [28,758] 1,094,000 228,691 228,691 1,322,691 [198,000] [198,000] 1, 124,691 950,520 $ 2,075,211 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31 , 2017 Budgeted Amounts Revenues Charges for services Investment revenue Miscellaneous Total revenues Expenditures Public works Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Transfers [out] Total other financing sources (uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balances, January 1 Prior year cancelled encumbrances Actual $ 19,663,406 61,765 5,522 19,730,693 12,243,703 12,243,703 7,486,990 [5,649,625] [5,649,625] 1,837,365 9,229,332 234,904 Original Final $ 19,625,000 $ 19,625,000 25,000 25,000 10,000 10,000 19,660,000 19,660,000 12,831,419 12,831,419 12,831,419 12,831 ,419 6,828,581 6,828,581 122,200 122,200 [8,770,000] [8,770,000] [8,647,800] [8,647,800] [1 ,819,219] [1 ,819,219] 7,746,266 7,746,266 Variance with Final Budget Positive [Negative] $ 38,406 36,765 [4,478] 70,693 587,716 587,716 658,409 [122,200] 3,120,375 2,998,175 3,656,584 1,483,066 234,904 Unreserved fund balances, December 31 $ 11 ,301 ,601 $ 5,927,047 $ 5,927,047 $ 5,374,554 See independent auditor's report on the financial statements. 89 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS .-BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,826,962 $ 2,913,179 $ 2,913,179 Investment revenue 5,793 Total revenues 2,832,755 2,913,179 2,913, 179 Expenditures Public works 1,953,277 1,934,016 1,934,016 Total expenditures 1,953,277 1,934,016 1,934,016 Excess [deficiency] of revenues over [under] expenditures 879,478 979, 163 979,163 Other financing sources [uses] Transfers [out] [376,500) [996,500) [996,500] Total other financing sources [uses] [376,500) [996,500) [996,500] Excess (deficiency] of revenues and other sources over [under) expenditures and other [uses] 502,978 [17,337] (17,337] Unreserved fund balance, January 1 1,041,379 1,041,560 1,041,560 Unreserved fund balances, December 31 $ 1,544,357 $ 1,024,223 $ 1,024,223 See independent auditor's report on the financial statements. 90 Variance with Final Budget Positive [Negative] $ (86,217] 5,793 [80,424] [19,261] [19,261] [99,685] 620,000 620,000 520,315 [181) $ 520, 134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 798,369 $ 823,950 $ Investment revenue 344 Miscellaneous 75,470 50,000 Total revenues 874,183 873,950 Expenditures Recreation 858,129 818,064 Total expenditures 858,129 818,064 Excess [deficiency] of revenues over [under] expenditures 16,054 55,886 Other financing sources [uses] Transfers [out] [83,289] Total other financing sources [uses] [83,289] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,054 [27,403) Unreserved fund balance, January 1 99,978 239,979 Unreserved fund balances, December 31 $ 116,032 $ 212,576 $ See independent auditor's report on the financial statements. 91 Final 823,950 50,000 873,950 818,064 818,064 55,886 [83,289] [83,289) [27,403) 239,979 212,576 Variance with Final Budget Positive [Negative] $ [25,581] 344 25,470 233 [40,065) [40,065) [39,832) 83,289 83,289 43,457 [140,001) $ [96,544J CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 298,628 $ 311 ,337 $ Investment revenue 3,080 2,500 Miscellaneous 2,197 Total revenues 303,905 313,837 Expenditures General government 389,412 709,667 Total expenditures 389,412 709,667 Excess [deficiency] of revenues over [under] expenditures [85,507] [395,830] Unreserved fund balance, January 1 1,004,882 844,976 Unreserved fund balances, December 31 $ 919,375 $ 449,1 46 $ See independent auditor's report on the financial statements. 92 Final 311 ,337 2,500 313,837 709,667 709,667 [395,830] 844,976 449,146 Variance with Final Budget Positive [Negative] $ [12,709] 580 2,197 [9,932] 320,255 320,255 310,323 159,906 $ 470,229 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEAL TH INSURANCE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 6,809,860 $ 7,044,200 $ 7,044,200 Investment revenue 10,586 5,000 5,000 Miscellaneous 32,507 5,000 5,000 Total revenues 6,852,953 7,054,200 7,054,200 Expenditures General government 6,402,325 6,995,644 6,995,644 Total expenditures 6,402,325 6,995,644 6,995,644 Excess [deficiency] of revenues over [under] expenditures 450,628 58,556 58,556 Unreserved fund balance, January 1 1,600,344 1,294,000 1,294,000 Unreserved fund balances, December 31 $ 2,050,972 $ 1,352,556 $ 1,352,556 See independent auditor's report on the financial statements. 93 Variance with Final Budget Positive [Negative] $ [234,340] 5,586 27,507 [201,247] 593,319 593,319 392,072 306,344 $ 698,416 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS} CENTRAL GARAGE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 1,215,447 $ -$ - Investment revenue 40 40 Miscellaneous 6,481 17,500 17,500 Total revenues 1,221,928 17,540 17,540 Expenditures General government 1,311,755 1,757,484 1,757,484 Total expenditures 1,311,755 1,757,484 1,757,484 Excess [deficiency] of revenues over [under] expenditures [89,827] [1 ,739,944] [1,739,944] Other financing sources [uses] Transfers in 130,000 1,730,000 Transfers [out] [10,000] Total other financing sources [uses] 130,000 1,720,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 40, 173 [19,944] Unreserved fund balance, January 1 [18,578] 165,078 Unreserved fund balance, December 31 $ 21,595 $ 145,134 $ See independent auditor's report on the financial statements. 94 1,730,000 [10,000] 1,720,000 [19,944] 165,078 145, 134 Variance with Final Budget Positive [Negative] $ 1,215,447 [40] [11,019] 1,204,388 445,729 445,729 1,650, 117 [1 ,600,000] 10,000 [1,590,000] 60,117 [183,656] $ [123,539) CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 95 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2017 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 919,455 $ 2,084,615 Inventory and prepaid supplies Total current assets 919,455 2,084,615 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 919,455 2,084,615 Deferred outflows of resources: Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 919,455 $ 2,084,615 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 80 $ 33,642 Current portion of compensated absences payable Current portion of accrued claims payable 177, 141 395,691 Total current liabilities (payable from current assets) 177,221 429,333 Noncurrent liabilities: Compensated absences payable Accrued claims payable 44,772 Net pension liability Total noncurrent liabilities 44,772 Total liabilities 221 ,993 429,333 Deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 221 ,993 $ 429,333 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 697,462 1,655,282 Total net position $ 697,462 $ 1,655,282 See independent auditor's report on the financial statements. 96 Total Internal Central Service Garage Funds $ 45,763 $ 3,049,833 165, 125 165,125 210,888 3,214,958 184,326 184,326 160,966 160,966 23,360 23,360 234,248 3,238,318 31,240 31,240 31,240 31,240 $ 265,488 $ 3,269,558 $ 24,168 $ 57,890 28,707 28,707 572,832 52,875 659,429 24,863 24,863 44,772 165,559 165,559 190,422 235,194 243,297 894,623 11,338 11,338 11,338 11,338 $254,635 $ 905,961 $ 23,360 $ 23,360 [12,507] 2,340,237 $ 10,853 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2017 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 298,628 $ 6,809,860 $ 1,215,447 Miscellaneous 2,197 32,507 6,482 Total operating revenues 300,825 6,842,367 1,221,929 Operating expenses General government 356,171 6,503,682 1,349,966 Depreciation 9,260 Total operating expenses 356, 171 6,503,682 1,359,226 Operating income [loss] [55,346] 338,685 [137,297] Nonoperating revenues (expenses] Investment revenue 3,080 10,586 Gain/[loss] on disposal of fixed assets [4,044] Total other operating revenues [expenses] 3,080 10,586 [4,044] Income [loss] before transfers [52,266] 349,271 [141,341] Transfers from [to] other funds Transfers in 130,000 Transfers [out] Total transfers 130,000 Change in net position [52,266] 349,271 [11,341] Net position, January 1 749,728 1,306,011 22,194 Net position, December 31 $ 697,462 $ 1,655,282 $ 10,853 See independent auditor's report on the financial statements. 97 Total Internal Service Funds $ 8,323,935 41, 186 8,365, 121 8,209,819 9,260 8,219,079 146,042 13,666 [4,044] 9,622 155,664 130,000 130,000 285,664 2,077,933 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31 , 2017 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 265,387 $ 6,911 ,218 Cash paid to suppliers of goods or services (356,091] (6,4 70,040] Cash paid to employees Other operating receipts 2,197 32,507 Net cash provided by [used in] operating activities (88,507] 473,685 Cash flows from investing activities Interest received 3,080 10,586 Cash flows from capital and related financing activities Proceeds from sale of capital assets Net cash provided by [used in] capital Cash flows from noncapital financing activities Transfers in Transfers [out] Net cash provided by [used in) noncapital financing activities Net increase [decrease] in cash and cash equivalents (85,427] 484,271 Cash and cash equivalents, January 1 1,004,882 1,600,344 Cash and cash equivalents, December 31 $ 919,455 $ 2,084,615 See independent auditor's report on the financial statements. 98 Total Internal Central Service Garage Funds $ 1,215,448 $ 8,392,053 [1 ,049,688] (7,875,819] (275,772) [275,772) 6,481 41,185 (103,531) 281,647 13,666 130,000 130,000 130,000 130,000 26,469 425,313 19,294 2,624,520 $ 45,763 $ 3,049,833 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2017 Reconciliation of operating (loss] income to net cash provided by (used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss] $ [55,346) $ 338,685 $ [137,297) $ 146,042 Adjustments to reconcile operating income (loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows Net cash provided by [used in] operating activities $ 80 33,642 (33,241) 101,358 [88,507) $473,685 See independent auditor's report on the financial statements. 99 9,260 9,260 24,761 24,761 [1, 162) (1,162) [13,704) 20,018 14,065 14,065 [234) [234) 68, 117 780 780 $ [103,531) $281,647 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use in investigations. Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. DTF federal forfeiture fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund -To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund -To account for funds being held in escrow for bonds issued by Municipal Court. 100 Special Fire Assessment Insurance ~ ~ ASSETS: Cash and investments $ 90,849 $ 18,869 Total assets $ 90,849 $ 18,869 LIABILITIES: Accounts payable $ 90,849 $18,869 Total liabilities $ 90,849 $ 18,869 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December31,2017 Court Police Section DTF Payroll Bond and Investigation 125 Federal ~ BmMi2!l ~ ~ Eli!!! ~ $ [365,473) $ 23,818 $ 3,379 $ 94,580 $291,014 $ 3,696 $ [365,473) $ 23,818 L...1.lli, $ 94,580 $291,014 $ 3,696 $ [365,473) $ 23,818 L...1.lli, $ 94,580 $291,014 $ 3,696 $ [365,473) $ 23,818 L...1.lli, ~ $291,014 $ 3,696 See independent auditor's report on the financial statements. 101 Beechcraft Bail DTF DTF Remedition Bond l.=t ~ ~ ~ ~ $47,216 $26,299 $ 154,181 $1,127 $389,555 $47,216 $26,299 $ 154,181 $1,127 $389,555 $47,216 $26,299 !..IB.lli $1,127 $389,555 $47,216 $26,299 $ 154,181 $1,127 $389,555 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2017 Balance December 31 , 2016 Additions Deductions Cash and investments Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing [320,981] Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11 ,963 DTF Local 101 ,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1, 124 3 Total Assets $ 268,293 $ 686,875 $ Accounts Payable Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing [320,981] Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11,963 DTF Local 101 ,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total liabilities $ 268,293 $ 686,875 $ See independent auditor's report on the financial statements. 102 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 - 35,239 44,492 10,707 56,795 348,396 8,274 54 ,710 7,000 565,613 Balance December 31 , 2017 $ 90,849 18,869 [365,473] 23,818 3,379 94,580 291 ,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 $ 90,849 18,869 [365,473) 23,818 3,379 94,580 291 ,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net Position by Ca'J'1901'18nt Last Ten Flscal Years (accrual basis of accounting) (lnOOO's) FlscatYear Zl22§ ~ = £Qll = Zlll.J 2QU = 2ll1!i = Amount " Amount " Amount " Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Nel lnvestmenl In capl\al assets $118,965 93% $101,974 85% $113,001 96% $109,289 93% $112,929 94% $116,585 90% s 115,589 90% s 130,401 122% s 124,635 108% $129,921 105% Restricted 1.212 1% 1,174 1% 988 1% 1,712 1% 1,082 1% 1,210 1% 876 1% 1.224 1% 1,738 1% 2,012 2% Unrestricted ~ 6% 16706 14% ~ 3% ~ 5% ~ 5% ~ 9% ----11ill 9% ~ -23% ~ ·9".4 __ruw -7% Total governmental activities net position $127,922 100% $119.85"4 100"• $117 797 100% $117334 100% $119,522 100% $129423 100% s 127 878 100% s 106,703 100% $115868 100% s 123,701 11)()% Business-type actlvltles Net Investment in capita! assets s 45,931 79% $ 48.234 79'• $ 48,078 75% $ 44,227 63% s 50,857 69% s 57,103 75% $ 61,721 75% $ 68,107 80% s 62,427 71% s 63,316 71% Restricted 1,211 2% 1,553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 ,.. 1,512 2% 1,512 2% Urvestricled ---1.!Jfil. 19% ---11fil 19% 14 306 22% 24 528 35% 21,450 29% 17794 23% ~ 24% ~ 18% ___nm 27% ~ 27% Total business-type adivities net position $ 58,339 100% s 61,269 100% s 63,937 100% ~ 100% s 73,660 100% s 76450 100% s 82 778 100% $ 85,229 100'• ~ 100% s 89,083 100% Primary government Nel lnvestmenl In capita! assets $164,896 89% $150,208 83% $161,080 89% $153,516 82% $163,786 85% $173,688 84% s 177,311 84% s 198,508 103% s 187,062 92% s 193,237 91% Restricted 2,423 1% 2.727 2% 2,5"41 1% 3,216 ,... 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 ,.. UnJestricted 18942 10% 28188 18% ~ 10% 30,867 16% 26.961 14% 29,422 14% 30959 15% ~ -5% ~ 6% ~ 8% Total primary government nel position $186,261 100% $181.123 100"/o $181,736 t00% $187.599 100% s 193.382 100"• $205673 100% s 210658 100% s 191 932 100% $203428 100% s 212784 100% Source: City of Salina ~ehensNe AnmJal Financial Repor1s, 2006 • 2017 103 Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year ~ ~ Z21Q ~ 221Z ZQLl £2.li W2 ZQ1§ ZQ1Z Expenses Governmental activities: General government 6,791 14,664 10,845 13,614 $ 11,278 $ 10,978 $ 12,550 10,743 9,188 9,780 Public safety 18,440 16,539 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 Public works 9,706 9,781 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 Public health and sanitation 1,310 1,390 1,365 1,368 1,383 1,369 347 995 1,095 1,126 Culture and recreation 5,582 5,397 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 Planning and development 3,481 3,375 3,716 3,450 3,362 3,399 3.236 1,915 2,047 1,835 Interest on long tenm debt ~ ~ --1.&?Q ~ ~ -----1lli ---1.lli. ____bill ~ Total governmental activities expenses 46764 ~ 55,128 55,212 53,298 53,221 54 715 52,077 53,918 ___M.lli Business-type activities: Solid waste disposal 2,008 2,287 3,010 2,945 2,067 3,532 1,870 1,766 2,335 2,365 Water and sewer 13,284 12,995 14,050 13,597 14,897 15,418 14,904 11,712 14,807 15,650 Sanitation 2,184 2,224 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 Gotf course ~ ____§2Z. _..!!!.?. ~ ~ _1§§. ~ __fil __2lg ~ Total business-type activities expenses 18,360 18,403 20,138 19,628 20,128 21,955 20,016 16,208 19 977 21,045 Total primary government expenses $ 65,124 $ 69,549 $ 75,266 $ 74,840 $ 73,426 $ 75,176 $ 74 731 $ 68,285 $ 73,895 $ 75,856 Program Revenues Governmental activities: Charges for services General government $ 4,581 $ 4,599 5,143 $ 6,106 6,328 5,548 5,662 3,151 3,134 3,470 Public safety 3,588 2,913 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 Public works 120 164 198 262 306 277 255 193 238 348 Public health and sanitation 39 42 37 43 46 34 46 46 44 50 Culture and recreation 2,139 1,936 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 Planning and development 240 267 144 153 158 161 167 73 140 91 Operating grants and contributions 3,752 3,163 3,415 2,907 4,495 4,200 4,015 3,394· 4,332 4,541 Capital grants and contributions ---2ll Total governmental activities program revenues 14,458 13084 15,723 16,377 ~ 16,342 15,900 12,958 15,150 14642 Business-type activities: Charges for services Solid waste disposal 2,749 2,903 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 Water and sewer 14,073 14,980 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 Sanitation 2,172 2,292 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 Golf course 751 757 736 636 783 719 811 820 789 798 Operating grants and contributions 202 Capital grants and contributions ~ ----'R.i __ 1_1_5 Total business-type activities program revenues 19744 20,932 22,419 27 784 25,755 24,309 25,245 24,927 25,657 26,703 Total primary government program revenues $ 34,202 $ 34,016 $ 38,142 $ 44161 $ 43,106 $ 40,651 $ 41145 $ 37,885 $ 40,807 $ 41,345 Net (Expense) Revenue Governmental activities $ (32,306) $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,815) $ (39,119) $ (38,768) $ (40,169) Business-type activities ~ ~ ____ll!!1 ~ _§,fil ~ 5,229 ~ ~ ~ Total primary government net expense $ (30,922) $ (35,533) $ (37,124) $ (30,679) s (30,320) $ (34,525) $ (33,586) $ (30,400) $ (33,088) $ (34,511) General Revenues and Other Changes in Net Position Governmental activUies: Taxes Property truces, general purpose 7,818 9,019 $ 7,803 $ 7,783 8,272 8,031 8,315 8.242 8,196 $ 9,101 Property taxes, debt service 1,529 1,711 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 Motor vehicle taxes 1,195 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 Sales tax, general purpose 11,986 11,669 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 Selective sales tax 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other truces 5,747 5,791 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 Investment revenues 805 277 81 77 66 67 98 86 148 92 Miscellaneous 812 505 565 872 660 9,918 1,160 2,371 5,842 2,003 Transfers, net __ 6_0 ____lli_ __ 9_2 ~ ___ 3_0 ~ ___ 1 ----1lli. ___MQQ ~ Total governmental activities 32,540 33,742 33,440 35,097 35,481 45 748 37,783 43,448 47,851 48,002 Business-type activities: Investment revenues 300 242 67 84 79 49 51 56 78 129 Miscellaneous 118 352 341 330 434 279 97 103 Reimbursements 180 132 79 Transfers, net ~ ~ ____fil) ~ _____@Q) _filQ) ~~~ Total business-type activities ~ _.E2 ----11§. ~ ~ __lm) ~ __Q2W ____@,fill ~ Total primary government $ 32,898 $ 34,081 $ 33,756 $ 35,312 $ 35,964 $ 45,126 $ 38,111 $ 39,855 $ 44,427 $ 43,867 Change In Net Position Governmental activities $ 234 $ (4,320) $ (5,965) $ (3,738) $ (466) $ 8,869 $ (1 ,032) $ 4,329 $ 9,083 $ 7,833 Business-type activities ~ ~ ~ ___Jl,ill ~ __!2E ~ ~ ~ --1.fil Total primary government $ 1,976 $ (1.452) $ (3,368) $ 4,633 s 5,644 $ 10,601 $ 4,525 $ 9,455 $ 11,339 $ 9,356 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 104 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2011 2008 2009 2010 !Note 1) 2012 2013 2014 2015 2016 2017 General Fund Reserved $ 274 $ 508 $ 99 $ $ $ $ $ $ $ Nonspendable 90 116 81 107 111 131 153 Restricted Committed Assigned 293 540 331 239 199 136 214 Unreserved/unassigned ~ ~ ~ ~ ~ ~ ~ ~ 4,765 6,516 Total general fund $ 6,030 $ 5,088 3,617 $ 3,837 $ 3,828 $ 3,550 $ 4,254 $ 4,840 $ 5,032 $ 6,883 Restatement ~ Restated fund balance $ 3,773 All other governmental funds Reserved $ 3,951 $ 11,092 $ 6,413 $ $ $ $ $ $ $ Nonspendable Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 Committed 127 (516) 7,486 9,886 8,695 14,284 10,072 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 Unreserved/unassigned ~ ~ ~ --11.MW (6,823) (28) Total all other governmental funds $ 4,305 $ 15,116 $ 5,283 $ 8,061 $ 6,890 $ 14,078 $ 14,076 $ 1,570 $ 11,646 $ 14,876 Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011 . Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 105 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014: 2015 2016 2017 Revenues Taxes (see Schedule 5) $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41 ,597 Intergovernmental 3,741 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 Special assessments 1,178 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 Licenses and permits 10 10 11 6 8 9 7 10 7 6 Charges for services 7,415 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 Investment revenue 490 210 64 69 47 40 59 47 142 79 Reimbursements 39 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 Miscellaneous 597 438 448 599 537 ~ 799 1,853 4,315 1,851 Total revenues 44,258 44,693 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 Expenditures General government 3,600 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 Public safety 17,945 17,883 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 Public works 6,593 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 Public health and sanitation 1,276 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 Culture and recreation 5,142 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 Planning and development 3,377 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 Miscellaneous 32 Capital outlay 10,581 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 Debt service Principal 2,812 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 Interest 1,567 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 Deposit to escrow 107 92 Total expenditures 52,892 61,072 66,089 55,064 56,304 59,172 56,965 74 104 86,856 67,281 Other financing sources (uses) Bonds and notes issued 7,245 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 Bond and note premium 80 1,369 47 23 60 185 302 369 1,503 95 Transfers in 2,823 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 Transfers out (2,763) (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) Issuance costs Other ______!M Total other financing sources (uses) ~ 25,259 ____Lill ~ ~ ~ 5,669 10,923 39,905 15,764 Net change in fund balance $ (1 ,250) $ 8,880 $ (11,898) $ 2,803 ~ $ 6,775 $ 550 $ (12,046) $ 10,268 $ 5,082 Debt service as a percentage of non-capital expenditures 12% 17% 21% 17% 28% 18% 18% 20% 50% 16% Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 106 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Real estate $ 9,084 $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 Delinquent 263 760 278 274 245 248 235 279 246 210 Motor vehicle 1,120 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 General sales 11 ,986 11,669 11,117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 Selective sales 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other taxes 5,747 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 Total taxes $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 107 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Fiscal Estimated Total Assessed (Budget) Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Personal Pro[!e~ State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value (Note2) Market Value 2006 $ 296,537,399 $ 38,662,356 $ 17,624,030 $ 352,823,785 23.999 $ 49,367 ,870 $ 402, 191,655 $ 2,229,131,633 18.04 2007 $ 321 ,695,326 $ 39,691,690 $ 16,530,171 $ 377,917,187 23.789 $ 50,551,299 $ 428,468,486 $ 2,416,543,103 17.73 2008 $ 342,045,389 $ 35,089,042 $ 15,594,056 $ 392,728,487 23.959 $ 50,548,706 $ 443,277, 193 $ 2,612,229,468 16.97 2009 $ 356,678,712 $ 28,373,980 $ 14,929,456 $ 399,982, 148 25.886 $ 51 ,351,656 $ 451,333,804 $ 2,914,775,730 15.48 2010 $ 358,979,211 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 15.48 2011 $ 367,750,803 $ 19,918,188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531 ,746 15.67 2012 $ 369,416,422 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884,188,981 15.65 2013 $ 370,390,092 $ 17,769,120 $ 16,948,264 $ 405,107,476 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 15.71 2014 $ 376,131,346 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 15.64 2015 $ 381,087,426 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531 ,741 15.66 2016 $ 389,872,825 $ 11 ,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51,833,505 $ 472,683, 104 $ 3,046,949,034 15.51 2017 $ 391,895,060 $ 11,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335, 124 $ 3,097,885,103 15.28 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk 108 City of Salina Fiscal Debt Total (Budget) Operating Service City Year MillaQe MillaQe MillaQe 2008 20.047 3.912 23.959 2009 21.749 4.137 25.886 2010 20.082 5.773 25.855 2011 19.236 6.786 26.022 2012 20.326 5.946 26.272 2013 20.242 5.948 26.190 2014 20.539 6.388 26.927 2015 20.692 6.388 27.080 2016 19.950 7.361 27.311 2017 21.694 5.909 27.603 Source: Saline County Treasurer Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed valua) Saline County Debt Total Operating Service County Operating MillaQe MillaQe MillaQe MillaQe 27.435 27.435 42.761 29.347 29.347 46.339 31 .303 31.303 45.341 31.432 31.432 45.818 32.576 32.576 47.127 34.823 34.823 47.133 37.895 37.895 46.599 38.047 38.047 44.088 38.275 38.275 44.465 37.508 37.508 44.069 USD 305 (2\ Other (1 Debt Total Service USD MillaQe MillaQe Other 12.229 54.990 10.775 12.208 58.547 10.971 13.155 58.496 12.401 13.095 58.913 12.131 11 .693 58.820 11.989 11 .516 58.649 12.135 11.517 58.116 12.941 11.517 55.605 13.305 11.655 56.120 13.293 11.674 55.743 13.299 (1) The "Other" column includes the State of Kansas, the Salina Airport Authority. the Salina Public Library and Kansas State Extension District #3. Total 117.159 124.751 128.055 128.498 129.657 131. 797 135.879 134.037 134.999 134.153 (2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered by these jurisdictions. 109 Taxpayer Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Central Mall Realty Holding LLC Kansas Gas Service Sams Real Estate Business Trust/Walmart Menard Inc. Great Plains Manufacturing Union Pacific Wal-mart Real Estate Business Trust Southwestern Bell S&B Motels Individual Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2007 (2006 Assessed Value) Assessed % of Total Type of Business Valuation Valuation Rank Utility $ 7,287,074 2.17% 3 Pizza Manufacturing 12,382,582 3.69% 1 Regional Shopping Center N/A Regional Shopping Center 9,003,313 2.69% 2 Utility 2,633, 187 0.79% 7 Discount Retail Stores N/A Home Improvement N/A Manufacturing 2,308,375 0.69% 9 Railroad N/A Discount Retail Stores 3,627,525 1.08% 6 Telephone Utility 4,783,821 1.43% 5 Motel 2,388,908 0.71% 8 Residential 1,913,209 0.57% 10 Hospital and Medical Offices 5,580,586 1.66% 4 $ 51,908,580 $ 335,262, 182 15.48% 110 2016 (2015 Assessed Value) Assessed %of Valuation Total Rank $ 11,025,004 2.38% 1 7,189,283 1.55% 4 5,106,493 1.10% 2 4,496,340 0.97% 3 3,644,537 0.79% 5 2,526,108 0.55% 6 25,066,064 5.41% 7 2,327,353 0.50% 8 2,288,512 0.49% 9 2,278,951 0.49% 10 $ 65,948,645 $ 463,030,260 14.24% Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Fiscal Taxes Levied (Budget) for the fiscal Delinquent Percentage Year ~ear Amount Percenta~e Collections p ~ Amount of lev~ 2008 $ 9,409,338 $ 9,083,917 96.5% $ 262,511 $ 9,346,428 99.3% 2009 $ 10,354,161 $ 9,923,959 95.8% $ 759,764 $ 10,683,723 103.2% 2010 $ 10,276,905 $ 9,704,937 94.4% $ 278,656 $ 9,983,593 97.1% 2011 $ 10,415,491 $ 10,287,770 98.8% $ 273,843 $10,561 ,613 101 .4% 2012 $ 10,570,420 $ 10,411,299 98.5% $ 245,086 $ 10,656,385 100.8% 2013 $ 10,576,448 $ 10,145,404 95.9% $ 248,184 $ 10,393,588 98.3% 2014 $ 10,908,147 $ 10,776,688 98.8% $ 398,820 $11,175,508 102.5% 2015 $ 11,316,065 $ 10,460,246 92.4% $ 617,496 $ 11 ,077,742 97.9% 2016 $ 11,740,993 $ 10,972,299 93.5% $ 245,577 $11,217,876 95.5% 2017 $ 11,254,398 $ 11 ,239,051 99.9% $ 209,950 $ 11,449,001 101.7% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 111 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2008 2009 2010 2011 0.50% 0.50% 0.50% 0.50% 0.25% 0.25%/0.4( 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 62.31% 62.46% 61.58% 63.34% 2012 2013 2014 2015 2016 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 1.00% 61 .72% 60.86% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 112 2017 0.50% 0.40% 1.00% 60.28% City of Salina, IC.-•• W•••S91Hb)'C1 ... ofC4.otlom•' L•tT..,FlacelY•.,.. "" 2010 2011 "" IAccta OA<ru w .... •Acd1 Wettr '""ru W-1•, IAcctt: W.ter IAccte Weter IAcd1 w .... I Acct• W.t•r tAcd• W•l•r IAcd1 w .... R•taCI"' SHIM! .... . .... ... Blll•d .... Billed .... Biiied .... BNled .... Biiied .... Biii.ct .... Biiied Sold Biiied .... Reaideflfial 17,813 Q9.4,875 17,792 1,043,17-4 17,838 1,127,804 11,899 1,tlM.629 11.893 1,225.931 17,966 969,788 18,042 1,CIOJ,100 18,086 987.s.40 18,125 950,697 18.124 988,572 COrnmercial 1.591 333,720 1,589 339.507 1,568 350.633 1,57-4 372.-499 "5" 38,s.47 1,579 3-46,968 1,599 353,675 1.600 350,767 1,603 J.4'5,232 '·'°' l4.5,250 " 203,491 .. 152,910 .. 183,166 " 1&0.277 " 174.595 " 182,529 " 193,233 202.-407 " 191.236 "' 193.503 Gov.mmenl 152 68,366 , .. -41,793 85 -42,7H " 55.910 s-4.618 99 46,48"( 91 -45,346 •1.928 .. 45,136 .. -41,5.52 Apartment '" 6-4.703 "' 71.503 "' 71,121 ... 12.562 169 70.263 67,155 60.865 ... 61,-400 57.039 58,378 '""""' " ,.,,, .. 39.615 " -46,386 " 53,679 " 57.027 .U,187 •5.318 " -45.,5-45 •1,176 36,039 lndustrial~I ' •2.57-4 32,93-4 ' .U,-457 ' -4-4,051 -40,.U8 20.-09 COl'lllln*lil"lprocludoon " 78.699 26.223 " 32,604 " 22.728 """' " 18,665 ,,.,.. 17,338 9,580 9.632 Rur1fwate1 24,798 ' 22.82-4 ' 23,65'1 ' 28.821 25.UO ' 21,SlO ' 22,993 21,915 ,,,... 25.824 HospiUll 18,723 " 20,4&8 " 18.503 " 15.674 " 17,896 ' 26,..al " 32.18' 31,858 33,728 35.132 Re!i0iou"'"°'1P1cfil 6.913 39 7.312 " 5.569 "' .5.H O "' 5.399 37 4,810 4,973 ..... 5.22• 4.7•9 OthertllK8blededudlon1 8.023 ... En9lneering1tudle1 5.327 6,176 5,266 3,754 6,104 6,822 0.095 4,807 -4,573 4,772 ProvidingluableN!Vlce 4.663 4,869 5.494 -4,827 6,118 3,495 3,581 3,167 3,921 3,3-47 sa1e of ecmpcM<11 par11 5,748 5>00 5,851 5,454 5,726 5,972 6,850 3,900 3,129 2,917 F.ehydrant 1.147 1,032 2,424 1,389 2,533 1,922 1.474 1,727 1.790 lndu1Jlrialcon•umtC1lnprcc1ucborl 3.230 2,314 •.083 3.260 3,S43 4.-417 '·"' '·"' 1,930 1,962 S&leso!farmequlpment ' 256 ' 205 ' "' 56 ' " ' '" " ' 53 ' " ' , .. 11171 1154091 19,193 1111171 11.117 1,170;!02 20IS759 19937 1754027 20011 1,793771 1,ID1S77 20153 177tttl 20,193 11'17716 20112 1.753343 WtffftRat•SclModule; Mcnttily mMet wrve f5Jl!l"J •.51 ... 60 ,.,. .. .. S5.03 '5.20 S5.36 S5.52 Commodity charge (per 000 g.al )· 0-2000gal. ,,.. S3.77 S3.M ..... ..,. S4.4.5 .... $4.77 2001. 10.000 oa• Ove110,000gal Er.aiuusectiarve 5.10 S7.54 S776 ..... $8,48 $8-90 $9.16 S9.5'1 w.-tew.terA.aUll<:hedule; Monttllt baseeh•'Q& 3.51 6.31 6.42 ,.,, S6.17 Sfi.97 $7.11 $722 $7.36 S7.S1 Unitcosl{perOOOgat )' 2.63 2.811 S<l.411 '4.e1 S4.79 .... S5.01 $519 '529 Wate11cldi1up1eeff<llnthcu111nd!cl911llon1 Numbe1 of Accounu bileCI •the annual numbe1 of billings for eadl dllu dMoed by 12. Monthly mete1 charve oncreHes Mt! the al.re of the me•1. Resiaentiel Wastewatt1 it ulculated baaed on Wintar Ouarte1 wate1 con1umptioo. Otl'Hl1 eca>unl1 "' bHeo on mcr#ll)I waw1 ODtl•umptioli 2008 Water Con1umpticn Rate Structure changed from a deCl'H1lng lief 1lructun1 to one rate ano E.>.ceu UH Cha'V' ""'ldi ii double ltia ODt11umplicn rate Scu1ce City of Salinll W•le1 Cu•tCl'flef Accoonting Office Schedule 12 City of Salina, Kansas Rauo of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-T~E:e Activities General General Water Percentage Obligation Loans Capital Temporary Obligation Revenue Loans Temporary Total Primary of Personal Fiscal Year Bonds Pa~able Lease Notes Bonds Bonds Pa~able Notes Government Income Per Caeita 2008 $ 29,869,930 $ $ $ 5,005,000 $2,780,069 $ 3,030,000 $ 6,428,759 $ $ 47,113,758 2.5% $1,014.12 2009 $ 52,067,590 $ $ $ $2,320,000 $ 2,320,000 $ 5,862,516 $ $ 62,570,106 3.5% $1,346.09 2010 $53,120,952 $ $ $ 2,500,000 $8,614,576 $ 1,580,000 $ $ $ 65,815,528 3.8% $1,425.20 2011 $ 55,225,670 $ $ $ 3,400,000 $7,417,907 $16,193,925 $ $ $ 82,237,502 4.3% $1,723.80 2012 $ 49, 109,575 $ $ $ 1,485,000 $9,613,926 $15,850,228 $ $ $ 76,058,729 3.8% $1,583.07 2013 $49,631 ,797 $ $ $ 3,800,000 $8,519,799 $15,226,532 $ $ $ 77,178,128 3.7% $1,613.05 2014 $ 50,033,555 $ $176,235 $ 5,000,000 $9,587,351 $14,592,836 $ 6,208,102 $ $ 85,598,079 4.1% $1,788.25 2015 $ 50,840,632 $ $479,366 $ 5,995,000 $8,539,773 $13,949,139 $ 5,753,620 $ $ 85,557,530 4.1% $1,789.42 2016 $ 51,816,399 $12,157,127 $321,174 $11,505,000 $7,640,381 $13,285,443 $ 7,432,024 $ $ 104,157,548 5.0% $2,200.39 2017 $ 55,994,305 $12,171,090 $157,868 $ 6,811,742 $6,520,433 $12,606,747 $ 8,862,810 $ $ 103, 124,995 4.9% $2,194.43 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 114 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstandin9 General Percentage of Obligation Temporary Less Debt Net General Actual Taxable Fiscal Year Bonds Caeital Lease Notes Total Service Fund Bonded Debi Value of Per Caeita 2008 $ 32,649,999 $ $ 5,005,000 $ 37,654,999 $ 792,744 $ 36,862,255 8.3% $ 793.45 2009 $ 54,387 ,590 $ $ $ 54,387,590 $ 735,291 $ 53,652,299 11.9% $1,154.23 2010 $ 61,735,528 $ $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $1,378.60 2011 $ 62,443,577 $ $ 3,400,000 $ 65,843,577 $ 1,236,026 $ 64,607 ,551 14.4% $1,354.26 2012 $ 58, 723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.2% $1,241.05 2013 $ 58, 151,596 $ $ 3,800,000 $ 61,951 ,596 $ 707,763 $ 61,243,833 13.5% $1,280.02 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $ 64,389,277 14.1% $1,345.17 2015 $ 59,380,405 $ 479,366 $ 5,995,000 $ 65,854,771 $ 745,339 $ 65, 109,432 14.1% $1,361 .75 2016 $ 59,456,780 $ 321 ,174 $ 11 ,505,000 $ 71,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 2017 $62,514,738 $ 157,868 $ 6,811 ,742 $ 69,484,348 $ 1,509,863 $ 67,974,485 14.4% $1,446.45 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 115 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2017 Net General Obligation Percentage Bonded Debt Applicable to Jurisdiction Outstanding City of Salina Direct: City of Salina $ 67,974,485 100.00% Overlapping: Salina Airport Authority 22,632,000 100.00% . Saline County 145,000 75.08% USO 305 123,335,000 93.63% Total Overlapping Debt 146, 112,000 Total Direct and Overlapping Debt $ 214,086,485 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 67,974,485 22,632,000 108,866 115,478,561 138,219,427 $ 206, 193,912 $ 4,312.51 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 116 _egal Debt Margin Calculation for 2017 Assessed Valuation Debt Umit (30% of Assessed Value) Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legat debt margin 2l!Ql! Debt limit 133,224,043 Total net debt applicable to limit 36,862,255 legal debt margin 96,361,788 Total net debt applicable to the limit as a percentage of debt limit 28% $ 473,335, 124 142,000,537 103,124,995 (6,520,433) (12,606,747) (157,868) (21,033,900) (1,509,863) 61,296,184 80,704,353 Zl!lll! 135,400,141 53,652,299 81,747,842 40% Schedule 15 City of Salina, Kansas Legal Debt Margin last Ten Flscat Years Fiscal Year :ll!J..Q 2Qll 2ltl2 134,340,263 134,928,191 135,421,208 58,411,185 57,747,032 49,309,445 75,929,078 77,181,159 86,111,763 43% 43% 36% 117 22.tl Zill 2lli 2Q1li 2ll1Z 136, 196,966 136,896,083 138,909,078 141,804,931 142,000,537 52,724,034 54,625 691 56 090 293 62,072,485 61296184 83,472,932 82,270,392 82,818,785 $ 79,732,446 $ 80,704,353 39% 40% 40% 44% 43% Utility Service Fiscal Year Char~es 2008 $ 14,072,513 2009 $ 14,980,874 2010 $ 16,520,055 2011 $ 17,905,056 2012 $ 19,098,626 2013 $ 17,938,288 2014 $ 18,742,029 2015 $ 19,058,855 2016 $ 19,322,077 2017 $ 19,855,033 Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Operating Net Available Ex~enses Revenue Principal $ 12,754,057 $ 1,318,456 $ 1,038,000 $ 12,524,390 $ 2,456,484 $ 1,276,243 $ 13,571,098 $ 2,948,957 $ 740,000 $ 12,963,891 $ 4,941,165 $ 1,580,000 $ 13,963,941 $ 5,134,685 $ 340,000 $ 14,524,148 $ 3,414,140 $ 620,000 $ 14,002,088 $ 4,739,941 $ 630,000 $ 11,711,823 $ 7,347,032 $ 640,000 $ 13,981,811 $ 5,340,266 $ 660,000 $ 14,720,148 $ 5,134,885 $ 675,000 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 City of Salina Debt Service Schedules 118 Interest Covera~e $ 515,459 85% $ 455,294 142% $ 91,450 355% $ 496,760 238% $ 596,992 548% $ 590,191 282% $ 577,791 392% $ 565,191 610% $ 549,191 442% $ 529,391 426% Per Capita Personal Income Fiscal Year Population !Saline Coun~) 2008 46,458 $ 40,351 2009 46,483 $ 38,392 2010 46,180 $ 37,880 2011 47,707 $ 40,512 2012 48,045 $ 41,762 2013 47,846 $ 43,078 2014 47,867 $ 43,736 2015 47,813 $ 44,065 2016 47,336 $ 44,230 2017 46,994 $ 44,732 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Personal Income, Salina !interpolated) $ 1,874,626,758 $ 1, 784,575,336 $ 1, 7 49,298,400 $ 1,932,705,984 $ 2,006,455,290 $ 2,061,109,988 $ 2,093,511,112 $ 2, 106,879,845 $ 2,093,647,612 $ 2, 102, 135,608 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USD 305 Rate Cit~ of Salina Headcount 3.8% 26,343 7,348 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,258 7,289 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 Personal income for Salina is derived from the population and per capita personal income for Saline County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education. Percentage Asa%of Free and Per Capita .5 per capita Reduced City .5 cent cent sales personal Lunch sales tax Tax income 56.3% $5,177,461 $ 111.44 0.276% 58.7% $4,965,147 $ 106.82 0.278% 57.8% $4,803,553 $ 104.02 0.275% 58.7% $ 5,076,751 $ 106.42 0.263% 59.1% $ 5,241,205 $ 109.09 0.261% 60.7% $ 5,326,723 $ 111.33 0.258% 61.3% $ 5,555,601 $ 116.06 0.265% 61.8% $5,670,040 $ 118.59 0.269% 68.7% $5,727,260 $ 120.99 0.274% 33.4% $5,755,869 $ 122.48 0.274% Increase in per capita Sales Tax (10 years) 14.3% Increase in per capita Personal Income 20.5% Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 119 Employer Salina Regional Health Center Schwan's Global Supply Chain Unified School District No 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Walmart Blue Philips Lighting Company Lock/line Raytheon Aircraft Eldorado National Total Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Type of Business Health Care Frozen Pizza Manufacturing Public School System Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing Manufacturing Retail Fluorescent Lamps Cellular Phone Insurance Aircraft Manufacturing Susses/Recreational Vehicle Emplo~ees 1,082 1,850 935 650 800 493 600 420 357 255 6,360 Source: Salina Chamber of Commerce Most recent Official Statement (EMMA) 120 2008 Rank #N/A 1 2 4 3 6 5 7 8 9 2017 Percentage Percentage of Labor of Labor Force Emplo~ees Rank Force 4.1% 1,800 1 6.5% 7.0% 1,700 2 6.1% 3.5% 1,500 3 5.4% 2.5% 1,100 4 4.0% 3.0% 600 5 2.2% 1.9% 425 6 1.5% 300 7 1.1 % 250 8 0.9% 250 9 0.9% 2.3% 230 10 0.8% 1.6% 1.4% 1.0% 24.1% 6,355 23.0% CITY OF SALINA, KANSAS • GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2018-2 NOTES AND GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018-A BONDS '8 liiii l1 ~ ~ii~ ~ ~ b ·-~ j .. " i!: r ::e:. -~ l 1 ~i ., l E'" ~If -;,.~ c Ill c~ i1 ~ i CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL October 22, 2018 To: Bernardi Securities, Inc. Chicago, Illinois Oppenheimer & Co Providence, Rhode Is~and Re: General Obligation Internal Improvement Bonds, Series 2018-A General Obligation Temporary Notes, Series 2018-2 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule 15c2- 12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: ~ y;?d--- Title: Finance Director Publisher's Affidavit I, __ __,C..,h......,ri ... s....,ty,__..F ..... in ..... k ____ , being duly sworn declare that I am a I egaJ Coordjnator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Bond Sale Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of October 24 s - Subscribed and sworn to before me, this h 5 'i1::,. day of A.D. 20 _Lf_ Notary Public Printer's Fee $285.00 ~~ P(I~ MELISSA WINDHOlZ ~ ~ -~ 3--8 -?-c ~ My Appl Exp. / I ~ I ·~L" ! 2019.::_i; . 2020 ... -;-~021 ~~i· 2022 ' , .... ; 2023 - 202t!."' r 2025 ... -_, 21J2A...;.., -Asiillecl· Y~luitlon · ar)d i ndebteClness. The Equalized 1 ~ Tangible Valuation for ' mputatiOn of Bonded Debt ·1 iUniltations for the year 2017 wa5 · $481,461,005. T.he total general ; 1obligati0r\ bonded indebteQriess ; ,of the issU8f as of the Dat&d Date, ; 'including the Bonds being sold, is ' $54,955,000: ~· , Approval of Bcirids. . The I STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, KRIS W. Ko BACH, Kansas Secretary of State, certify that the records of this office reveal the following: Affidavit of Publication I am the publisher of the Kansas Register, a newspaper published pursuant to K.S.A. 75 -430, and the attached is a true copy of the notice that appeared therein on the date given below : October 25, 2018 In Testimony Whereof: I hereto set my hand and cause to be affixed my official seal. Done at the City of Topeka this 23rd day of October, A.D. 201 8. KRIS W. KOBACH KAN SA S SECRETARY OF STATE -· ....... Bond Sales Kansas Register 1035 The Bonds will be dated November 29, 2018, and will be- come t e on September 1 in the years as follows: Principal Principal ~ r Amount* Year Amount* 20 0 $ 75,000 2030 $ 20,000 75,000 2031 25,000 80,000 2032 130,000 85,000 2033 135,000 85,000 2034 140,000 2025 90,000 2035 145,000 2026 95,000 2036 155,000 2027 100,000 2037 160,000 2028 105,000 2038 170,000 2029 110,000 2039 175,000 bear interest from the · ed when the Bonds e sold as here- hich interest will be ayable semian- nually on March 1 d September 1 in ach year, begin- ning on March 1, 20 9. Book-Entry-Only Sy tern The Bonds shall be r gistered uncle system administered t ough OTC. Paying Agent and Bon Registrar Treasurer of the State Kansas, opeka, Kansas. Good Faith Deposit Each bid shall be accom anied (.in the manner set forth in the Notice) by a good ith deposit in the form of a cashier's or certified check drafn on a bank located in the United States of Americ or a wire transfer in Federal Reserve funds immediately v ilable for use by the Issu- er in the amount of $47,100. Delivery The Issuer will pay for p el\'aration of the Bonds and will deliver the same prop rlYi prepared, executed, and registered without cost to the successful bidder on or about November 29, 2018, to D C for the account of the successful bidder. 1 Assessed Valuation and Indebt dness The Equalized Assessed Tangi~le Valuation for Com- putation of Bonded Debt Limitat' ons for the year 2018 is $27,031,733. The total general o ligation indebtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $2,35'.;j,OOO. I Approval of Bondrs The Bonds wil,l be sold subject to the legal opinion of Gilmore & Bell, P.C., Wichita, Kai;,:tsas, Bond Coun- sel to the Issuer, whose approving legal opinion as to the validity of the Bonds will be furnished and paid for by the Issuer, printed on the Bonds, and delivered to the successful bidder as and when the Bonds are delivered. Additional Information Additional information regarding the Bonds may be obtained from the Financial Advisor at the address set forth below: Issuer -Cool:! Faith Deposit Delivery Address Sandstone Weights Attn: Admirtlstrator / 440 State Street Little River, K~sas 67457 620-897-6266 todds@sandstone eights.com At the option of t e Successful idder, a Good Faith Deposit may be sent ia wire tr sfer as set forth in the Notice. Financial Advisor -Sealed d Facsimile Bid Delivery Address George K. Baum & Co Attn: Steve Shogren 100 N. Main, Suit 10 Wichita, KS 672 316-264-9351 Fax: 316-264-370 shogren@g Dated Octob r 25, 2018. •Subject to change, see the Notice Doc. No. 046679 Todd Schlosser Administrator Sandstone Heights (Published in the Kansas Register October 25, 2018.) City of Salina, Kansas Summary Notice of Bond Sale $2,160,000* General Obligation Internal Improvement Bonds, Series 2018-A Bids (General Obligation Bonds Payable from Unlimited Ad Valorem Taxes) Subject to the Notice of Bond Sale dated October 22, 2018 (the "Notice"), written and electronic bids will be received on behalf of the Clerk of the City of Salina, Kansas (the "Issuer") in the case of written bids, at the address set forth below, and in the case of electronic bids, through PARITY® until 1:00 p.m. (CST) November 1, 2018, for the purchase of the above-referenced bonds (the "Bonds"). No bid of less than 100% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Bond Details The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds will be dated November 27, 2018, and will be- come due on October 1 in the years as follows: Principal Principal October 1 Amount* October 1 Amount* 2019 2020 2021 $125,000 115,000 120,000 2027 2028 2029 $145,000 150,000 155,000 (continued) Vol. 37, No. 43, October 25, 2018 ©Kansas Secretary of State 2018 • ""'' 1036 Kansas Register Bond Sales/Regulations 2022 125,000 2023 130,000 2024 130,000 2025 135,000 2026 140,000 2030 2031 2032 2033 165,000 170,000 175,000 180,000 The Bonds will bear interest from the date thereof at rates to be determined when the Bonds are sold as here- inafter provided, which interest will be payable semian- nually on April 1 and October 1 in each year, beginning on April 1, 2019. Book-Entry-Only System The Bonds shall be registered under a book-entry-only system administered through DTC. Paying Agent and Bond Registrar Treasurer of the State of Kansas, Topeka, Kansas. Good Faith Deposit Each bid shall be accompanied (in the manner set forth in the Notice) by a good faith deposit in the form of a cashier's or certified check drawn on a bank located in the United States of America or a wire transfer in Fed- eral Reserve funds immediately available for use by the Issuer in the amount of 2.00% of the principal amount of the Bonds. Delivery The Issuer will pay for preparation of the Bonds and will deliver the same properly prepared, executed, and registered without cost to the successful bidder on or about November 27, 2018, to DTC for the account of the successful bidder. Assessed Valuation and Indebtedness The Equalized Assessed Tangible Valuation for Com- putation of Bonded Debt Limitations for the year 2017 was $481,461,005. The total general obligation bonded in- debtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $54,955,000. Approval of Bonds The Bonds will be sold subject to the legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, whose approving legal opinion as to the validity of the Bonds will be furnished and paid for by the Issuer, printed on the Bonds, and delivered to the successful bidder as and when the Bonds are de- livered. Additional Information Additional information regarding the Bonds may be obtained from the undersigned, or from the Financial Advisor, at the addresses set forth below: Issuer -Written and Facsimile Bid and Good Faith Deposit Delivery Address Mike Schrage, Interim City Manager 300W. Ash Room 202 Salina, KS 67401 785-309-5700 Fax: 785-309-5711 rnike.schrage@salina.org Financial Advisor George K. Baum & Company Attn: David Arteberry 4801 Main St., Suite 500 Kansas City, MO 64112 816-283-5137 Fax: 816-283-5326 arteberry@gkbaum.com Dated October 22, 2018. •Subject to change, see the Notice Doc. No. 046686 Mike Schrage Interim City Manager (Published in the Kansas Register October 25, 2018.) Potltiwatomie County, Kansas Notice o~Intent to Seek Private Placement General Obligation Bonds, Series 2018-; Notice is hereby iven that Pottawatomie County, Kan- sas (the "Issuer"), oposes to seek a private , lacement of the above-refere ced general obligation ands (the "Bonds"). The maxi um aggregate princip amount of the Bonds shall not ex ed $300,000. The pro osed sale of the Bonds is in all resp cts subject to appro al of a bond purchase agreement bet veen the Issuer an the purchas- er of the Bonds and the doption of a re olution by the governing body of the Iss er authorizin the issuance of the Bonds and the executio of various ocuments neces- sary to deliver the Bonds. Dated October 15, 2018. Doc. No. 046672 State of Kansas Board of Mor ua Nancy McCarter County Clerk Notice of Hearipg on P posed Administr;?:t'.Ve Regul tion A public hearing will be conducted 10:00 a.m. Thurs- day, December 27, 201 at the Kans s State Board of Mortuary Arts, 700 SW J~ckson St., Suit 904, Topeka, KS 66603, to consider the cldoption of a pro osed regulation of the Kansas State B9ard of Mortuary A s, on a perma- nent basis. / This 60-day notice of the public hearin shall consti- tute a public comll)ent period for receivin written pub- lic comments on t(le proposed regulation. All interested parties may submit written comments prioT' to the hear- ing to the Kansas State Board of Mortuary ~ ts, 700 SW Jackson St., Suite 904, Topeka, KS 66603 or y email to mack.smith@ks.gov. All interested parties will be given a reasonable opportunity to present their views rally re- garding the adoption of the proposed regulatio during the public hearing. In order to provide all partie an op- portunity to present their views, it may be necessary to request each participant to limit any oral presentation to five minutes. ©Kansas Se<retary of State 2018 Vol. 37, No. 43, October 25, 2018 SUPPLEMENT DATED NOVEMBER 21, 2018 $13,500,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 TO OFFICIAL STATEMENT FOR CITY OF SALINA, KANSAS $2,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A The section of the attached Official Statement entitled "CONTINUING DISCLOSURE" is hereby updated to read as follows: CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In 2013, the Issuer adopted an Omnibus Continuing Disclosure Undertaking (the "Disclosure Undertaking") wherein the Issuer covenanted to provide annually certain Financial Information and Operating Data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. The Disclosure Undertaking modified previous undertakings the Issuer entered into pursuant to the Rule (the "Prior Undertakings"), in order to promote future compliance with its undertakings under the Rule. In the Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B -OMNIBUS CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Due to administrative oversight in implementation of the new Disclosure Undertaking, for the fiscal year ended December 31, 2013, the Issuer failed to timely file certain operating data, including a "Financial Overview." This operating data was filed in a supplemental operating data filing on July 8, 2014. A notice of failure to file such operating data was filed on July 15, 2015. 2. Certain operating data for the fiscal year ended December 31, 2014 was timely filed in summary form. Additional details related to such summary information were included in the City's audited financial statements for the fiscal year ended December 31, 2014 that were filed on October 26, 2015. 3. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The City's audited financial statements for the fiscal years ended December 31, 2016 and 2017 were not yet completed by the filing deadlines. In compliance of the City's prior disclosure undertakings, the City timely filed unaudited financial statements. The City filed the audited financial statements for fiscal years ended December 31, 2016 and 2017 promptly when they became available which was October 16, 2018. The City's final audited financial statements for these years were delayed because of challenges with financial software conversion, staff turnover and delayed receipt of component unit audits. CITY OF SALINA, KANSAS In the opinion of Gilmore & Bell, P. C., Bond Counsel to the City, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"): (1) the interest on the Notes and Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. New Issues Book-Entry Only $13,500,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 Dated: Date of Delivery Moody's Ratings: Bonds-"Aa3" Notes-"MIGl" CITY OF SALINA, KANSAS $2,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A Due: As Shown Herein The General Obligation Temporary Notes, Series 2018-2 Notes (the "Notes") will be issued by the City of Salina, Kansas (the "Issuer" or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book-entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the "Note Paying Agent" and "Note Registrar."). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES -"Redemption Provisions" herein. The General Obligation Internal Improvement Bonds, Series 2018-A Bonds (the "Bonds") will be issued by the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2019 . The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and "Bond Registrar"). The Bonds are subject to redemption at the option of the City as further described herein. See THE BONDS-"Redemption Provisions" herein. MATURITY SCHEDULES (see inside front cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of Bond Counsel. It is expected that the Notes and Bonds will be available for delivery through the facilities of DTC on or about November 27, 2018. THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. Maturity 11-15-19 MATURITY SCHEDULES $13,500,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 Amount $13,500,000 Rate 2.500% Yield 2.000% Base cus1P'1' 794744 BNl At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on June 1, 2019, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. $2,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A SERIAL BONDS Base cus1P'1i Maturity Amount Rate Yield 794744 10-01-19 $115,000 4.000% 2.000% AXO 10-01-20 110,000 4.000 2.150 AY8 10-01-21 115,000 4.000 2.250 AZ5 10-01-22 120,000 4.000 2.350 BA9 10-01-23 120,000 4.000 2.450 BB7 10-01-24 125,000 4.000 2.550 BC5 10-01-25 130,000 4.000 2.650 BD3 10-01-26(2) 135,000 4.000 2.700 BEl 10-01-27(2) 145,000 4.000 2.750 BF8 10-01-28(2) 150,000 4.000 2.800 BG6 10-01-29(2) 155,000 4.000 2.850 BH4 10-01-30(2) 160,000 3.150 3.200 BJO 10-01-31 !2l 165,000 3.250 3.300 BK7 10-01-32(2) 170,000 3.350 3.400 BL5 10-01-33(2) 175,000 3.400 3.450 BM3 (llCUSIP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. !Zl At the option of the City, Bonds maturing on October 1, 2026 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 202S, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOK/NG STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATER/ALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOK/NG STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOK/NG STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300 West Ash P. 0. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Karl Ryan, Mayor Trent W. Davis, M.D., Vice Mayor Mike Hoppock, Commissioner Melissa Rose Hodges, Commissioner Joe Hay, Jr., Commissioner CITY STAFF Mike Schrage, Interim City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri MUNICIPAL ADVISOR George K. Baum & Company Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ............................................................................................................. 1 THE NOTES .......................................................................................................................................... 2 THE BONDS......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN ......................................................................................................................... 12 SOURCES AND USES OF FUNDS .......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS ......................................................................... 13 LEGAL MATTERS ................................................................................................................................. 16 TAX MATTERS ..................................................................................................................................... 16 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 18 UNDERWRITING ................................................................................................................................. 18 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 18 CONTINUING DISCLOSURE ................................................................................................................. 18 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 19 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY .............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY ..................................................................... A-6 DEBT SUMMARY OF THE CITY ....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................................... A-13 APPENDIX B: OMNIBUS CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2017 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $13,500,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 $2,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $13,500,000 General Obligation Temporary Notes, Series 2018-2 (the "Notes"), and its $2,090,000 General Obligation Internal Improvement Bonds, Series 2018-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City and the Salina Airport Authority. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATIERS, TAX MATIERS, and APPENDIX a-OMNIBUS CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. 1 THE NOTES Authority The Notes are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq., (specifically including K.S.A. 10-123), K.S.A. 10-620 et seq., K.S.A. 12-631r et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 65-163u, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest from the proceeds of general obligation bonds of the Issuer, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated November 27, 2018 (the "Dated Date"), shall become due in the amount on the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on June 1, 2019, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). 2 Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar" and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for 3 exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed 4 by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mai l, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES-Book-Entry Notes; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less 5 than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq. and K.S.A. 12- 6a01 et seq., all as amended, and an ordinance and resolution adopted by the governing body of the City authorizing the issuance of the Bonds (collectively, the "Bond Resolution"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain public improvements (as herein after described in the section entitled "THE FINANCING PLAN. The Bond Projects"), and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 6 Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes and/or assessments shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes and/or assessments shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. Description The Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated November 27, 2018 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2026 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2025, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. 7 All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees 8 that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to t he address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date sha ll be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See ''THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such 9 Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. 10 THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond certificate will be issued for each scheduled maturity of the Securities, and will be deposited with DTC. 2. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly {"Indirect Participants"). DTC has a Standard & Poor's rating of "AA+". The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner'') is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 11 Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (the "Note Projects") and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Downtown Streetscape Police Training Center Ordinance/ Resolution Ord. 17-10888 Res. 17-7458 Authority K.S.A. 12-631r; K.S.A. 12- 685 et seq; K.S.A. 65-163u K.S.A. 12-1736 et seq. Total Improvement Fund Deposit $8,521,270. 79 4,925, 729.21 $13,447,000.00 (Excludes issuance costs) A portion of the Note proceeds will be used to retire a portion of general obligation temporary notes of the City previously issued for certain Note Projects as well as pay issuance costs. 12 The Bond Projects Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City {the "Bond Projects"), to pay the costs associated with the issuance of the Bonds and retire a portion of the City's outstanding general obligation temporary notes. The Bond Projects are as follows: Project Description Grand Prairie Addition, Phase II River Trail Second Addition Beechcraft Road Resolution Res. 16-7394 Res. 16-7365 Res. 17-7470 Authority K.S.A. 12-6a01 et seq. K.S.A. 12-6a01 et seq. K.S.A. 12-685 et seq. Total Improvement Fund Deposit $305,058.35 753,728.34 1.062,581.65 $2,121,368.34 {Excludes issuance costs) SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Original Issue Premium/ Discount Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Underwriter's Discount Costs of Issuance Total Application of Funds $13,500,000.00 34,020.00 $13,534,020.00 $13,447,000.00 25,515.00 61,505.00 $15,534,020.00 RISK FACTORS AND INVESTMENT CONSIDERATIONS $2,090,000.00 88,123.35 $2,178,123.35 $2,121,368.34 18,287.50 38.467.51 $2, 178,123.35 A PROSPECTIVE PURCHASER OF THE THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITER. Legal Matters Various state and federal laws, regulations and con stitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable 13 bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A-FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." Kansas Public Emplovees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under "TAX 14 MATIERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on Bonds The initial offering prices of certain maturities of the Bonds that are subject to optional redemption may be in excess of the respective principal amounts thereof. Any person who purchases such a Bond in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Bonds are subject to redemption at par under the various circumstances described under "THE BONDS -Redemption Provisions." No Additional Interest or Mandatory Redemption upon Event of Taxability Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors wh ich may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds 15 is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities be ing subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B - OMNIBUS CONTINUING DISCLOSURE UNDERTAKING. TAX MATTERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §26S(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. 16 Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code§ 1288, OID on tax-exempt obligations accrues on a compound basis. The amount of OID that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on such Security (determined on the basis of compounding at t he close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Sole, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. 17 RATINGS The City has applied to Moody's Investors Service for a rating on the Notes and Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. MUNICIPAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by Oppenheimer & Co., Philadelphia, Pennsylvania, (the "Notes Underwriter") at a price equal to the principal amount of the Notes, plus an original issue premium of $34,020.00, less an underwriting discount of $25,515.00. The Bonds are being purchased by Bernardi Securities, Inc., Chicago, Illinois (the "Bonds Underwriter") at a price equal to the par amount of the Bonds, plus a net original issue premium of $88,123.35, less an underwriting discount of $18,287 .50. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the "Underwriters". ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In 2013, the Issuer adopted an Omnibus Continuing Disclosure Undertaking (the "Disclosure Undertaking") wherein the Issuer covenanted to provide annually certain Financial Information and Operating Data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board . The Disclosure Undertaking modified previous undertakings the Issuer entered into pursuant to the Rule (the "Prior Undertakings"), in order to promote future compliance with its undertakings under the Rule . In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B -OMNIBUS CONTINUING DISCLOSURE UNDERTAKING ." 18 The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Due to administrative oversight in implementation of the new Disclosure Undertaking, for the fiscal year ended December 31, 2013, the Issuer failed to timely file certain operating data, including a "Financial Overview." This operating data was filed in a supplemental operating data filing on July 8, 2014. A notice of failure to file such operating data was filed on July 15, 2015. 2. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The City's audited financial statements for the fiscal years ended December 31, 2016 and 2017 were not yet completed by the filing deadlines. In compliance of the City's prior disclosure undertakings, the City timely filed unaudited financial statements. The City filed the audited financial statements for fiscal years ended December 31, 2016 and 2017 promptly when they became available which was October 16, 2018. The City's final audited financial statements for these years were delayed because of challenges with financial software conversion, staff turnover and delayed receipt of component unit audits. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 19 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2017 Estimated Actual Valuation (1) 2017 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2016 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,097,885,103 $ 481,461,005 $ 54,885,000 $ $ $ $ $ $ $ $ 46,994 1,168 1.77% 11.40% 18,115,000 11,973,966 939,264 11,850,000 124,811,822 209, 785, 788 4,464 6.77% 43.57% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY -"Estimated Actual Valuation". (2) Includes the Bonds. Preliminary; subject to change. (3) Does not include notes to be retired with proceeds from the sale of the Series 2018-A Bonds and the Series 2018-2 Notes. Preliminary; subject to change. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full fa ith and credit. See DEBT SUMMARY OF THE CITY -"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY -"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2017 U.S. Census Bureau estimate of 46,994. The City is the county seat for Saline County which had an estimated 2017 U.S. Census Bureau population of 54,734. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Karl Ryan Trent W. Davis, M.D. Mike Hoppock Melissa Rose Hodges Joe Hay, Jr. Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2020 2020 2022 2022 2022 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,994 47,336 47,813 47,867 47,846 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 194 full-time employees for out of the 436 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full -time firefighters. The fire department operates 35 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 102 personnel, of which 72 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,400. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. A military school is located in the City and operates both a grade school and high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 572 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 791 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 50 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina . Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by Great Lakes Airlines. The airline offers daily scheduled passenger air service to Denver International Airport with a 30-passenger Embraer EMB-120 regional aircraft. Great Lakes Airlines is a United Airlines code share partner. A-3 Utilities and Infrastructure Westar Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $1.042 billion as of Spring 2018. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of December 31, 2017, KPERS serves approximately 311,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. (b) Local Group -all participating cities, counties, library boards, water districts and political A-4 subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to Ju ly 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuaria l valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution is 8.39% of the employee's gross salary for calendar year 2018. The Issuer's contribution is projected to change to 8.89% of gross compensation for calendar year 2019. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2017 (the "2017 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1.458 billion at the end of 2017. The amount of the UAAL in 2017 changed from the previous year's amount due to the factors discussed in the 2017 Valuation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2017 Valuation Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2017 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2017 Va luation Report sets the employer contribution rate for the period beginning January 1, 2020, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.61% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2017 Valuation Report. The statutory contribution rate of employers currently equals the 2017 Valuation Report's actuarial rate. As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2017 Valuation Report, KP&F carried an UAAL of approximately $859 million at the end of 2017. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2018, the Issuer contributes 20.09% of employees' gross compensation. Beginning January 1, 2019, the Issuer's contribution is projected to change to 22.13% of gross compensation for calendar year 2019. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums, tennis courts, and ice and roller skating facilities. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, EIDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips lighting. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas first class cities in 2012 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2016, over 100 businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 3,600 employees with a combined payroll in excess of $143.2 million. The report also cited that the Airport/ Airport Industrial Center accounted for 12 percent of the employment in Saline County and 25 percent of the total economic activity in a seven-county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2017 to be 25,815 persons and year-to-date 2018 to be $25,815. The estimated median household income for the City in 2016 was $45,896 and owner-occupied housing rates in the City were 63.7% Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority") is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous 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. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, SkyWest Airlines began daily United Express Jet Service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier-manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2017, the Salina Air Traffic Control Tower logged over 61,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.6 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2017 and 1,680,242 as of August 2018. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight 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 and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwan's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Wal mart Philips Lighting Company Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,800 1,700 1,500 1,100 600 425 300 250 250 230 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A $44,732 43,552 41,447 41,096 40,235 State of Kansas $47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2018 (Aug) 25,815 24,975 840 3.3% 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 2014 26,303 25,159 1,144 4.4 2013 25,458 24,515 1,459 5.1 A-8 State of Kansas: Total Unemployment Year Labor Force Em!!IOl!'.ed Uneml!IOl!'.ed Rate 2018 (Aug) 1,476,834 1,425,342 51,492 3.5% 2017 1,478,783 1,425,216 53,567 3.6 2016 1,484,001 1,422,122 61,879 4.2 2015 1,499,009 1,435,884 63,125 4.2 2014 1,500,353 1,432,359 67,994 4.6 2013 1,491,745 1,405,036 86,709 5.3 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Purl!OSe of Issue Maturitl!'. Outstanding!11 12-15-08 2008-B Internal Improvements $3,525,000 07-01-24 $1,035,000 07-15-09 2009-A Internal Improvements 23,695,000 10-01-20 2,845,000 05 -01-10 2010-A Refunding & Improvement 6,875,000 10-01-20 650,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 1,720,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-21 1,095,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 1,495,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 415,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 995,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 3,170,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 5,240,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01 -35 5,860,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 6,060,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 13,080,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 9,135,000 11-27-18 2018-A Improvements (the Bonds) 2,090,000 10-01-33 2,090,000 Total $54,885,000 1111ncludes the Bonds. A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Series 2016-2 2018-1 2018-2 '1'1ncludes the Notes. Date Issued 07-20-16 07-30-18 11-27-18 Maturity Date 09-01-19 12-01-18 11-15-19 Final Original Note Amount Amount Outstanding<1J $4,615,000 $4,615,000 6,000,000 6,000,000'2l 13,500,000(2) 13,500,000 $18,115,000 '2'To be redeemed with proceeds from the sale of the Notes, Bonds or other available funds. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Issued 04-15-11 Purpose Improvements Amount of Issue $16,120,000 Final Maturity 10-01-31 Amount Outstanding $11,850,000 Lease Obligations (as of December 31, 2017): State Loans Item HVAC System Year Issued 2012 Original Amount 1,100,000 Final Year 2027 Amount Outstanding $939,264 The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultimately secured by the City's ability to levy unlimited ad valorem property taxes. Project Year Final Original Amount Number Purpose Originated Payment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $9,330,000 $ 7,967,785 KDHE 2841 Water 2015 08-01-35 4,250,000 4,006,181 $11,973,966 A-10 Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Amount Outstanding $ 21,040,000 260,000 110,555,000 Estimated Share of the City Jurisdiction Salina Airport Authority Saline County* Unified School District No . 305 *As of December 31, 2017 Annual Debt Payments (to be updated) Amount $ 21,040,000 192,842 103,578,980 $124,811,822 Percentage 100.00% 74.17 93.69 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2018-A Bonds Year Principal Interest Principal Interest Total 2019 $6,690,000 $1,598,986 $115,000 $66,582 $8,470,568 2020 4,545,000 1,402,656 110,000 74,248 6,131,904 2021 4,340,000 1,269,786 115,000 69,848 5,794,634 2022 4,420,000 1,121,296 120,000 65,248 5,726,544 2023 4,260,000 950,741 120,000 60,448 5,391,189 2024 3,870,000 784,621 125,000 55,648 4,835,269 2025 3,445,000 690,406 130,000 50,648 4,316,054 2026 3,110,000 604,336 135,000 45,448 3,894,784 2027 2,835,000 523,041 145,000 40,048 3,543,089 2028 2,495,000 447,896 150,000 34,248 3,127,144 2029 2,185,000 379,589 155,000 28,248 2,747,837 2030 1,680,000 321,726 160,000 22,048 2,183,774 2031 1,680,000 273,964 165,000 17,008 2,135,972 2032 1,560,000 224,892 170,000 11,645 1,966,537 2033 1,510,000 176,844 175,000 5,950 1,867,794 2034 1,470,000 129,613 1,599,613 2035 1,230,000 83,250 1,313,250 2036 930,000 45,413 975,413 2037 540,000 18,225 558,225 $52, 795,000 $11,047,281 $2,090,000 $647,307 $66,579,588 *Excludes payments made prior to the closing date of the Bonds. A-11 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2017 $59,985,000 12.46% 1.94% 43,336 $1,267.22 2016 56,875,000 12.03 1.87 47,813 1,189.53 2015 57,535,000 12.43 1.94 47,867 1,201.98 2014 63,805,000 13.98 2.19 47,707 1,337.43 2013 64,515,000 14.21 2.23 48,045 1,342.80 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $15 million of improvements including construction of a riverfront renewal project and police training facility. A portion of the debt service payments on bonds issued for the riverfront project are anticipated to be paid from local sales tax. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City currently expects to issue STAR Bonds by December 2018 in the approximate principal amount of $23,500,000 to finance and refinance certain improvements in the City's downtown consisting of a fieldhouse, various infrastructure improvements and certain private improvements. The STAR Bonds are expected to be primarily payable from the tax increment from certain state and local sales tax, compensating use tax and transient guest tax generated within the downtown STAR bond district; the STAR Bonds will not be general obligations of the City. A portion of the proceeds of the STAR Bonds may be used to retire the City's General Obligation Temporary Notes, Series 2016-2, previously issued to temporarily finance certain costs of the fieldhouse. The City has been involved with civil litigation concerning environmental contamination in certain areas within the boundaries of the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University (the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency (DoD) caused contamination. The Salina Public Entities have reached a settlement agreement with the U.S. Department of Justice (DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provides for a 10% local share of initial project costs to be paid by the City. The Consent Decree settlement is in relation to an investigation to determine the extent and severity of the contamination and to determine the best method of remediation. It does not include any funding for actual remediation, but the investigation is fully funded by the settlement. Once the investigation is completed, there will be another round of negotiations with the Federal Government to determine respective financial responsibilities for remediating the contamination. In the event funding cannot be secured in a timely fashion or in sufficient amounts, it may be necessary for the City to issue debt to relocate certain water supply wells. The exact timing and amount, if any, of such borrowing cannot be determined at this time. If City borrowing is necessary for the project, it is anticipated that utility revenue bonds will be the final type of debt considered. A-12 Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the "Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; (E) expiration of any abatement of property from property tax; or A-13 (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or (F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding ca lendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "(w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax Lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "[b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific A-14 debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2017 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"), which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2014 2015 2016 2017 Property Taxes $ 9,278,832 $9,244,160 $9,217,596 $10,115,784 Sales Tax 12,688,980 12,930,811 12, 780,891 12,906,032 Other Taxes 5,636,239 5,663,843 6,347,717 5,215,264 Intergovernmental 1,162,384 975,720 1,301,106 1,133,310 Charges for Services 7,826,289 6,046,903 6,472,698 6,153,450 Investment Revenue 11,536 0 102,045 3,336 Miscellaneous 629,259 498,557 507,330 1,709,491 Total Revenues $37,233,769 $35,359,034 $36, 729,383 $37,236,667 Expenditures: General Government $ 3,986,212 $5,342,433 $5,422,010 $5,423,241 Public Safety 19,558,487 21,267,630 21,664,398 21,628,730 Public Works 6,949,477 4,875,641 5,066,426 5,328,315 Public Health and Sanitation 146,178 754,347 703,606 749,656 Culture and Recreation 2,697,564 4,039,856 4,147,736 4,424,221 Planning and Development 2,209,836 586,358 980,950 752,825 Capital Outlay 843,975 1,041,690 1,098,587 896,026 Total Expenditures $36,391,729 $37,907,955 $39,083,713 $39,203,014 Revenues Over (Under) $842,040 $(2,548,921) $(2,354,330) $(1,966,347) Other Sources (Uses) (137,351) 2,962,350 2,546,500 3,816,500 Net Change in Fund Balance $704,689 $413,429 192,170 1,850,153 A-15 Fund Balance January 1 Restatement of Prior Year Balance Fund Balance December 31 Assessed Valuation $3,549,740 0 $4,254,429 $4,254,432 172,325 $4,840,186 $4,840,186 0 $5,032,356 $5,032,356 0 $6,882,509 According to the Saline County Clerk's Office, the fol lowing table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propert~l2l Utilities Vehicle Valuation 201811) $404,305,533 $9,417,565 $20,485,144 $50,970,796 $485,179,038 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 2013 370,390,092 17,769,120 16,948,264 48,882,411 453,989,887 Ill Preliminary 2018 assessed valuation figures used for budgeting purposes. 2018 motor vehicle valuation not yet available; 2017 data used for estimation purposes only. l2lPersonal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2018 2017 2016 2015 2014 2013 2012 Special Assessments Residential Real Estate Equalization Ratio N/A N/A 11.36 11.28 11.65 11.55 11.95 Estimated Actual Value $3, 137,602,986 3,097,885,103 3,046,949,034 2,968,008, 193 2,917,267,724 2,889,385,914 2,884,188,981 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of A-16 credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes . Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the veh icle is registered. Motor veh icle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount ~ Amount ~ 2017* 26.129 $11,163,201 $10,903,120 97.7% $10,933, 735 97.9% 2016 27.603 11,566,105 11,321,285 97.9 11,505,024 99 .5 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 2014 27.080 10,991,959 9,312,515 84.7 10,832,972 98 .6 2013 26.927 10,868,225 8,101,775 74.5 10,839,120 99 .7 2012 26.190 10,550,730 6,597,038 62.5 10,500,249 99 .5 *Represents collections through September 21, 2018. A-17 Tax Levies Nov Nov Nov Nov Nov Nov 2012 2013 2014 2015 2016 2017 Levy Levy Levy Levy Levy Levy City of Salina 26.190 26.927 27.080 27.311 27.603 26.129 Salina Library 5.452 5.761 6.034 5.895 5.893 5.989 State Education & Other 1.500 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 58.649 58.116 55.605 56.120 55.743 56.501 Airport Authority 4.007 4.504 4.486 4.396 4.396 4.225 Central Kansas Extension District 1.176 1.176 1.285 1.502 1.510 1.475 Saline County 34.823 37.895 37.047 38.275 37.508 37.321 Total 131.797 135.879 134.037 134.999 134.153 133.140 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2017 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Westar Utility $11,856,980 2.46% SFC Global Supply Chain Inc Manufacturing 7,508,620 1.56% RAF Salina LLC Regional Shopping Center 4,674,872 0.97% Kansas Gas Service Utility 3,784,188 0.79% Central Mall Realty Holding LLC Retail Shopping Center 3,696,437 0.77% S&B Motels Inc Motel 3,424,974 0.71% Sams Real Estate Business Trust/Walmart Discount Store 2,529,908 0.53% Menard Inc. Home Improvement Store 2,501,856 0.52% Individual Residential 2,333,789 0.48% Wal-Mart Retail 2,282,451 0.47% Total $44,594,075 9.26% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is : Year Value 2018 (Sept) $57,989,096 2017 59,975,197 2016 97,910,328 2015 56,989,007 2014 24,214,432 2013 29,285,213 A-18 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The total sales tax for goods and services in the City is 8.75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. 2016 1992 City's Portion of .75% Citywide .50% Citywide 1% Countywide Local Option Local Option Local Option Year Sales Tax Receipts Sales Tax Receipts Sales Tax Receipts 2018(l) $5,196,237 $3,464,158 $4,392,098 2017 8,642,821 5,761,881 7,368,869 2016 4,648,280(2) 5,810,350 7,312,618 2015 4,610,032(2) 5,762,541 7,376,708 2014 4,488,672(2) 5,610,840 7,188,934 2013 4,313,345(2) 5,391,681 6,998,806 (llAs of July, 2018 l2lcollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the 2016 sales tax. Source: City Clerk Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from A-19 future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Rai lroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. A-20 Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2016 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.36%, and commercial and industrial property was 24.68%. A-21 APPENDIX B Omnibus Continuing Disclosure Undertaking CITY OF SALINA, KANSAS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING DATED AS OF JULY 15, 2013 OMNIBUS CONTINUING DISCLOSURE UNDERTAKING THIS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING (the "Disclosure Undertaking"), dated as of July 15, 2013, is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Disclosure Undertaking is executed and delivered by the Issuer, pursuant to a resolution adopted by the governing body of the Issuer to consolidate the continuing disclosure obligations of the Issuer with respect to the Bonds and the Prior Undertakings, both as defined below, to enhance efficiency of the administration of Prior Undertakings and promote timely disclosure by the Issuer. 2. The Issuer is executing this Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist each Participating Underwriter in complying with the SEC Rule, as defined below. The Issuer is the only "obligated person," as defined in the SEC Rule, with responsibility for continuing disclosure hereunder. 3. This Disclosure Undertaking shall apply with respect to any series of Bonds issued prior to the effective date hereof and subject to the SEC Rule. In consideration of the foregoing, the Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized term used in this Disclosure Undertaking, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described in, Section 2 of this Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the Financial Information and Operating Data. "Beneficial Owner" means, with respect to a series of Bonds, any registered owner of any Bonds of such series and any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds of such series (including persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds of such series for federal income tax purposes. "Bond Insurer" means the provider of the bond insurance policy, if any, for any series of Bonds. "Bond Resolution" means collectively the ordinance(s) and/or resolution(s) of the governing body of the Issuer authorizing the issuance of each series of the Bonds. "Bonds" means all bonds, notes, installment sale agreements, leases or certificates intended to be a debt obligation of the Issuer identified on Schedule 1 as such schedule may be supplemented and amended and, as context may require, the Bonds of any particular series identified on Schedule 1. The Issuer may make future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. "Business Day" means a day other than: (a) a Saturday, Sunday or legal holiday; (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the trustee, any paying agent or a Dissemination Agent, as applicable, is located are required or authorized by law to remain closed; or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Designated Agent" means Gilmore & Bell, P.C. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of this Disclosure Undertaking. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation substantially in the form attached hereto as Exhibit C. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Information" means the financial information of the Issuer described in Section 2(a)(J) hereof. "Fiscal Year" means the one-year period ending December 31 , or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units, as in effect at the time of the preparation of the Financial Information. "Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any of the events listed in Section 3(a) hereof. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the SEC Rule. "Official Statement" means collectively the Issuer's Official Statement(s) for each series of the Bonds, including all appendices and exhibits thereto. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "Participating Underwriter" means each of the original underwriters of a series of Bonds required to comply with the SEC Rule in connection with the offering of such Bonds. "Prior Undertakings" means the prior continuing disclosure undertakings of the Issuer under the SEC Rule. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission of the United States. "SEC Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. 2 "System" means the entire combined waterworks plant and system and sewerage plant and system owned and operated by the Issuer for the production, storage, treatment and distribution of water, and for the collection, treatment and disposal of sewage, to serve the needs of the Issuer and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the Issuer. Section 2. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ended in 2013 , file with the Repository the Issuer's Annual Report, consisting of the Financial Information and Operating Data described as follows: ( 1) Financial Information. The financial statements of the Issuer and the System for such prior Fiscal Year, accompanied by an audit report resulting from an audit conducted by an Independent Accountant in conformity with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all governmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accounting basis is contained in Appendix A of the Official Statement. If such audit report is not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain summary unaudited financial information and the audit report and accompanying financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Information may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as of the end of the Fiscal Year of certain financial information and operating data described in Exhibit A, with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer; provided, any substantive change to information provided shall be effected only in accordance with Section 6 hereof. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the Repository. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(b). (b) From and after such time that Section (b)(S) of the SEC Rule applies to any series of Bonds, ifthe Annual Report is not filed within the time period specified in subsection (a) hereof, the Issuer shall send a notice to the Repository in a timely manner, in substantially the form attached as Exhibit B. 3 ( c) Pursuant to Section ( d)(3) of the SEC Rule, the provisions of Section 2(a)(J) hereof shall not apply to any Bonds with a stated maturity of 18 months or less. Section 3. Reporting of Material Events. (a) No later than 10 Business Days after the occurrence of any of the following Material Events, the Issuer shall give, or cause to be given, to the Repository notice of the occurrence of any of the following Material Events with respect to the Bonds, with copies to the Bond Insurer, if any: (I) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; ( 10) release, substitution or sale of property securing repayment of the Bonds, if material; (I 1 ) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer or System (which shall be deemed to occur as provided in the SEC Rule); ( 13) the consummation of a merger, consolidation, or acquisition involving the Issuer or System or the sale of all or substantially all of the assets of the Issuer or System, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional paying agent or trustee or the change of name of the paying agent or trustee, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. 4 Section 4. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as Dissemination Agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Disclosure Undertaking. (b) Annual Reports. Except as provided in Section 2(c) hereof, if a Dissemination Agent is appointed, not later than 15 Business Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent or the Repository. The Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Undertaking, stating the date it was filed, or that the Issuer has certified to the Dissemination Agent that the Issuer has filed the Annual Report with the Repository. Except as provided in Section 2(b) hereof, ifthe Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report with the Repository, by the date required in Section 2(a), the Dissemination Agent shall send a notice to the Repository in substantially the form attached as Exhibit A. (c) Material Event Notices. (I) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) Whenever the Issuer obtains knowledge of the occurrence of an event, because of a notice from the Dissemination Agent pursuant to Section 4(c)(l) or otherwise, the Issuer shall promptly determine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent of such determination. If appropriate, such writing shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer and the Bond Insurer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. (d) Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Undertaking, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of 5 the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Undertaking. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Undertaking for a particular series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of that series of Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as permitted in the Bond Resolution, such person shall be responsible for compliance with under this Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or assumption occurs prior to the final maturity of such Bonds, the Issuer shall give notice of such termination or assumption in the same manner as for a Material Event under Section J(b). Section 6. Bonds Subject to this Disclosure Undertaking; Amendment; Waiver. (a) All outstanding Bonds as of the date of this Disclosure Undertaking shown on Schedule 1 are hereby made subject to this Disclosure Undertaking. The Issuer may make any future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. (b) All references to the "Bonds" in this Disclosure Undertaking shall apply separately to each series of Bonds that are or become subject to this Disclosure Undertaking, without further amendment hereto. (c) Notwithstanding the prov1s10ns of subsection (d) or anything else contained in this Disclosure Undertaking to the contrary, in conjunction with the public offering of any series of Bonds, the Issuer and the Dissemination Agent may amend the categories of Operating Data to be updated as set forth in Section 2(a)(2) and Exhibit A to conform to the operating data included in the final Official Statement for such series of Bonds, in conformance with the requirements and interpretations of the SEC Rule as of the date of such final Official Statement, without further amendment to this Disclosure Undertaking. Thereafter, the Operating Data to be filed by the Issuer with the Repository with respect to the Bonds (and all other series of Bonds then subject to this Disclosure Undertaking) shall be deemed to be amended to reflect the requirements of the revised Exhibit A for the new series of Bonds. (d) Except as otherwise provided in subsection (c), the Issuer may amend this Disclosure Undertaking and any provision of this Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to this Disclosure Undertaking; provided, however, that this Disclosure Undertaking, including Schedule 1 hereto, may be amended for the purpose of (I) extending the coverage of this Disclosure Undertaking to any additional series of Bonds or (2) removing reference to any series of Bonds for which the Issuer's reporting obligations have terminated in accordance with Section 5 hereof, each without the provision of a written opinion as otherwise required by this paragraph. 6 (e) If a provision of this Disclosure Undertaking is amended or waived with respect to a series of Bonds pursuant to subsection (d), the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, ifthe amendment relates to the accounting principles to be followed in preparing financial statements: (I) notice of such change shall be given in the same manner as for a Material Event under Section 3(b); and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative fonn) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other infonnation, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under this Disclosure Undertaking to update such infonnation or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of this Disclosure Undertaking with respect to a series of Bonds, any Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under this Disclosure Undertaking. Noncompliance with the provisions of this Disclosure Undertaking shall not be deemed an Event of Default under the Bond Resolution or the Bonds, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with this Disclosure Undertaking shall be an action to compel performance. Section 9. Notices. Any notices or communications to or among the parties referenced in this Disclosure Undertaking shall be given the Notice Representatives at the Notice Addresses set forth in the Bond Resolution for each series of Bonds; provided notice to the Dissemination Agent shall be given at the Notice Address set forth on Exhibit C hereto. Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, each Participating Underwriter and Beneficial Owners from time to time with respect to a series of Bonds, and shall create no rights in any other person or entity. Section 12. Severability. If any provision in this Disclosure Undertaking, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Disclosure Undertaking shall not in any way be affected or impaired thereby. 7 Section 13. Governing Law. This Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 8 IN WITNESS WHEREOF, the Issuer has caused this Disclosure Undertaking to be executed as of July 15,2013. CITY OF SALINA, KANSAS (SEAL) Mayor Clerk (Signature Page to Continuing Disclosure Undertaking) SCHEDULE I DESCRIPTION OF BONDS SUBJECT TO DISCLOSURE UNDERTAKING General Obligation Bonds (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Internal Improvement Bonds, Series 2008-B General Obligation Internal Improvement Bonds, Series 2009-A General Obligation Refunding and Improvement Bonds, Series 2010-A General Obligation Refunding Bonds, Series 20 I 0-B General Obligation Internal Improvement Bonds, Series 2011-A General Obligation Internal Improvement Bonds, Series 2012-A General Obligation Refunding Bonds, Series 2012-B General Obligation Taxable Improvement Bonds, Series 2013-A General Obligation Internal Improvement Bonds, Series 2013-B General Obligation Internal Improvement Bonds, Series 2014-A General Obligation Refunding & Internal Improvement Bonds, Series 2015-A General Obligation Internal Improvement Bonds, Series 2016-A General Obligation Refunding Bonds, Series 2016-B General Obligation Internal Improvement Bonds, Series 2017-A General Obligation Internal Improvement Bonds, Series 2018-A Dated Date 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-26-16 07-26-16 07-27-17 11-27-18 Temporary Notes (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Temporary Notes, Series 2018-2 Dated Date 11-27-18 Revenue Bonds (Base CUSIP No.: 794811) Description of Indebtedness Water and Sewage System Revenue Bonds, Series 2011 S-1 Dated Date 04-15-11 Final Maturitv 07-01-28 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 Final Maturity 11-15-19 Final Maturity I 0-01-31 EXHIBIT A OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The Operating Data in the sections and tables contained in the most recent Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) generally described as follows: Operating Data for General Obligation Bonds, Temporary Notes, Lease Obligations Financial Overview Tax Levies Assessed Valuation Estimated Actual Valuation Tax Collections Largest Taxpayers Operating Data for Revenue Bonds User Characteristics (number of users; percentage split between residential and other customers) Largest Users (top ten; name; business type; total cf billed; total dollars billed) User Trends (gallons of water metered; gallons of sewage treated; average number of customers) Current Water Rate Structures Current Sewage Rate Structure Historical and Projected Financials (but only updating historical financials) Outstanding System Indebtedness (Net Income, Debt Service, Bond Coverage, Additional Utility Debt Payments) Additionally, for obligations issued on or before November 1, 2018, the Issuer shall provide updates as of the end of the Fiscal Year for any material adverse changes in the portions of the final Official Statement concerning Property Valuations and Pension and Employee Retirement Plans. A-1 EXHIBITB NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series L_J, dated as of[Bonds Dated Date] Name of Obligated Person: City of Salina, Kansas Date of Issuance: [Bonds Closing Date] NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as required by the Issuer's Omnibus Continuing Disclosure Undertaking. The Issuer anticipates that the Annual Report will be filed by ------ CITY OF SALINA, KANSAS Dissemination Agent cc: City of Salina, Kansas B-1 EXHIBITC ACCEPTANCE OF DISSEMINATION AGENT Name of Issuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series [_], dated as of [Bonds Dated Date] Dissemination Agent: Notice Address of Dissemination Agent: ___________ , having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Disclosure Undertaking, to which this acceptance is attached, accepts such duties and responsibilities set forth therein. Dated: C-1 APPENDIX C December 31, 2017 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2017, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31 , 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal Organizational Chart List of Principal Officials FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i -iv v vi 1 -3 4 -15 16 17 18 19 20 21 22 23 24 25 26 27 28 -29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Schedule of Funding Progress and Schedule of Employer Contributions KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement City Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -67 68 69 69 70 -71 72 73 74-75 76-77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31 , 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds Net Position by Component -Last Ten Years Changes in Net Position -Last Ten Years STATISTICAL SECTION Fund Balances, Governmental Fund -Last Ten Years Changes in Fund Balances, Governmental Funds -Last Ten Years Tax Revenues by Source, Governmental Funds -Last Ten Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Years Direct and Overlapping Property Tax Rates -Last Ten Years Principal Property Tax Payers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 95 96 97 98 -99 100 101 102 Schedule 103 2 104 3 105 4 106 5 107 6 108 7 109 8 110 9 111 10 112 11 113 12 114 13 115 14 116 15 117 16 118 17 119 18 120 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 October 12, 2018 City of ~ 5alina To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31 , 2017, is hereby submitted. The City's Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City's accounting system and budgetary controls, and a brief discussion of the City's economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor's report, Management's discussion & analysis, Government wide financial statements. Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management's Discussion and Analysis (MD&A) which immediately follows the independent auditor's report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City's comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is 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 exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2017 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to insure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921 . The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 47,336. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City .. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola. Exide Technologies, Blue Philips Lighting Company, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2017. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2017 as compared to 2016. In July of 2017, the Salina Field House was opened for business. Other major projects that were on going, included reconstruction on Country Club Road. South Well Field improvements, continued improvements to ii the water distribution system and preliminary design on the Smoky Hill River Renewal and Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2% were implemented in 2017. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of "routine" capital-including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: * 2018 2019 2020 2021 2022 Sales tax $ 8,260,500 $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 3,895,000 Water & wastewater fund 1,776,101 General obligation bonds 4,500,000 6,135,000 25,000,000 Revenue bonds 38,250,000 4,000,000 5,850,000 32,000,000 4,000,000 Other sources 7,810,000 750,000 $ 60,596,601 $ 15,265,000 $35,235,000 $36,390,000 $ 7,895,000 *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design , acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11 . Insure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). iii Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Mize Houser auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. iv CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rose Hodges Mike Hoppock Joe Hay Interim City Manager Michael Schrage I Municipal Court I I .... .............. .............. .............. ··········-·········· . ....................... I Legal Services I I Clark Mize & Linville Chartered* Risk Management I Greg Bengtson Deputy City Manager Michael Schrage I Development Services I I Lauren Driscoll I Continuous Process Improvement Scott Gardner Building Services Neighborhood Services Planning & Zoning Community Relations I I I I I I Parks & Recreation Public Works I Utilities I I Finance/ Administration Fire I Police I Chris Cotten Jim Kowach Martha Tasker Debbie Pack Kevin Royse Brad Nelson I I I I I I / ""\ /' ' / ""\ , ' Parks Division Engineering Water Plant Division City Clerk Fire Administration Administration Recreation Division Public Services Wastewater Plant Water Customer Fire Suppression Patrol Division Golf Course Streets Division Accounting Fire Prevention Support Division Facility Maintenance Traffic Control Utility Division Finance EMS Investigative Animal Services Flood Control Water Distribution Division *Tony's Event Center Sanitation Wastewater ' ./ '-Solid Waste Collection Central Garage '-.) '-./ I I I Computer Technology I Arts & Humanities Human Resources Jack Rolfs Brad Anderson Natalie Fischer [Smoky Hill Museum v City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Hodges, Commissioner Joe Hay, Jr, Commissioner City Executive Staff Michael Schrage, Interim City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities vi FINANCIAL SECTION Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 6% and 0%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $47, 156,349 as of December 31 , 2017 and total revenues of $5,559,861 for the year then ended, and the Housing Authority of the City of Salina wh ich statements reflect total assets and deferred outflows of resources of $7,613,952 as of June 30, 2017 and total revenues of $2,623,955 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina is based solely on the reports of the other auditors. www.mizehouser.com • mhco@mizehouser.com 534 S Kansas Ave. Suite 700 •Topeka. KS 66603-3465 • 785.233.0536 p • 785.233.1078 I 534 S Kansas Ave. Suite 400 •Topeka. KS 66603-3454 • 785.234.5573 p • 785.234.1037 I 7101 College Blvd. Suite 900 •Overland Park, KS 66210-1984 • 913.451.1882 p • 913.451.2211 I 211 E Eighth Suite A• Lawrence, KS 66044-2nl • 785.842.8844 p • 785.842. 9049 I 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31 , 2017, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention , Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15 and the schedules of funding progress on page 68, the schedule of the City's proportionate share of the net pension liability on page 69 and the schedule of City contributions on page 69 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 2 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas October 12, 2018 {JIJ 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2017. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City's financial condition. Financial Highlights • On an accrual basis, the City's government-wide net position increased $9.4 million from current operations with net position increases of $7.8 million and $1.6 million in governmental activities and business-type activities, respectively. • At the close of 2017, the City's governmental funds reported combined ending fund balances of $21 .8 million, an increase of $5.1 million from the prior year. This primarily resulted from issuance of general obligation bonds in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance increased $1 .9 million over the prior year. • At the close of 2017, the City's enterprise funds reported a combined ending Net Position of $89.1 million, an increase of $1.5 million over prior year. Positive performance was shared by all enterprise funds, with the Water and Sewer Fund providing the bulk of the change ($.9 million). • Revenues from governmental funds decreased $.6 million from the prior year and revenues from business type funds increased $1 .1 million from the prior year. • Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader's understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City's operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City's assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City's overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City's financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an "Other Governmental Funds" column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve, and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund's budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City's operations and economy. 5 The City as a Whole CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($36.8 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $1.1 million (3%) from the prior year with the solid waste disposal fund increasing $370K (13.24%) and water and sewer fund increasing $533K (3%). The increase in charges for services in the solid waste disposal fund is a result an increase in disposal fees of 3.5%, as well as well as a large one time customer, while the increase in the water and sewer fund is a result of an increase in water and wastewater fees by 3%. Sa/es taxes are the next largest component of the revenue mix, providing 25.5% ($21.7 million) of the total revenues. The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1 % sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31 , 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 13.6% ($11.6 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by .5%. The total City mill levy decreased 1.06%. The overlapping levy decreased in 2017 by .63%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $11.1 million from its peak of $39.7 million in 2007. At the 2017 tax rate, this exemption is equivalent to over $760K in annual lost revenue. Motor vehicle value decreased 1.66%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year 2017 WQ Real Estate and Personal Property Assessed Valuation $ 422,364,328 $ 420,849,599 City Mill Levy($ per $1 ,000) Operating (General Fund) 21.694 19.95 Debt Service 5.909 7.361 Total City Rate 27.603 27.311 Total Overlapping Levy 134.153 134.999 Percent of Total Taxes Collected 99.9% 93.5% Ratio of Total Taxes (including delinquent collections) to taxes levied 101.7% 95.5% Motor Vehicle Valuation $ 50,970,796 $ 51 ,833,505 ~ $ 1,514,729 1.744 (1.452) 0.292 (0.846) 6.4% 6.2% $ (862,709) The unemployment rate in Salina decreased slightly from 3.3% at the end of 2016 to 2.7% at the end of 2017, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force stayed at 27,684. In 2017, the top ten property taxpayers accounted for 14.24% of total assessed value. This is less concentrated than ten years ago (at 15.48%). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $212.8 million at December 31 , 2017. This represents an increase in net assets of $9.4 million over 2016. A comparative Condensed Statement of Net Position at December 31, 2017 and 2016: 7 Cash and investments Other current assets Noncurrent (capital) assets Total assets Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities Noncurrent liabilities Total liabilities Total deferred inflows of resources Net position: Net investment in capital assets Restricted for permanent funds Restricted for debt service Unrestricted Total net position Percent of total net position Cash and investments as a percentage of current liabilities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-T~~e Activities $ 2017 24,491 13,836 206,600 244 927 5,968 250,895 12,540 102,076 114 616 12,578 129,921 502 1,510 (8,232) 123 701 58% 195% $ 2016 26,873 $ 13,990 197 122 237,985 6,681 244,666 17,370 98,158 115 528 13,270 124,635 489 1,249 (10,505) 115 868 57% 155% 2017 2016 2017 30,336 $ 29,505 $ 54,827 2,338 2,213 16,174 91,306 90,784 297 906 123 980 122,502 368,907 887 878 6 855 124,867 123,380 375,762 3,879 3,598 16,419 31 ,685 32 020 133,761 35 564 35 618 150 180 220 202 12,798 63,316 62,427 193,237 502 1,512 1,512 3,022 24 255 23 621 16 023 89 083 87 560 212 784 42% 43% 100% 782% 820% 334% Total Prima!}: Government %of %of Total 2016 Total 15% $ 56,378 16% 4% 16,203 4% fil2. 287,906 fillli 100% 360 487 100% ~ 7 559 100% 368,046 11% 20,968 14% ~ 130,178 ~ 100% 151 146 100% 13,472 91% 187,062 92% 0% 489 0% 1% 2,761 1% ft.% 13 116 2%. 100% 203,428 ~ 100% 269% $ 2017-2016 change (1,551) (29) 10 000 8 420 (704) 7,716 (4,549) 3,583 (966) (674) 6,175 13 261 2 907 9 356 The largest segment of the City's net position reflects its investment in capital assets (land, buildings, streets and drainage facilities. utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City's obligations to citizens and creditors. In 2017, the amount of net investment in capital assets increased by $6.2 million. Amount restricted for debt service increased by $261 thousand. Outside of the increase in net investment in capital assets and the increase of restricted for debt service, 2017 resulted in a $2.9 million increase to the net position. Total liabilities decreased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities and non-current liabilities decreased primarily due to a reduction in temporary notes and an increase in general obligation bonds. 8 Statement of Activities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 A Condensed Statement of Activities is shown below. Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions General Revenues: Property Taxes Sales Taxes Other Taxes Investment Revenue Other Miscellaneous Total Revenues: Expenses: General Government Public Safety Public \M:>rks Public Health and Sanitation Culture and Recreation Planning and Development So lid Waste Disposal water and Sewer Sanitation Golf Course Interest on Long Term Debt Total Expenses Increase in net assets before transfers Transfers and other extraordinary items Change in Net Position Net Position January 1 Prior Period Adjustment Net Position January\ restated Net Position December 31 Condensed Statement of Activities For the Year Ended December 31 Governmental Activities 2017 20'6 $ 'Kl,'KJO $ 'Kl,085 4,541 12,960 21,738 6,899 93 4,332 734 12,588 17,682 7,991 148 ~~ 58,334 ~ 9,781 23, 120 'Kl,345 1,126 6,880 1.835 9,138 22,232 9,773 1,095 6,612 2,047 ~~ ~~ 3,523 5,483 ~~ ~~ 115,869 115,869 1>6,704 82 1>6,786 B usiness-Twe Activities 2017 2016 $ 26,703 $ 25,657 129 78 1>3 79 2,364 15,650 2, 178 852 5,891 2,335 14,807 2,043 792 5,837 (4,367) ~~ ~~ 87,559 87,559 85,229 74 85,303 Total Primary Government 2017-20'6 2017 % ~~ Change $ 36,803 43% $ 35,742 42% $ 1,061 209 4,541 5% 0% 12,960 15% 21,738 25% 6,899 8% 0% 9,781 13% 23,120 30% 'Kl,345 14% 1,126 1% 6,880 9% 1,835 2% 2,364 3% 15,650 21% 2,178 3% 852 1% 9.414 203,428 203,428 $ 212,784 4,332 734 5% 1'/o 12,588 15% 17,682 21'/o 7,991 9% 226 0% 9, 138 12% 22,232 30% 9,773 13% 1.095 1'/o 6,612 9% 2,047 3% 2,335 3% 14,807 20% 2,043 3% 792 1'/o (734) 372 4,056 (1,092) (4) 54 593 888 572 31 268 (212) 29 843 135 60 4%~) 11,320 19 191.933 156 192,089 $ 203,428 1,906 ----1!J..) ~ 11,495 ~) 11,339 $ 13,'68 Governmental Activities. Charges for services attributable to governmental activities totaled $10.1 million and operating grants for those purposes were $4.5 million. Both of these revenue streams increased slightly from the prior year. The balance was funded by general revenues. Sales taxes accounted for $21.7 million of general revenues, with property taxes providing $12.9 million. The net position increased by $7.8 million as a result of governmental activities. This increase was primarily related to the increase in sales tax as a result of the collection of two months of sales tax with the new special purpose sales tax rate. Total expenses for governmental activities for the year ending December 31, 2017 were $54.8 million compared to $53.9 million in 2016. Governmental activities represent 72% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% of the total. 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $21 million, or 27% of the City's total expenses. The majority of this expense ($15.6 million) is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position decreased by $1.5 million. This decrease was primarily related to the increase in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31 , 2017 and December 31, 2016. Gowrnmental Fund Balances as of December 31 , (in OOO's) Fund 2017 2016 Change General $ 6,883 $ 5,032 $ 1,851 Tourism and Com.ention 213 183 30 Special Gas 1,082 812 270 Sales Tax Capital 2,084 1,667 417 Schilling Capital lmprowment 3,024 4,061 (1 ,037) Debt Service 1,510 1,249 261 Capital Projects 895 (6,823) 7,718 SFH QalicB 1, 715 6,811 (5,096) Other Gowrnmental Funds 4,353 3,685 668 $21 ,759 $ 16,677 $ 5,082 Total governmental fund balances increased by $5.1 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund increase was largely the result of the issuance of general obligation bonds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31 , 2017 and 2016. Consolidated Statement of Rewnues and Expenditures for Major Gowrnmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2017 Rewnues (Including Other Financing Sources) General $ 41,864 $ Tourism and Com.ention 1,685 Special Gas 1,598 Sales Tax Capital 8,265 Schilling Capital lmprowment 12 Debt Sen.1ce 6,659 Capital Projects 12, 125 SFH QalicB 248 Other Gowrnmental Funds 4,067 Total Rewnues 76,523 Less Other Sources (19,924) Rewnues, net of other sources $ 56,599 $ Expenditures (Including Other Finacing Uses) General $ 40,013 $ Tourism and Conwntion 1,655 Special Gas 1,328 Sales Tax Capital 7,848 Schilling Capital Improvement 1,049 Debt Sen.1ce 6,398 Capital Projects 4,407 SFH QalicB 5,344 Other Gowrnmental Funds 3,399 Total Expenditures 71 ,441 Less Other Uses (4,160) Expenditures, net of other uses $ 67,281 $ 2016 Change 40,081 $ 1,783 1,643 42 1,570 28 4,439 3,826 10 2 20 ,228 (13,569) 16,432 (4,307) 12,573 (12,325) 4,119 (52) 101 ,095 (24,572) (43,876) 23,952 57,219 $ (620) 39,889 $ 124 1,624 31 1,396 (68) 4,392 3,456 1,484 (435) 19,724 (13,326) 12,718 (8,311) 5,762 (418) 3,838 (439) 90,827 (19,386) (3,971) (189) 86,856 $ (19,575) Total revenues, including other sources, were down $24.6 million compared to 2016. The largest components of this change were a $13.6 million decrease in Debt Service Fund primarily resulting from decreased bond proceeds and a $12.3 million decrease in the SFH QalicB Fund primarily resulting from a decrease in bond proceeds. Expenditures decreased in most every fund. The Sales Tax Capital Fund expenditures increased as a result the ability of the city to expend additional revenues generated by the newly approved special purpose sales tax. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: Corrparative Sumnary Staterrent of f\let Position as of Decent>er 31 (in $000's) Solid Waste Disposal Water and Sew er 2017 2016 Change 2017 2016 Change Current Assets $ 6,709 $ 5,886 $ 823 $ 24,014 $ 24,445 $ (431) Capital Assets 3,196 4,047 (851) 86,888 85,444 1,444 Deferred Outflows 79 72 7 676 675 Total Assets and deferred outflows $ 9,984 $ 10,005 $ (21) $ 111,578 $ 110,564 $ 1,014 Current Liabilities $ 445 $ 442 $ 3 $ 3,299 $ 3,043 $ 256 Noncurrent Liabilities 3,272 3,605 (333) 27,440 27,554 (114) Deferred Inflows 30 26 4 143 129 14 Total Liabilities $ 3,747 $ 4,073 $ (326) $ 30,882 $ 30,726 $ 156 Net investrrent in capital assets $ 2,041 $ 2,527 $ (486) $ 60,053 $ 66,038 $ (5,985) Restricted 1,512 1,512 Unrestricted 4,196 3,405 791 19, 131 12,288 6,843 Total Net Position $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 t,;urrent Assets as a percentage ot current liabilities 1508% 1332% 728% 803% Sanitation Golf Course 2017 2016 Change 2017 2016 Change Current Assets $ 1,787 $ 1,250 $ 537 $ 164 $ 136 $ 28 Capital Assets 826 894 (68) 395 399 (4) Deferred Outflows 102 100 2 32 31 Total Assets $ 2,715 $ 2,244 $ 471 $ 591 $ 566 $ 25 Current Liabilities $ 87 $ 75 $ 12 $ 48 $ 38 $ 10 Noncurrent Liabilities 733 613 120 240 248 (8) Deferred Inflows 38 36 2 11 11 Total Liabilities $ 858 $ 724 $ 134 $ 299 $ 297 $ 2 f\let investrrent in capital assets $ 826 $ 894 $ (68) $ 395 $ 399 $ (4) Restricted Unrestricted 1,031 626 405 (103) (130) 27 Total Net Position $ 1,857 $ 1,520 $ 337 $ 292 $ 269 $ 23 Current Assets as a percentage of current liabilities 2054% 1667% 342% 358% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. Corrparative Sunmary of Revenues, Expenses and Oianges in Net R:>sition for the Year 8lded Decerrber 31 (In $000's) Solid Waste Dsposal Water and Sew er 2017 2016 Change 2017 2016 Change Operating Revenues $ 3,185 $ 2,816 $ 369 $ 19,861 $ 19,328 $ 533 Operating Expenses 2,320 2,312 8 14,721 13,982 739 Operating kicorre 865 504 361 5,140 5,346 (206) Non-operating revenues (expenses) (20) (8) (12) (832) (764) (68) lncorre (Loss) before Transfers 845 496 349 4,308 4,582 (274) Transfers in (out) (540) (640) 100 (3,450) (2,450) (1 ,000) Change in Net R:>sition 305 (144) 449 858 2,132 (1,274) Net Position January 1 5,932 6,067 (135) 79,838 77,649 2,189 Res taterrent 9 (9) 57 (57) Net Position January 1, restated 5,932 6,076 (144) 79,838 77,706 2,132 Net Position Decerrber 31 $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 Sanitation Golf Course 2017 2016 Change 2017 2016 Change Operating Revenues $ 2,886 $ 2,751 $ 135 $ 876 $ 840 $ 36 Operating Expenses 2,178 2,092 86 852 788 64 Operating kicorre 708 659 49 24 52 (28) Non-operating revenues (expenses) 6 52 (46) (4) 4 lncorre (Loss) before Transfers 714 711 3 24 48 (24) Transfers in (out) (377) (492) 115 Change in Net Position 337 219 118 24 48 (24) Net Position January 1 1,520 1,296 224 268 217 51 Restaterrent 5 (5) 3 (3) Net Position January 1, restated 1,520 1,301 219 268 220 48 Net Position Decerrber 31 $ 1,857 $ 1,520 $ 337 $ 292 $ 268 $ 24 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system , in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2017. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31 , 2017 was $297 ,905,515 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31 , 2017 and 2016: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Go\.ernmental Acti"1ty Acti"1ty 2017 2016 2017 Equipment, Furniture and Fixtures $ 2,040 $ 1, 190 $ 1,484 Vehicles 3,521 3, 148 1,041 Buildings and lmpro\.ements 33,079 24,857 9,362 Land 24 ,093 24,002 1,542 Infrastructure 114,958 113,114 75,727 Construction in Progress 28 ,909 30,811 2,150 Total $ 206,600 $197, 122 $ 91 ,306 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Net Additions Changes to Capital Assets, 2017 (in OOO's) Go1.-ernmental Business-Type Acti"1ty Acti"1ty $ 26,318 $ 22,846 (11 , 129) (18,014) (5,711) (4,311) $ 9,478 $ 521 2016 $ 1,692 1, 161 9,783 1,542 60,879 15,728 $ 90,785 Total $ 49, 164 (29, 143) (10,022) $ 9,999 Total 2017 2016 $ 3,524 $ 2,882 4,562 4,309 42,441 34,640 25,635 25,544 190,685 173,993 31 ,059 46,539 $ 297,906 $ 287,907 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2017 The City's general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion , with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31 , 2017 totaled $55,994,305. In addition, there were temporary notes outstanding in the amount of $6,811 ,742, as well as a financing lease in the amount of $157,868. Business-type activities had $12,606,747 in revenue bonds outstanding, as well as $6,520,433 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $8,862,810. The City engaged in the following debt transactions during 2017: • On July 21st, the City issued 2017A, $9,310,000 of improvement bonds. The proceeds were used to finance construction of the Bicentennial Center, Country Club road, and fund preliminary design costs for the Smoky Hill River Renewal. • On July 21st, the City issued $2,180,000 in temporary notes to finance construction of Downtown Streetscape, Grand Prairie Addition Phase II and the Police Training Facility. This note will be refinanced into a long term bond issue in August 2018. Additional information on the City's debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City's finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401 . 15 BASIC FINANCIAL STATEMENTS CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31 , 2017 Prima~ Government Total Total Governmental Business-type Activities Activities ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Restricted cash and investments Prepaid expenses Total current assets Noncurrent assets: Capital assets, nondepreciable Construction in progress Land Capital assets. depreciable Less: Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources: Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outflows of resources Total assets and deferred outflows of resources Liabilities: Current liabilities: Accounts payable Retainage payable Accrued liabilities Accrued interest payable Deposits payable Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of financing leases payable Current portion of special assessment debt payable Current portion of general obligation bonds payable Total current liabilities Noncurrent liabilities: Accrued liabilities Compensated absences Security deposits returnable Net OPEB obligation Net pension liability Temporary notes payable Loans payable Revenue bonds payable Special assessment debt payable General obligation bonds payable Landfill post-closure care liabilities Total noncurrent liabilities Total liabilities Deferred inflows of resources: Unavailable revenue -property taxes Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources Net Position Net investment in capital assets Restricied for: Permanent funds: Expendable Debt service Unrestricted Total net position 22,490,234 $ 30,335,879 1,791,556 1,902,943 11,708,927 16,726 16 318,107 435,252 2,001,589 38,327, 139 32,674,090 28,909,568 2,149.789 24,092,859 1,541.806 269,325,527 151,065,494 115,728,000 63,451 ,528 206,599,954 91 ,305.561 244,927,093 123,979,651 5,841,010 651 ,365 127,336 236,123 5,968,346 887,488 $ 250,895,439 $ 124,867, 139 1,764,815 588,035 604,811 10,681 572,832 182,225 236,626 176,114 1,499,345 344,215 2,196,742 571 .773 708,696 157,868 5,561,280 1,242,407 12,539,918 3 878,547 44,772 1,298,613 298, 132 4,548,909 604,645 28,966,518 3,333.610 4,615,000 12,171,090 8,291,037 11.898,051 50,433,025 5.278.026 1,981,498 102,077,927 31,684,999 114,617,845 35,563.546 11,165,043 1,411,701 220,777 12,576,744 220.777 $ 127,194,589 35,784,323 $ 129,921 ,343 63,315,571 501 ,693 1,509,863 1,512.125 (8,232,049] 24,255,120 $ 123,700,850 89,082,816 The notes to the basic financial statements are an integral part of this statement. 16 Comeonent Units Total Salina Salina Primary Housing Airport Government Authoritl Authoritl 52,826.113 1.962,074 1,613,791 3,694.499 18,369 266,634 11 ,708,927 16,742 753,359 30,763 2,001 ,589 146,622 39,652 8,838 71,001 ,229 2,197,480 1,889,263 31,059,357 148,719 3,010,444 25,634,665 1,454,559 9,888,105 420,391,021 8,299,346 72,676,151 179.179,528 4,571,879 41 ,804,269 297,905,515 5,330,745 43,770,431 368,906,744 7,528,225 45,659,694 6,492,375 85,727 105,185 363,459 1.391 ,470 6,855,834 85,727 1,496,655 $ 375,762,578 7,613,952 47,156,349 2,352,850 38,686 158,295 615,492 572,832 37,118 92,466 418,851 270,898 176,114 92,027 1,843,560 3.176 2,196,742 571,773 708,696 157,868 2,153 6,803,687 1,220,000 16,418,465 171,007 1,743,812 44,772 38,412 1,596,745 28,576 49,347 5,153,554 32,300,128 373,407 603,456 4,615,000 20,462,127 11 ,898,051 7,054 55,711,051 22,787,515 1,981 498 133,762,926 440,395 23,447,372 150,181,391 611 ,402 25,191,184 11 ,165,043 10,742 60,495 1,632,478 15,329 96,486 12,797,521 26,071 156,981 $ 162,978,912 637,473 25.348,165 $ 193,236,914 5,330,745 19,753,708 501 ,693 14,718 3,021 ,988 16,023,071 1,631 ,016 2,054 476 $ 212,783,666 6,976,479 21 ,808,184 Governmental activities: General government Public safety Publicworl<s Public health and sanitation Culture and recreation Planning and development Interest on long-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitation Goff Course Total business-type activities Total primary government Component units: Salina Housing Authority Salina Airport Authority Total component units CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Net [Expenses] Revenue and Changes in Net Position Program Revenues Primary Government Operating Capital Total Total Charges for Grants and Grants and Governmental Business-type E~enses Services Contributions Contributions Activities Activities $ 9,779,656 $ 3,470,076 $ 824,116 $ $ [5,485,464] $ 23, 120,215 4,600,899 1,147,371 [17,371,945] 10,345,513 347,672 1,934,805 [8,063,036] 1,126,249 49,966 277,255 [799,028] 6,880,276 1,540,620 213,229 [5.126,427] 1,834,917 91,013 144,615 [1,599,289] 1,724,439 [1 ,724,439) 54,811 ,265 10,100,246 4,541,391 [40,169,628) 2,364,863 3,164,761 799,898 15,650,277 19,855,033 4,204,756 2,177,632 2,884,526 706,894 852,260 798,368 [53,892) 21 ,045,032 26,702,688 5,657,656 $ 75,856,297 $36,802,934 $ 4,541,391 $ [40, 169,628) 5,657,656 $ 2,661 ,191 $ 384,749 $ 2,124,815 $ 100,059 5,474,912 2,213,300 1,280,204 $ 8,136,103 $ 2,598,049 $ 2,124,815 $ 1,380,263 General Revenues: Property taxes levied for General purposes 9,100,808 Debt service 2,486,666 Motor vehicle tax General purposes 1,372,532 Sales tax General purposes 12,906,032 Selective purposes 8,832,312 Other taxes General purposes 6,899,586 Investment revenues 92,820 129,144 Miscellaneous 2,002,864 103,082 Transfers, net 4,308,834 [4,366,500) Subtotal general revenues 48,002,454 [4, 134,274) Change in net position 7,832,826 1,523,382 Net position -beginning 115,868,024 87,559,434 Net position -ending $ 123,700,850 $ 89,082,816 The notes to the basic financial statements are an integral part of this statement. 17 Total Primary Government $ [5,485,464] [17,371,945] [8,063,036] [799,028] [5, 126,427] [1,599,289] [1,724,439) [40,169,628) 799,898 4,204,756 706,894 [53,892) 5,657,656 [34,511 ,972) 9,100,808 2,486,666 1,372,532 12,906,032 8,832,312 6,899,586 221,964 2, 105,946 [57,666) 43,868,180 9,356,208 203,427,458 $212,783,666 $ $ Component Units Salina Salina Housing Airport Aulhori!}'. Authori!}'. $ [51 ,568] [1,981,408) [51 ,568) [1,981,408) 2,043,302 8,835 974 5,497 22,081 14,332 2,066,357 [37,236] 84,949 7,013,715 21,723,235 6,976,479 $21,808,184 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS 43100 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,853,666 $ 847 $ 802,597 $ 2,265,055 Restricted cash Receivables (net) Accounts 1,257,980 476,551 Taxes 8,864,737 322,888 Interest 16,726 Inventory 152,982 Due from other funds 27,854 Total assets $ 16,173,945 $ 477,398 $ 1, 125,485 $ 2,265,055 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 600,386 $ 263,937 $ 43,187 $ 17,775 Retainage payable 163,666 Due to other funds Total liabilities 600,386 263,937 43,187 181,441 Deferred inflows of resources Unavailable revenue -property taxes 8,691 ,050 Total deferred inflows of resources 8,691 ,050 Fund balance: Non spendable 152,982 Restricted 213,461 1,072,347 Committed 1,658,876 Assigned 214,010 9,951 424,738 Unassigned 6,515,517 Total fund balances 6,882,509 213,461 1,082 ,298 2,083,614 Total liabilities, deferred inflows of resources and fund balances $ 16,173,945 $ 477,398 $ 1,125,485 $ 2,265,055 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ 3,024,578 $ 3,024,578 $ -$ 2,817,807 206,771 3,024,578 1,462,554 $ 1,483,544 $ 54,161 2,521 ,302 9,656 3,983,856 $ 1,547,361 $ -$ 560,602 $ 2,473,993 2,473,993 1,509,863 1,509,863 91 ,642 652,244 895, 117 895, 117 6,896 $ 2,001 ,589 123,914 2,132,399 $ 58,284 $ 349,503 9,656 417,443 1,714,956 1,714,956 4,540,664 $ 19,440,401 2,001,589 2,864 1,915,470 11,708,927 16,726 152,982 37,510 4,543,528 $ 35,273,605 162,754 $ 1,706,925 604,811 27,854 37 ,510 190,608 2,349,246 11,165,043 11,165,043 152,982 1,395,051 4,190,722 2,985,723 10,072,479 855,470 [27,854] 6,487,663 4,352,920 21 ,759,316 $ 3,024,578 $ 3,983,856 $ 1,547,361 $ 2, 132,399 $ 4,543,528 $ 35,273,605 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2017 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported an a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPEB obligation Net pension liability Temporary notes payable Bonds payable Financing leases payable Loans payable 322, 143,628 115,567,034 2,744,388 4,548,909 28,800,959 6,811 ,742 55,994,305 157,868 12,171 ,090 $ 21 ,759,316 127,336 206,576,594 5,809,770 (1 ,400,363] (123,914] 2,363,597 Accrued interest on the bonds 182,225 (111,411,486] Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 123,700,850 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31 , 2017 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,943,754 $ -$ -$ Delinquent taxes 157,054 Motor vehicle taxes 1,014,976 General sales taxes 12,906,032 Selective sales taxes 8,251 ,546 Other taxes 5,215,264 1,684,322 Intergovernmental 1,133,310 1,435,167 Special assessments Licenses and permits Charges for services 6,153,450 Investment revenue 3,336 480 2,777 13,381 Donations Miscellaneous 1,709,491 Total revenues 37,236,667 1,684,802 1,437,944 8,264,927 EXPENDITURES: Current General government 5,423,241 Public safety 21 ,628,730 Public works 5,328,315 495,919 Public health and sanitation 749,656 Culture and recreation 4,424,221 Planning and development 752,825 930,916 Miscellaneous Capital outlay 896,026 831 ,852 5,280,012 Debt service Principal retirement Interest and other charges Total expenditures 39,203,014 930,916 1,327,771 5,280,012 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses] [1 ,966,347) 753,886 110,173 2,984,915 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Transfers in 4,626,500 160,000 Transfers [out] [810,000J [723,942) [2 ,568,350) Total other financing sources [uses] 3,816,500 [723,942) 160,000 [2,568,350) Net change in fund balance 1,850,153 29,944 270, 173 416,565 Fund balance -Beginning of year 5,032,356 183,517 812,125 1,667,049 Fund balance -End of year $ 6,882,509 $ 213,461 $ 1,082,298 $ 2,083,614 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,433,770 $ -$ -$ -$ 11 ,377,524 52,896 209,950 357,556 1,372,532 12,906,032 580,766 8,832,312 6,899,586 494,337 1,473,276 4,536,090 1,538,904 1,538,904 5,300 5,300 246,458 480,385 6,880,293 12,794 17, 104 1,104 28,178 79,154 110,606 110,606 63,818 77,763 1,851 ,072 12,794 4,400,230 558,155 247,562 2,756,274 56,599,355 5,423,241 21 ,628,730 223,912 6,048,146 347,442 1,097,098 1,718,877 6,143,098 31 ,081 86,832 1,801 ,654 35 35 1,049,381 4,210,392 5,262,024 751 ,068 18,280,755 4,907,918 180,000 5,087,918 1,490,423 139,036 50,486 90,935 1,770,880 1,049,381 6,398,341 4,349,428 5,343,591 3,399, 101 67,281 ,555 [1 ,036,587] [1 ,998, 111] [3,791,273] [5,096,029] [642,827] [10,682,200] 1,000 9,309,000 9,310,000 2, 180,000 2,180,000 16,751 78 ,361 95,112 2,241 ,309 1,310,983 8,338,792 [57,666] [4, 159,958] 2,259,060 11,509,695 1,310,983 15,763,946 [1 ,036,587] 260,949 7,718,422 [5,096,029] 668, 156 5,081 ,746 4,061 ,165 1,248,914 [6,823,305] 6,810,985 3,684,764 16,677,570 $ 3,024,578 $ 1,509,863 $ 895,117 $ 1,714,956 $ 4,352,920 $ 21 ,759,316 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31 , 2017 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds , but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the (151 ,301] 15,709,428 (6,066,797] $ 5,081,746 9,491,330 46,441 285,664 (123,914] 30,943 [723,482] treatment of long-term debt and related items. [11,476,527] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities. 5,220,625 Changes In Net Position of Governmental Activities $ 7,832,826 The notes to the basic financial statements are an integral part of this statement. 21 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 8,943,754 $ 9,075,239 $ 9,075,239 Delinquent taxes 157,054 125,000 125,000 Motor vehicle taxes 1,016,439 991 ,987 991 ,987 General sales tax 12,906,032 12,805,000 12,805,000 Other taxes 5,215,264 6,804,632 6,804,632 Intergovernmental 1, 133,310 1, 145,000 1,145,000 Charges for services 5,481 ,314 6,025,327 6,025,327 Investment revenue 11 ,540 Miscellaneous 1,709,490 183,739 183,739 Total revenues 36,574, 197 37, 155,924 37, 155,924 Expenditures General government 4,967,756 3,405,885 3,405,885 Public safety 21 ,750,244 20,726,693 20,726,693 Public works 5,337,833 5,790, 152 5,790, 152 Public health and sanitation 749,656 Culture and recreation 4,426,706 5,283,377 5,283,377 Planning and development 752,825 2,213,740 2,213,740 Capital outlay 951,921 4,259,262 4,259,262 Total expenditures 38,936,941 41 ,679,109 41 ,679, 109 Excess [deficiency] of revenues over [under] expenditures [2,362,744) [4,523,185) [4,523, 185) Other financing sources [uses] Transfers in 4,626,500 4,675,089 4,675,089 Transfers [out] [810,000) [3,661 , 132) [3,661, 132) Total other financing sources [uses] 3,816,500 1,013,957 1,013,957 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,453,756 [3,509,228] [3,509,228] Unreserved fund balance, January 1 3,509,762 3,509,228 3,509,228 Prior year cancelled encumbrances 103,606 Unreserved fund balance, December 31 5,067, 124 $ -$ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 16,726 1,257,980 8,864,737 152,982 [8,691 ,050] 214,010 $ 6,882,509 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative] $ [131,485] 32,054 24,452 101 ,032 [1,589,368] [11 ,690] [544,013] 11 ,540 1,525,751 [581 ,727) [1 ,561 ,871] [1 ,023,551] 452,319 [749,656] 856,671 1,460,915 3,307,341 2,742,168 2, 160,441 [48,589] 2,851 , 132 2,802,543 4,962,984 534 103,606 $ 5,067,124 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Other taxes $ 1,616,808 $ 1,608,000 $ 1,658,000 Investment revenue 480 Total revenues 1,617,288 1,608,000 1,658,000 Expenditures Planning and development 930,916 893,000 893,000 Total expenditures 930,916 893,000 893,000 Excess [deficiency] of revenues over [under] expenditures 686,372 715,000 765,000 Other financing sources [uses] Transfers [out] [723,942] [683,800] [733,800] Total other financing sources [uses] [723,942] [683,800] [733,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [37,570] 31,200 31 ,200 Unreserved fund balance, January 1 [225,520] 80,343 368 Unreserved fund balance, December 31 [263,090] $ 111,543 $ 31,568 Reconciliation to GAAP Accounts receivable 476,551 GAAP Fund Balance, December 31 $ 213,461 See independent auditor's report on the financial statements. 23 Variance with Final Budget Positive [Negative] $ [41,192] 480 [40,712] [37,916] [37,916] [78,628] 9,858 9,858 [68,770] [225,888] $ [294,658] CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 1,435,031 $ 1,370,400 $ Investment revenue 2,777 6,000 Total revenues 1,437,808 1,376,400 Expenditures Public works 495,919 569,915 Capital outlay 745,820 946,243 Total expenditures 1,241 ,739 1,516,158 Excess [deficiency] of revenues over [under] expenditures 196,069 [139,758] Other financing sources [uses] Transfers in 160,000 160,000 Total other financing sources (uses] 160,000 160,000 Excess [deficiency] of revenues and other sources over [under] 356,069 20,242 expenditures and other [uses] Unreserved fund balance, January 1 387,919 669,880 Prior year cancelled encumbrances 5,471 Unreserved fund balance, December 31 749,459 $ 690,122 $ Reconciliation to GAAP Taxes receivable 322,888 Current year encumbrances 9,951 GAAP Fund Balance, December 31 $ 1,082,298 See independent auditor's report on the financial statements. 24 Final 1,370,400 6,000 1,376,400 569,915 946,243 1,516,158 [139,758] 160,000 160,000 20,242 669,880 690,122 Variance with Final Budget Positive [Negative] $ 64,631 [3,223] 61,408 73,996 200,423 274,419 335,827 335,827 [281 ,961] 5,471 $ 59,337 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,251,546 $ 8,043,656 $ 8,269,993 Investment revenue 13,381 5,000 5,000 Total revenues 8,264,927 8,048,656 8,274,993 Expenditures Capital outlay 5,270,351 4,620,500 6,470,500 Total expenditures 5,270,351 4,620,500 6,470,500 Excess [deficiency] of revenues over [under] expenditures 2,994,576 3,428, 156 1,804,493 Other financing sources (uses] Transfers [out] [2 ,568,350] [3,750,000] [2 ,500,000] Total other financing sources [uses] [2,568,350] [3,750,000] [2 ,500,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 426,226 (321,844] (695,507] Unreserved fund balance, January 1 1,056,648 785,304 1,797,359 Prior year cancelled encumbrances 176,002 Unreserved fund balance, December 31 1,658,876 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 424,738 GAAP Fund Balance, December 31 $ 2,083,614 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [18,447] 8,381 [10,066] 1,200,149 1,200,149 1,190,083 (68 ,350] [68,350] 1,121,733 [740,711] 176,002 $ 557,024 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2017 Business-Type Activities: Ente!Erise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Dis~osal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments $ 6,515,002 $ 22, 115,048 $ 1,568,556 $ 137,273 $ 30,335,879 $ 3,049,833 Receivables (net of allowance for uncollectibles) Accounts 194,086 1,490,712 218,145 1,902,943 Interest 16 16 Inventory and prepaid supplies 408,562 26,690 435,252 165,125 Total current assets 6,709,104 24,014,322 1,786,701 163,963 32,674,090 3,214,958 Capital assets: Nondepreciable capital assets: Construction in progress 2,149,789 2, 149,789 Land 682,000 844,806 15,000 1,541,806 Depreciable capital assets: Capital assets 11,312,996 136,213,033 2,377,725 1,161,740 151,065,494 184,326 Less: accumulated depreciation 8,798,898 52,319,351 1,551 ,983 781,296 63,451 ,528 160,966 Total capital assets 3, 196,098 86,888,277 825,742 395,444 91,305,561 23,360 Total assets 9,905,202 110,902,599 2,612,443 559,407 123,979,651 3,238,318 Deferred outflows of resources: Pension deferred outflows of resources 78,469 439,410 102,050 31,436 651 ,365 31 ,240 Deferred charge on bond issuance 236, 123 236,123 Total deferred outflows of resources 78,469 675,533 102,050 31,436 887,488 31 ,240 Total assets and deferred outflows of resources $ 9,983,671 $111,578,132 $ 2,714,493 $ 590,843 $ 124,867,139 $ 3,269,558 Liabilities and deferred inflows of resources: Current liabilities Accounts payable $ 24,885 $ 535,111 $ 18,675 $ 9,364 $ 588,035 $ 57,890 Retainage payable 10,681 10,681 Interest payable 10,937 225,689 236,626 Meter deposits payable 176,114 176,114 Current portion of compensated absences payable 33,697 203,412 68,558 38,548 344,215 28,707 Current portion of accrued claims payable 572,832 Current portion of loans payable 571 ,773 571 ,773 Current portion of general obligation bonds payable 375,000 867,407 1,242,407 Current portion of revenue bonds payable 708,696 708,696 Total current liabilities 444,519 3,298,883 87,233 47,912 3,878,547 659,429 Noncurrent liabilities: Compensated absences payable 29,185 176,179 59,381 33,387 298,132 24,863 Accrued claims payable 44,772 Net OPEB Obligation 78,890 374,881 116,258 34,616 604,645 Net pension liability 402,327 2,202,239 557,424 171 ,620 3,333,610 165,559 Payable from restricted assets Loans payable 8,291 ,037 8,291,037 General obligation bonds payable 780,000 4,498,026 5,278,026 Revenue bonds payable 11,898,051 11,898,051 Landfill post-closure care liabilities 1,981,498 1,981,498 Total noncurrent liabilities 3,271,900 27,440,413 733,063 239,623 31,684,999 235, 194 Total liabilities 3,716,419 30,739,296 820,296 287,535 35,563,546 894,623 Deferred inflows of resources Pension deferred inflows of resources 30,040 141,970 37,644 11 ,123 220,777 11,338 Total deferred inflows of resources 30,040 141,970 37,644 11 ,123 220,777 11,338 Total liabilities and deferred inflows of resources $ 3,746,459 $ 30,881,266 $ 857,940 $ 298,658 $ 35,784,323 $ 905,961 Net position Net investment in capital assets $ 2,041,098 $ 60,053,287 $ 825,742 $ 395,444 $ 63,315,571 $ 23,360 Restricted Restricted for bond retirement 1,512,125 1,512,125 Unrestricted 4,196,114 19,131,454 1,030,811 1103,259) 24,255,120 2,340,237 Total net position $ 6,237,212 $ 80,696,866 $1,856,553 $ 292, 185 $ 89,082,816 $ 2,363,597 The notes to the basic financial statements are an integral part of this statement. 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31 , 2017 Business-Type Activities: Entererise Funds Solid Waste Water and Diseosal Sewer Sanitation Golf Course Operating revenues Charges for services $ 3, 164,761 $19,855,033 $ 2,884,526 $ 798,368 Miscellaneous 20,552 5,522 77,008 Total operating revenues 3,185,313 19,860,555 2,884,526 875,376 Operating expenses General government Public works 1,469,858 11,398,035 2,024,390 Recreation 820,627 Depreciation 850,548 3,322, 113 153,242 31 ,633 Total operating expenses 2,320,406 14,720,148 2,177,632 852,260 Operating income [loss] 864,907 5, 140,407 706,894 23, 116 Nonoperating revenues [expenses] Investment revenue 24,658 98,307 5,793 386 Interest expense [44,457] [923,217] Gain/[loss] on disposal of fixed assets Accretion of bond premium 11,560 Amortization of bond issuance costs [18,472) Total nonoperating revenues [expenses] (19,799) [831 ,822) 5,793 386 Income [loss] before transfers 845,108 4,308,585 712,687 23,502 Transfers from [to] other funds Transfers in Transfers [out] [540,000] [3,450,000) [376,500] Total transfers [540,000] [3,450,000] [376,500] Change in net position 305,108 858,585 336,187 23,502 Net position, January 1 5,932,104 79,838,281 1,520,366 268,683 Net position, December 31 $ 6,237,212 $ 80,696,866 $1 ,856,553 $ 292,185 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 26,702,688 $ 8,323,935 103,082 41 , 186 26,805,770 8,365, 121 8,209,819 14,892,283 820,627 4,357,536 9,260 20,070,446 8,219,079 6,735,324 146,042 129, 144 13,666 [967,674] [4,044] 11,560 [18,472) [845,442) 9,622 5,889,882 155,664 130,000 [4,366,500) [4,366,500] 130,000 1,523,382 285,664 87,559,434 2,077,933 $ 89,082,816 $ 2,363,597 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: EnterE!rise Funds Solid Waste Water and DiSE!OSal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $ 3,160,158 $19,691 ,753 $ 2,856,083 $ 798,368 Cash paid to suppliers of goods or services [828,507] [7, 171 ,517] [1 ,101,055] [400,392] Cash paid to employees [607,960] [3,976,523] [791 ,564] [423,329] Other operating receipts 20,552 5,522 77,008 Net cash provided by [used in] operating activities 1,744,243 8,549,235 963,464 51 ,655 Cash flows from capital and related financing activities Purchase and construction of capital assets [4,719,132] [84,953] [27,642] Proceeds from sale of capital assets [47,023] Proceeds from loans 2, 116,375 Principal payments -loans [685,589] Principal payments -general obligation bonds [365,000] [747,082] Principal payments -revenue bonds [675,000] Interest pa id [45, 118) [960,485) Net cash provided by [used in] capital and related financing activities [410, 118) [5,717,936) [84,953) [27,642) Cash flows from investing activities Interest received 24,658 98,307 5,793 386 Cash flows from noncapital financing activities Transfers in Transfers [out] [540,000J [3,450,000J [376,500) Net cash provided by [used in] noncapital financing activities [540,000J [3,450,000J [376,500) Net increase [decrease] in cash and cash equivalents 818,783 [520,394] 507,804 24,399 Cash and cash equivalents, January 1 5,696,219 22,635,442 1,060,752 112,874 Cash and cash equivalents, December 31 $6,515,002 $22,115,048 $1,568,556 $ 137,273 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,506,362 $ 8,392,053 [9,501 ,471] [7,875,819] [5,799,376] [275,772] 103,082 41 ,185 11,308,597 281 ,647 [4,831 , 727] [47,023] 2, 116,375 [685,589] [1 ,112,082] [675,000] [1 ,005,603) [6,240,649) 129, 144 13 666 130,000 [4,366,500) [4,366,500) 130,000 830,592 425,313 29,505,287 2,624,520 $ 30,335,879 $ 3,049,833 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31 , 2017 Business-Type Activities: Enterprise Funds Total Internal Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Service Funds Operating income [loss] $ 864,907 $ 5,140,407 $706,894 $ 23,116 $ 6,735,324 $ 146,042 Adjustments to reconcile operating income [loss] to net cash provided by (used in] operating activities Depreciation expense [Increase] decrease in accounts receivable [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase (decrease] in retainage payable Increase [decrease] in accrued compensated absences Increase (decrease] in claims payable Increase [decrease] in landfill postclosure liabilities Increase [decrease] in net pension liability Increase [decrease] in net OBEB obligation Increase [decrease] in meter deposits payable Increase [decrease] in deferred inflows Net cash provided by (used in] operating activities $ 850,548 [4,603] [5,914] 1,701 [16,221] 63,649 [1 , 191] [12,601] 3,968 1,744,243 3,322, 113 [160,456] 71 ,210 [19,295] 433,569 [282,912] [27,819] [3,883] 66,180 [2,824] 12,945 $ 8,549,235 153,242 31 ,633 [28,443] [3,706] [2,089] (287] 4,827 6,743 11 ,794 4,467 [421] [58] 116,258 [10,445] 1,402 192 $ 963,464 $ 51 ,655 The notes to the basic financial statements are an integral part of this statement. 29 4,357,536 9,260 [193,502] 67,504 24,761 [27,585] [1 ,162] 446,840 20,018 [282,912] [27,779] 14,065 68,117 63,649 [5,553] [234] 159,392 [2,824] 18,507 780 $ 11 ,308,597 $ 281 ,647 ASSETS Cash and investments Total assets CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31 , 2017 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 389,555 $ 389,555 $ 389,555 $ 389,555 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five- member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2017. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469 S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31 , 2017 Total change in unencumbered cash , year ended December 31 , 2017 Total cash receipts, year ended December 31 , 2017 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building Authority (Audited) $ 1,173,041 22,690 1,431 ,170 440,883 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker's compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General fund -To account for resources traditionally associated with government, which are not required legally, or by sound financial management to be accounted for in another fund. Tourism and convention fund -To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or improvement of streets within the City. Sales tax capital fund -To account for 93% of the .40 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt service fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the municipal golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Properly taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2018. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5 -15 6 -10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001 , a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8. Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Major Governmental Funds Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Governmental Governmental General Convention ~ Capital lmg;rovement Service Projects QalicB Funds Funds Fund Balances: Nonspendable for: Inventory $ 152.982 $ 152,982 Restricted for: Publicwor1<s 1,072,347 1,072,347 Public health and sanitation 164 164 Culture and recreation 124,221 124,221 Planning and development 213,461 232,778 446,239 Debt payments 1,509,863 1,037,888 2,547,751 Committed for: Public safety 375,147 375,147 Culture and recreation 690,067 690,067 Planning and development 1,714,956 18,589 1,733,545 Cemetery 495,895 495,895 Capital improvements 1,658,876 2.817,807 895,117 1,406,025 6,777,825 Assigned for: General government 28,477 28,477 Public safety 121,515 121,515 Publicwor1<s 61,533 61,533 Culture and recreation 2,485 2,485 Capital improvements 9,951 424,738 206,771 641,460 Unassigned: 6 515,517 ---(27,854] 6,487,663 Total Fund Balances $ 6 882,509 $ 213,461 $ 1,082,298 $ 2,083.61 4 $ 3,024,578 $ 1,509,863 $ 895, 117 $ 1,714,956 $ 4,352 920 $ 21,759,316 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets , Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then . The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, the City reports changes in the pension liability proportion and contributions made to the pension plan after the measurement date of the net pension liability as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue -property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, the City reports differences between expected and actual experience, differences between projected and actual investment earnings, changes in assumptions, and changes in the pension liability proportion as deferred inflows for governmental activities. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11 . Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, granters or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund , and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2017 budget was amended for the Tourism and Convention Fund and the Sales Tax Capital Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31 , 2017 in the Tourism and Convention Fund which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31 , 2017, the statutory limit for the City was $142,000,537, providing a debt margin of $80,704,353. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 3. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131 . This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's investors service or Standard and Poor's corporation, and various other investments as specified in KSA 10-131. At December 31 , 2017, the City has the following investments: Investment Type Fair Value Kansas Municipal Investment Pool $ 305,523 S&P AAAf/S1+ Total fair value $ 305,523 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31 2017, the City's deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31 , 2017, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,439,071 , $437,246, and $125,272, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables C. Receivables as of year-end , including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt Capital SFH General Convention Gas Service Projects QalicB Primary Government Receivables: Accounts $ 6,066,477 $ 476,551 $ $ $ 54,161 $ 123,914 Taxes 8,864,737 322,888 2,521,302 Interest 16 726 Gross receivables 14,947,940 476,551 322,888 2,521 ,302 54,161 123,914 Less: allowance for uncollectibles [4,808,497] Total $ 10,139,443 ~ 476,551 ~ 322,888 ~ 2,521,302 ~ 54,161 ~ 123,914 Solid Water Waste and Diseosal Sewer Primary Government Receivables: Accounts $ 194,086 $ 2,790,241 Taxes Interest 16 Gross receivables 194,102 2,790,241 Less: allowance for uncollectibles [1,299,529] Total $ 194 102 ~ 1 490,712 Component Units Salina Airport Authority Accounts Less: allowance for uncollectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Interest Total Salina Housing Authority Total lnterfund Receivables and Payables The composition of interfund balances as of December 31, 2017, is as follows: Fund Types General Fund Capital Project Fund SFH QalicB Fund Police Grants Fund Due From $ 27,854 9,656 9,656 27,854 $ 37,510 $ 37,510 Other Governmental Subtotal $ 16,034 $ 6,737,137 11,708,927 16 726 16,034 18,462,790 [13,170] [4,821,667] ~ 2,864 ~ 13,641123 Sanitation Total $ 408,313 $ 10,129,777 11,708,927 16 742 408,313 21 ,855,446 [190,168] [6,311,364] ~ 218,145 15,544,082 $ 268,134 [1,500} 266 634 18,934 [1,000] 435 18 369 ~ 285,003 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4 . DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2017, was as follows: Balance Adj. Bal. Balance 12/31/2016 Adjustments 12/31/2016 Additions Retirements 12/31/2017 City governmental activities: Governmental activities: Capnal assets, not being depreciated Construction in progress $ 30,810,942 $ $ 30,810,942 $ 8,706,902 $ 10,608 ,276 $ 28,909,568 Land 24,001,859 24,001 ,859 91,000 24,092,859 Capital assets, being depreciated Infrastructure 193,545,859 193,545,859 5,769,479 199,315,338 Buildings and improvements 43,599,404 43,599,404 9,417,305 7,030 53,009,679 Vehicles 9,551 ,939 9,551 ,939 1,276,732 442,172 10,386,499 Equipment, furniture and fixtures 5,628,958 5,628,958 1,056,286 71,233 6,614 011 Total capital assets 307, 138,961 307,138,961 26,317,704 11128 711 322,327,954 Less accumulated depreciation for: Infrastructure 80,432,297 80,432,297 3,925,147 84,357,444 Buildings and improvements 18,742,249 18,742,249 1,191,358 3,156 19,930,451 Vehicles 6,403,701 6,403,701 763,511 300,936 6,866,276 Equipment, furniture and fixtures 4 438,786 4,438,786 196,041 60,998 4,573,829 Total accumulated depreciation 110,017,033 110,017,033 6,076,057 365,090 115, 728,000 Governmental activities capital assets, net $ 197,121 ,928 $ -$ 197, 121,928 $ 20,241 ,647 $ 10,763,621 $ 206,599,954 Business-type activities: Capital assets, not being depreciated Construction in progress $ 15,727,780 $ -$ 15,727,780 $ 4,389,421 $ 17,967,412 $ 2, 149,789 Land 1,541,806 1,541 ,806 1,541,806 Capital assets, being depreciated Infrastructure 101 ,119,995 101,119,995 18,337,654 119,457,649 Buildings and improvements 22,579,933 22,579,933 22,579,933 Vehicles 3,652,923 3,652,923 84,953 47,024 3,690,852 Equipment, furniture and fixtures 5,302,926 5,302,926 34,1 34 5,337,060 Total capital assets 149,925,363 149,925,363 22,846,162 18 014 436 154,757,089 Less accumulated depreciation for: Infrastructure 40,241,102 40,241 ,102 3,488,860 43,729,962 Buildings and improvements 12,796,638 12,796,638 421,287 13,217,925 Vehicles 2,492,221 2,492,221 205,045 47,024 2,650,242 Equipment, furniture and fixtures 3,611 ,055 3,611 ,055 242 344 3,853,399 Total accumulated depreciation 59,141,016 59,141,016 4,357 536 47,024 63,451 ,528 Business-type activities capital assets, net $ 90,784,347 $ -$ 90,784,347 $ 18,488,626 $ 17,967,412 $ 91,305,561 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City's depreciation expense was charged to governmental functions as follows : Governmental Activities: General government $ 75,433 Public safety 721 ,766 Public works 4,280,905 Public health 30,270 Culture and recreation 811 ,875 Planning and development 155,808 Total depreciation $ 6,076,057 Business-type Activities: Solid Waste Disposal $ 850 ,548 Water and Sewer 3,322,113 Sanitation 153,242 Golf Course Division 31 633 Total depreciation $ 4,357,536 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2017: Restated Balance Balance January 1, December 31 , ZQ1l ~ ~ ZQ1l Governmental activities: General obligation bonds $ 51 ,816,400 $ 9,388,370 $ 5,210,465 $ 55,994,305 Financing lease 321,174 163,306 157,868 Loans payable 12,157,127 13,963 12, 171,090 Accrued compensation 2,803,847 1,493,457 1,499,346 2,797,958 Temporary notes 11 ,505,000 2196742 6,890,000 6 811 742 Total $ 78 603,548 $ 13,092,532 $ 13,763,117 $ 77,932 963 Business-type activities: General obligation bonds $ 7,640,380 $ $ 1,119,947 $ 6,520,433 Revenue bonds 13,285,443 678,696 12,606,747 Loans payable 7,432,024 2, 116,375 685,589 8,862,810 Accrued compensation 670 126 316 436 344 215 642 347 Total $ 29,027,973 $ 2,432 811 $ 2,828,447 $ 28,632,337 Component Units: General obligation bonds $ 22,632,000 $ 2,520,000 $ 1,065,000 $ 24,087,000 Less unamortized discount [204,733] [53,956] [179,204] [79,485] Special assessment debt 11 268 2 061 9 207 Total component units $ 22,438,535 $ 2,466 044 $ 887 857 $ 24,016,722 44 Amounts Due Within ~ $ 5,561,280 157,868 1,499,345 2 196 742 $ 9 415,235 $ 1,242,407 708,696 571 ,773 344 215 $ 2,867,091 $ 1,220,000 2 153 $ 1,222,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal Improvements 2008B, due 7/1/2028 Internal Improvements 2009A, due 10/1 /2029 Internal Improvements 201 OA, due 10/1 /2025 Internal Improvements 201 OB, due 10/1 /2023 Internal Improvements 2011A, due 10/1/2031 Internal Improvements 2012A, due 10/1/2027 Refunding 2012B, due 10/1/2020 Internal Improvements 2013A, due 10/1/28 Internal Improvements 2013B , due 10/1/33 Internal Improvements 2014A, due 10/1 /34 Improvement and Refunding 2015A, due 10/1/35 Internal Improvements 2016A, due 10/1/36 Refunding 2016B, due 10/1/2031 Internal Improvements 2017A, due 10/1/37 Total general obligation bonds Revenue Bonds Revenue 2011, due 10/1/31 Total revenue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2017-1 , due 8/1/2018 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable Financing Lease, due 2/10/2017 Equipment, due 5/8/18 Software, due 10/10/18 45 Original Interest Bonds Issue Rates Outstanding $ 3,525,000 3.65% to 5.00% $ 1,845,000 23,695,000 2.00% to 5.00% 5,220,404 6,916,592 2.00% to 3.875% 968,318 7,973,044 0.50% to 3.00% 2,297,173 6,587,985 2.00% to 5.00% 1,444,598 2,383,903 1.00% to 2.45% 1,662,602 3,817,108 1.00% to 1.40% 902,040 1,369,380 3.00% to 4.00% 1,086,880 4,485,073 0.60% to 3.65% 3,539,058 7,839,050 2.50% to 3.75% 6,088,693 7,157,688 2.00% to 4.00% 6,494,420 6,681,766 2.00% to 3.00% 6,436, 178 15, 141,004 2.00% to 5.00% 15,141 ,004 9,388,370 3.00% to 3.375% 9,388,370 $ 62,514,738 $ 16,193,925 2.00% to 4.60% $ 12,606,747 $ 12,606,747 $ 4,615,000 2,180,000 $ 9,330,000 4,250,000 12,640,000 $ 146,235 456,370 1.00% 2.00% 2.12% 2.78% 1.58% 3.28% 3.19% $ 4,615,000 2,196,742 $ 6,811,742 $ 4,833,476 4,029,334 12,171,090 $ 21 ,033,900 $ 38,347 119,521 $ 157,868 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 2009B, due 2021 General Obligation 2011A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1 , due 2019 Temporary Note 2017-1 , due 2019 General Obligation 2017 A, due 2030 General Obligation 2017B, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $ 6,080,000 11 ,820,000 3,075,000 657,000 1,440,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 1.43% 3.04% 3.02% 4.47% Bonds Outstanding $ 1,545,000 3,160,000 2, 195,000 657,000 1,440,000 10,255,000 4,835,000 33,023 [112,508) 24,007,515 9,207 9 207 $ 241016,722 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2018 $ 6,803,687 $ 1,899,204 $ 8,702,891 2019 6,923,687 1,627,845 8,551,532 2020 4,778,686 1,431,514 6,210,200 2021 4,498,434 1,298,645 5,797,079 2022 4,577,283 1, 150, 154 5,727,437 2023-2027 18,891,638 18,891 ,638 37,783,276 2028-2032 10,234,792 1,648,156 11,882,948 2033-2037 5,806,531 453,346 6,259,877 Total $ 62,514,738 $ 28,400,502 $ 90,915,240 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Year 2018 $ 2019 2020 2021 2022 2023-2027 2028 -2031 Total $ General Obligation -Component Units Bonds Outstanding 1,220,000 $ 1,310,000 1,350,000 1,400,000 1,455,000 7,970,000 712851000 21,990,000 $ Interest Due 746,880 652,277 612,110 565,880 511 , 135 1,852,938 575 795 5,517,015 Total $ 1,966,880 1,962,277 1,962,110 1,965,880 1,966, 135 9,822,938 7,860)95 $ 27,507,015 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prima!}'. Government Bonds Interest Year Outstanding Due Total 2018 $ 708,696 $ 509,141 $ 1,217,837 2019 728,696 487,991 1,216,687 2020 748,696 466,242 1,214,938 2021 773,696 798,696 1,572,392 2022 798,696 414,148 1,212,844 2023-2027 4,498,480 1,563,177 6,061 ,657 2028-2031 4,349,787 504,816 4,854,603 Total $ 12,606,747 $ 4,744,211 $ 17,350,958 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Go...ernment Notes Interest Year Outstanding Due Total 2018 $ 2,196,742 $ 90,234 $ 2,286,976 2019 4,615,000 46, 150 4,661 , 150 Total $ 6,811,742 $ 136,384 $ 6,948, 126 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for financing leases -to be paid from revenues: Ca~ital Lease -Prima!Y Government Lease Interest Year Outstanding Due Total 2018 $ 157,868 $ 5,071 $ 162,939 Total $ 157 868 $ 5,071 $ 162,939 Kansas Public Water Supply Loans. The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Kansas Water Supply Loans -Primary Gmernment Loans Interest Year Outstanding Due Total 2018 $ 571 ,773 $ 277,128 $ 848,901 2019 580,276 268,625 848,901 2020 593,764 255,137 848,901 2021 607,573 241 ,328 848,901 2022 621 ,707 227, 194 848,901 2023-2027 3,332,540 911 ,965 4,244,505 2028-2032 3,739,637 504,868 4,244,505 2033-2035 2, 150,661 95,361 2,246,022 Total $ 12,197,931 $ 2,781 ,606 $ 14,979,537 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding pri ncipal balance plus all accrued and unpaid interest thereon is due and payable in fu ll. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $6 ,016,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Dakotas Note B -On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31 , 2017, the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31 , 2017, the note balance was $2 ,674,000. CNMC Note B -On July 27, 2016, a $1 ,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full . The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31 , 2017, the note balance was $1 ,326,000. As of December 31 , 2017, the principal balance of these four loans net of $468 ,910 of unamortized debt issuance costs was $12 , 171 ,090. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2018 $ 2,153 $ 412 $ 2,565 2019 2,249 315 2,564 2020 2,350 215 2,565 2021 2 455 110 2 565 Total $ 9,207 $ 1 052 $ 101259 Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease. On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31 , 2017, SFH QalicB earned $246,458 of rental income under the terms of the Net Lease. As of December 31 , 2017, rental income of $123,914 remained receivable from the City. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Premises lease (continued). The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2017: 2018 $ 130,000 2019 130,000 2020 130,000 2021 130,000 2022 130,000 2023-2027 1,917,500 2028-2032 3,250,000 2033-2037 3,250,000 2038-2042 3,250,000 2043-2046 2,275,000 $ 14,592,500 F. Operating Leases On December 20, 2012, the City and Saline County jointly entered ir ' -... non-cancelable lease to finance a $2 ,750,000 heating, ventilation and air conditioning (HVAC) upgra .)aline County-City Building Authority. The City's share of the lease agreement is 40% and will 1Jo1 •. . . )r $1, 100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2017. The future minimum lease payments for the lease are as follows: Year Amount 2018 $ 93,926 2019 93,926 2020 93,926 2021 93,926 2022 93,926 2023-2027 469,633 Total $ 939,263 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $4,626,500 $ 810,000 Tourism and convention fund 723,942 Special gas fund 160,000 Sales tax capital fund 2,568,350 Debt service 2,241,309 Capital projects 57,666 Salina Fieldhouse QALICB, Inc. Other governmental funds 1,310,983 Agency funds 57,666 Solid waste disposal fund 540,000 Water and sewer fund 3,450,000 Sanitation fund 376,500 Central garage fund 130,000 Total Transfers $ 8,526,458 $ 8,526,458 The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION A Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law, and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 74-4921 . All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2017. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.46% 19.03% Statutory Employer Capped Rate 8.46% 19.03% Member contribution rates as a percentage of eligible compensation for the fiscal year 2017 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: • State/School • Local • Police and Firemen • Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City's share of the collective pension amounts as of December 31 , 2017, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31 , 2017. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2017, the City's proportion for the Local employees group was 0.811%, which was an increase of .05% from its proportion measured at June 30, 2016. At June 30, 2017, the City's proportion for the Police and Firemen group was 2.191 %, which was an increase of .011 % from its proportion measured at June 30, 2016. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31 , 2017 and 2016, the City and its component units reported a liability of $33,276,991 and $32,923,025, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31 , 2016, which was rolled forward to June 30, 2017, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inflation Long-term rate of return , net of investment expense, and including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31 , 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2017 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return Global Equity 47.00% 6.80% Fixed Income 13.00% 1.25% Yield driven 8.00% 6.55% Real Return 11 .00% 1.71% Real estate 11 .00% 5.05% Alternatives 8.00% 9.85% Short-term investments 2.00% -0.25% 100 00% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System's Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate. The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8. 75%) than the current rate: 1% Decrease (6.75%) $ 16,927,244 29 148 713 Discount Rate (7.75%) 1% Increase (8.75%) Local $ 11 ,753,246 $ 7,391 ,770 Police & Firemen Total 20.546.882 13.345.922 $ 46,075,957 $ 32 ,300, 128 _$ ___ 2_0,._73_7 __ ,6_9_2 Pension Expense. For the year ended December 31 , 2017, the City recognized Local pension expense of $1 ,138,591 and Police and Firemen pension expense of $2,722,012, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority's and Salina Airport Authority's portion of the Local pension expense were $32,442 and $41 ,605, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31 , 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Local Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total 56 Deferred outflows Deferred inflows of resources of resources $ 56,846 $ 406,403 595,232 368,680 632,961 85,945 576,693 310,651 $ 2,230,412 $ 802 ,999 Deferred outflows Deferred inflows of resources of resources $ 993,261 $ 153,700 $ 1,006,499 761 ,169 1,434, 755 91 ,820 66 279 583,959 4,261 ,963 $ 829,479 ------- CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2017, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Housing Authori~ Air~ort Authori~ Deferred outflows Deferred inflows Deferred outflows Deferred inflows ~ Qf [!l~QU[~~ Qf r!l~Qur~!l~ Qf r!l~Qur~!l~ Qf r!l~Qur~!l~ Differences between actual and expected experience $ 2,167 $ 6,740 $ 2,919 $ 20,866 Contributions subsequent to the measurement date 36,983 5,290 Net differences between projected and actual earnings on investments 44,110 18,930 Changes in assumptions 3,493 32,499 4,413 Changes in proportion 2 467 5 096 45 547 71 207 Total $ 85 727 $ 151329 $ 105185 $ 96 486 $1,601,731 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 , 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ [8,406] $ 356,816 $ 348,410 2019 449,682 1,137,553 1,587,235 2020 306,743 714,701 1,021 ,444 2021 [6 ,545] 58,150 51 ,605 2022 90,707 158,765 249,472 Total $ 832,181 $ 2,425,985 $ 3,258,166 $36,983 and $5,290 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ 2,399 $ [17,980] $ [15,581] 2019 16,286 7,594 23,880 2020 12,198 9,651 21,849 2021 134 [2,028] [1,894] 2022 2,398 6,172 8,570 Total $ 33 ,415 $ 3,409 $ 36 ,824 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan , available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (l.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation , recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $177, 141 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2017 2016 Unpaid claims, January 1 $ 255,154 $ 281 ,601 Incurred claims (including IBNRs) 622,556 947,583 Claim payments [655,797] [974,030] Unpaid claims, December 31 $ 221 ,913 $ 255,154 The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2017 2016 $ 294,333 $ 275,440 4,244,648 3,951,548 (4, 143,290] [3,932,655] $ 395,691 $ 294,333 The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31 , 2017. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1 ,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2017. Actual cost may be higher due to inflation , changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2017. Project Authorization Ex12enditures Markley-Magnolia W Sewer $ 5,150,000 $ 200,718 Cloud from Ohio to Levee 155,014 69,242 Ninth and Cloud Intersection Realignn 1,100,000 1,048,542 Bicentennial Center Improvements 10,200,000 12,344,709 Lakewood Middle School Safe Route 81 ,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 Water Well 13 & 14 Maintenance 52,184 50,830 Pavement Condition Survey 36,222 33,909 Community Fieldhouse 6,937,827 8,681,599 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58 ,858 Rebuild High Service Pump P-203 24,187 6,259 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18,128 2017 Country Club Road lmprovemen 1,200,000 953,747 Dowtown STAR District 58,000 87,312 Downtown CID -Alley 1, 159 Downtown TIF 1,944 2017 Mill & Inlay 1,577,502 1,413,554 2017 Major Concrete Rehab 469,472 423,675 Downtown Streetscape 12, 165,000 1,109,400 Smoky Hill River Renewal 3,200,000 1,429,129 S Well Field & WTP Phase 1 1,964,525 366,655 2017 Sidewalks 69,092 53, 105 Police Training Facility 4,900,000 4,204 Beechcraft Road lmprovements-Airpo 1,500,000 401 Indiana Ave Trail 79,262 74,486 Preliminary Design Broadway lmpr 50,000 50,000 2018 Pavement Sealing 325,000 275 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 201 7 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May, 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22 , 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1 ). Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011 , Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Publ ic Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011 , Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA. 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1 ,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915 ,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011 , and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also. the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8.426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during 01 2018. The Feasibility Study portion of the CAFO scope of work was also completed during 01 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work are scheduled to be completed during 02 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 04 2018. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Postemployment Health Care Plan Plan Description. The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. Plan participants contributed approximately $265,000 to the Plan (approximately 100% of total premiums) through their required contribution of $525 per month for retiree-only coverage and $1,408 for family coverage. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the Plan for the year, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the Plan: Annual required contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB cost (expense) Benefit payments Change in net OPEB obligation Net OPEB obligation -beginning of year Net OPEB obligation -end of year $ 430,085 150,156 [166,838] 413,403 [265,000] 148,403 5,005,151 $ 5,153,554 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the year ended December 31 , 2017 was as follows: 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31 , 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31 , 2014 534,877 185,000 4,336,620 December 31 , 2015 556,385 209,000 4,684,005 December 31 , 2016 578,146 257,000 5,005,151 December 31, 2017 413,403 265,000 5, 153,554 Funding Status and Funding Progress. As of the year ended December 31 , 2017, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $4,471 ,205 and the actuarial value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $4,471 ,205. The covered payroll (annual payroll of active employees covered by the plan) was $23,770,671 , and the ratio of the UAAL to the covered payroll was 18.81%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the year ended December 31 , 2017, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 3.00% investment rate of return, which is the rate of the employer's own investments as there are no plan assets and an initial annual medical and dental healthcare cost trend of 6.80%, reduced by decrements to an ultimate rate 4.10% after eighty years. The UAAL is being amortized as a level dollar over an open thirty-year period. J. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $[27,854] at December 31 , 2017. 64 K. TAXABATEMENTS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 In 2017, the City of Salina participated in real property tax abatements for six local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start-ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Ad Valorem Property Tax Abatements 2017 Tax Company Start End % Abated Salina Vortex Corp (facility improvements) 2015 2024 75% $ 20,981 Bergkamp (facility addition/impro-.ements) 2010 2019 50% 6,486 Great Plains Mfg (facility impro-.ements) 2014 2023 100% - Veris Technologies (facility addition/improvements) 2015 2024 40.5% 1,925 Twin Oaks (facility addition/impro-.ements) 2015 2024 55% 2,602 Salina Field House (facility) 2017 2026 100% 27,401 Total $ 59,395 Tax Increment Financing (TIF). TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2017 K. TAX ABATEMENTS (Continued) TIF Project Plans District Purpose Base Year Expires Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and prilate Lambertz infrastructure 2007 2027 Total 2017 Reimbursements Sales Tax Property Tax $ 212,624 $ 258,932 $ 212,624 $ 258,932 Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Community Improvement District (CID) 2017 Bigible Reimbursement Name Rate Start Expires Purpose Amount* Assist with imprm.ements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center $ 154,154 Total $ 154,154 *Reimbursement was not actually paid to de1.eloper until Jan. 2018 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) Neighborhood Revltallzatlon Act (NRA) Property/Business Name Address Weis Fire & Safety lmpr01.ement #2 Erick Mendenhal1 1325 N. 3rd Annie/Arlene Lewis 1 005 N. 10th Street Michelle Malone 809 N. 2nd Street Boyd E. Smith Trust 148 S. Santa Fe Boyd E. Smith Trust 148 S. Santa Fe Welsh lm.estments LLC 300 S. 9th Street Leon Marrs Trust 740 N. 2nd Street Johnny M. & Sung Hee Kim 233A S. Fourth Street Pioneer Presidents Place LP 210 W.Mulberry Street Christpher Helm 613 N 5th Street Paul Foster 523 N. 11th James M. Monroe 620 W. Hamilton Street Chanel Thomas 241 N. Front Street Christina Litwiller 148 N. 12th Street Jeremy Cessna 219 N. Front Street Troy & Dawn Cramer 1101 N. 10th William & Mary Warhurst 714 Park Street Holly Fain 204 Forest A1.enue Arlene Cox 200 Forest A1.enue Gloria Williams 903 N. 10th Street Michelle Rogan 240 S. Clark Street Samuel A. Rock 1329 N. 4th Street Jessica A. Ziegler 221 N. 2nd Street Delin or Jessica Know 207 N. Penn Ra1.ey lm.estments LLC 157 N. Se1.enth, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Lamont Outland 1206 N. 7th Street Michelle Bunch 634 N. 8th Street Jermaine and Tykea Polk 226 N. 2nd Street Mary Marshall 937 N. 3rd Street Angela Fishburn 1219 N. 8th Street Kress Building LLC 134 S. Santa Fe A1.e Heritage at Hawthorne Partners, LLC 715 N. 9th Street Will & Mary Warhurst 809 W. Ash Donnie & Ramona Marrs 2035 E. Iron #300R TJTM, Inc. 2035 E. Iron #213C Troy Valcil 853 NalBhO Michelle Malone 815 N. 2nd Street Timothy & Linda Rickman 719 E. Ash Y-..ette Gelinas 1115 N. 8th Street Charles H Carroll Jr Trust 156-158 S. Santa Fe Pestinger Enterprises LLC 2035 East Iron, Unit 306R Latisha Pierce 705 N. 2nd Street Tanya Shiehzadeh 703 N. 2nd Street Robert & Brenda Burns 1205 N. 4th Street Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Phill Hemmer 2035 E. Iron A1enue, Unit #203R Curtis and Rebecca Schlosser 2035 E. Iron A1.enue, Unit #206R Daryl Bixby Construction Co. 156-158 N. 11th Street Traniesh Byrd 701 N. 2nd Street TJTMlnc 2035 E. Iron #1 OSR TJTMlnc 2035 E. Iron #302R TJTMlnc 2035 E. Iron #202R TJTMlnc 2035 E. Iron #205R Mark Martin Liling Trust 2035 E. Iron #104R Total 67 2017 Type Rebate Paid Com $ 353 Res 49 Res 6 Res 21 Res 104 Com 121 Com 1, 130 Res 37 Res 153 Com 2,472 Com 427 Res 31 Res 136 Res 115 Res 77 Res 82 Res 14 Res 52 Res 94 Res 95 Res 89 Res 109 Res 21 Res 90 Res 277 Com 1, 116 Res 200 Res 212 Res 107 Res 184 Res 184 Com 509 Com 1,523 Res 228 Res 815 Res 92 Res 111 Res 23 Res 134 Res 201 Com 2,576 Res 449 Res 244 Res 220 Res 174 Com 2,466 Res 1,843 Res 960 Com 516 Res 199 Com 702 Com 636 Com 756 Com 310 Com 717 $ 24,560 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION December 31, 2017 Schedule of Employer Contributions: Annual Fiscal Annual OPES Net Year OPES Cost OPES Ended Cost Contributed Obligation December 31 , 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31 , 2014 534,877 185,000 4,336,620 December 31 , 2015 556,385 209,000 4,684,005 December 31 , 2016 578,146 257,000 5,005, 151 December 31 , 2017 413,403 265,000 5, 153,554 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued AAL Ratio Payroll Date Assets (a} Liability: (b} (b} -(a} (alb} .(fl 12/31/2013 $ -$ 5,579,912 $ 5,579,912 0.0% $ 22,283, 185 12/31/2014 5,538,770 5,538,770 0.0% 22,156,127 12/31/2015 5,538,770 5,538,770 0.0% 22,958,300 12/31/2016 5,538,770 5,538,770 0.0% 23,245,887 12/31/2017 4,471 ,205 4,471 ,205 0.0% 23,770,671 68 UAAL as Percent of Payroll (b-a}/(c} 25.04% 25.00% 24.13% 23.83% 18.81% CITY OF SALINA, KANSAS KPERS PENSION PLAN REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) December 31, 2017 Schedule of the City's Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Local .1W..lL1§. City's proportion of the net pension liability 0.764% City's proportionate share of the net pension liability $ 10,027,679 City's covered-employee payroll $12,931 ,197 City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% Plan fiduciary net position as a percentage of the total pension liability 71 .98% • -The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Police and Firemen Local 12/31/15 .1lllll1.2 2.258% 0.761% $ 16,395.794 $11,770,699 $10, 161 ,866 $ 13,371,550 161 .35% 88.03% 74.60% 68.55% Schedule of the City's Contributions Last Ten Fiscal Years* Police and Firemen 1.m.1L1..2 2.180% $20,251,512 $10,799,898 187.52% 69.30% Police and Police and Local Will1l 0.811% $ 11, 753,246 $ 13,606,499 86.38% 72.15% Local Firemen Local Firemen Local Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency [excess] ~ ~ 1.m1ill ~ .1m1L1Z $ 1,256,217 $ 2,527,995 $ 1,243,711 $ 2,361 ,273 $ 1,179,745 $ 1256217 2,527,995 1 243 711 2,361,273 1179745 $ $ $ $ Police and Firemen Will1l 2.191% 20,546,882 10,606,934 193.71% 70.99% Police and Firemen 1m.1L1.Z 1,986,933 1 986 933 City's covered-employee payroll $13,251 ,236 $10,730,033 $13,548,056 $10,593,419 $13,944,989 $ 10,441,055 Contributions as a percentage of covered employee payroll * -Data became available with the inception of GASB 68 during fiscal year 2015, therefore 1 O years of data is unavailable. 9.48% 23.56% 69 9.18% 22.29% 8.46% 19.03% COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 12.5% of the 1/4 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund -To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund -To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund -To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund -To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund -To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund -To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds -To account for revenue and expenses associated with federal Equitable Sharing Program funds. 70 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Homeowners' assistance fund -To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund -To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund -To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year 2076. 71 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31 , 2017 Total Total Non major Non major Non major Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 3,001 ,083 $ 501 ,693 $ 1,037,888 Receivables Accounts 2,864 Total assets $ 3,003,947 $ 501 ,693 $ 1,037,888 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 162,754 $ -$ - Due to other funds 27,854 Total liabilities 190,608 Fund balances: Restricted 357,163 1,037,888 Committed 2,484,030 501,693 Assigned Unassigned [27,854] Total fund balances 2,813,339 501 ,693 1,037,888 Total liabilities and fund balances $ 3,003,947 $ 501 ,693 $ 1,037,888 See independent auditor's report on the financial statements. 72 Total Non major Governmental Funds $ 4,540,664 2,864 $ 4,543,528 $ 162,754 27,854 190,608 1,395,051 2,985,723 [27,854] 4,352,920 $ 4,543,528 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Total Total Non major Non major Non major Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 580,766 $ -$ - Intergovernmental 851,416 621,860 Charges for services 469,766 10,619 Licenses and permits 5,300 Investment revenue 22,421 1,828 3,929 Donations 110,606 Miscellaneous 77,763 Total revenues 2, 118,038 12,447 625,789 EXPENDITURES Current Culture and recreation 1,718,877 Public safety 223,912 Public health and sanitation 347,442 Planning and development 86,832 Miscellaneous 35 Debt service Principal retirement 180,000 Interest and other charges 90,935 Capital outlay 751 ,068 Total expenditures 3, 128, 131 35 270,935 Excess [deficiency] of revenues over [under] expenditures [1,010,093] 12,412 354,854 Other financing sources [uses] Transfers in 1,310,983 Transfers [out] Total other financing sources [uses] 1,310,983 Net change in fund balance 300,890 12,412 354,854 Fund balance -Beginning of year 2,512,449 489,281 683,034 Fund balance -End of year $ 2,813,339 $ 501,693 $1,037,888 See independent auditor's report on the financial statements. 73 Total Nonmajor Governmental Funds $ 580,766 1,473,276 480,385 5,300 28,178 110,606 77,763 2,756,274 1,718,877 223,912 347,442 86,832 35 180,000 90,935 751,068 3,399, 101 [642,827] 1,310,983 1,310,983 668,156 3,684,764 $ 4,352,920 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit] Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS 43100 Business Bicentennial Improvement Neighborhood Center District Park $ 143,841 $ 13,304 $ 21 ,599 2,864 $ 143,841 $ 16, 168 $ 21 ,599 $ 85,861 $ -$ - 85,861 16, 168 57,980 21 ,599 57 ,980 16, 168 21 ,599 $ 143,841 $ 16, 168 $ 21 ,599 Special Parks & Special Recreation Alcohol $ 124,221 $ 164 $ 124,221 $ 164 $ -$ 124,221 164 124,221 164 $ 124,221 $ 164 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications $ 185,112 $ 1,052,103 $ 101 ,631 $ 290,851 $ 6,436 $ 374,898 $ 185,112 $ 1,052,103 $ 101 ,631 $ 290,851 $ 6,436 $ 374,898 $ -$ 50,000 $ -$ -$ -$ 9,670 50,000 9,670 185,112 1,002,103 101 ,631 290,851 6,436 365,228 185,112 1,002, 103 101 ,631 290,851 6,436 365,228 $ 185,112 $ 1,052,103 $ 101 ,631 $ 290,851 $ 6,436 ... $ ___ 3_7_4._,8_9_8 See independent auditor's report on the financial statements. 74 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) 43100 Kenwood Special Cove Law Police Capital Enforcement Grants $ 101,852 $ 81 $ $ 101,852 $ 81 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 7,689 $ -$ - Due to other funds 27 ,854 Total liabilities 7,689 27,854 Fund balance: Restricted Committed 94, 163 81 Assigned Unassigned [27,854J Total fund balance [deficit] 94,163 81 [27,854J Total liabilities and fund balances $ 101,852 $ 81 $ - Federal DARE Grants Donations $ 3,304 $ 18,824 $ 3,304 $ 18,824 $ -$ 235 235 3,304 18,589 3,304 18,589 $ 3,304 $ 18,824 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11 ,440 $ 5,525 $ 377,542 $ 3,001 ,083 2,864 $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11 ,440 $ 5,525 $ 377,542 $ 3,003,947 $ 225 $ 4,680 $ -$ -$ -$ -$ 4,394 $ 162,754 ___ 2_2_5 4,680 25,973 5,525 32,066 105,313 98 11,440 32,066 105,313 25,973 98 11,440 5,525 $ 32,291 $ 109,993 $ 25,973 _$~---9=8 $ 5,525 11,440 .._$ _=-- See independent auditor's report on the financial statements. 75 27,854 4,394 190,608 357, 163 373, 148 2,484,030 [27 ,854) 373, 148 2,813,339 $ 377,542 $ 3,003,947 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31 , 2017 Business Bicentennial Improvement Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 79, 117 Licenses and permits 5,300 Investment revenue 12,513 47 94 Donations Miscellaneous Total Revenues 12,513 79,164 5,394 Expenditures Current Culture and recreation 738,507 Public safety Public health and sanitation Planning and development 72,197 Capital outlay 32,139 Total Expenditures 738,507 72,197 32,139 Excess [deficiency] of revenues over [under] expenditures [725,994] 6,967 [26,745] Other financing sources [uses] Transfers in 742,633 Transfers [out] Total other financing sources [uses] 742.633 Net change in fund balance 16,639 6,967 [26,745) Fund balance, beginning of year 41,341 9,201 48,344 Fund balance, end of year $ 57,980 $ 16,168 $ 21 ,599 Special Parks & Special Recreation Alcohol $ -$ 202,255 202,255 642 30 202,897 202,285 202 ,255 211 ,320 211 ,320 202,255 [8,423] 30 [8,423) 30 132,644 134 $ 124,221 $ 164 Community Development Revolving $ - 681 681 681 681 184,431 Sales Tax Economic Development $ 335,247 4,060 339,307 441 ,606 441 ,606 [102,299] [102,299] 1,104,402 $ Downtown TIF District #1 88,219 336 88,555 88,555 88,555 13,076 $ South 9th CID 157,300 713 10,371 168,384 168,384 168,384 122,467 $ State Grants - 10,974 22 10,996 10,996 10,996 [4 ,560] 911 Communications $ 331 ,339 1,122 332,461 223,912 223,912 108,549 108,549 256,679 $ 185,112 $ 1,002,103 $ 101,631 $ 290,851 $ 6,436 $ 365,228 ----- See independent auditor's report on the financial statements. 76 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2017 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 21,033 Charges for services Licenses and permits Investment revenue 180 Donations Miscellaneous Total Revenues 180 21,033 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 46,276 2,800 16,927 Total Expenditures 46,276 2,800 16,927 Excess [deficiency) of revenues over [under] expenditures [46,096) [2,799) 4,106 Other financing sources [uses) Transfers in 68,350 Transfers [out) Total other financing sources [uses) 68.350 Net change in fund balance 22,254 [2,799) 4,106 Fund balance, beginning of year 71,909 2,880 [31,960) Fund balance, end of year $94,163 $ 81 $ t27,854] Federal DARE Grants Donations $ -$ 50 54 18,707 50 18,761 14,635 14,635 50 4,126 50 4,126 3,254 14,463 $ 3,304 $ 18,589 War Memorial Maintenance $ - 118 118 345 345 [227] [227] 32 ,293 $ 32,066 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ -$ -$ -$ -$ - 8,560 390,649 93 96 38 3 40,464 2,699 5,522 431 ,206 8,656 2,737 5,525 980,025 980,025 [548 ,819] 8,656 2,737 5,525 500,000 500.000 [48,819] 8,656 2,737 5,525 154,132 17,317 98 8,703 $ 105,313 $ 25,973 $ 98 $ 11 ,440 $ 5,525 See independent auditor's report on the financial statements. 77 Animal Shelter Donations Totals $ -$ 580,766 75,000 851,416 469,766 5,300 1,528 22,421 110,606 110,606 77,763 187,134 2, 118,038 1,718,877 223,912 145,187 347,442 86,832 751 ,068 145, 187 3,128,131 41,947 [1 ,010,093] 1,310,983 1.310.983 41 ,947 300,890 331 ,201 2,512,449 $373,148 $ 2,813,339 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJORPERMANENTFUNDS December 31 , 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total $ 493,866 $ 2,029 $ 5,798 $ 501,693 -'------"'----- $ 493,866 $ 2,029 _$ __ 5_,_,7_9_8 $ 501 ,693 _$ ____ -~$ ____ -~$ ____ -~$---~ 493,866 2,029 5,798 501 ,693 $ 493,866 $ 2,029 $ 5,798 $ 501 ,693 ----- See independent auditor's report on the financial statements. 78 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJORPERMANENTFUNDS For the Year Ended December 31 , 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 10,619 $ -$ Investment revenue 1,798 8 Total revenues 12,417 8 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,382 8 Fund balances -beginning of year 481,484 2,021 Fund balances -end of year $ 493,866 $ 2,029 $ See independent auditor's report on the financial statements. 79 - 22 22 22 5,776 5,798 Total $ 10,619 1,828 12,447 35 35 12,412 489,281 $ 501 ,693 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Investment revenue $ 12,513 $ -$ Total revenues 12,513 Expenditures Culture and recreation 738,507 750,000 Total expenditures 738,507 750,000 Excess [deficiency] of revenues over [under] expenditures [725,994] [750,000] Other financing sources [uses] Transfers in 742,633 720,000 Total other financing sources [uses] 742,633 720,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,639 [30,000] Unreserved fund balance, January 1 41,341 214,254 Unreserved fund balance/GAAP fund balance December 31 $ 57,980 $ 184,254 $ See independent auditor's report on the financial statements. 80 Final - 750,000 750,000 [750,000] 720,000 720,000 [30,000] 214,254 184,254 Variance with Final Budget Positive [Negative] $ 12,513 12,513 11 ,493 11,493 24,006 22,633 22,633 46,639 [172,913] $ p26,274) Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Investment revenue $ 77,493 $ 47 89,175 $ 15 89,175 $ 15 [11 ,682] 32 Total revenues Expenditures Planning and development Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 Reconciliation to GAAP Accounts receivable GAAP Fund Balance, December 31 $ 77,540 89,190 72,197 89,175 72,197 89,1 75 5,343 15 7,961 4,754 13,304 $ 4,769 $ 2,864 16, 168 See independent auditor's report on the financial statements. 81 89,190 [11 ,650] 89,175 16,978 89,175 16,978 15 5,328 4,754 3,207 4,769 $ 8,535 ...... __ ....__ CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) NEIGHBORHOOD PARK FUND Revenues Licenses and permits Investment revenue Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Prior year cancelled encumbrances For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Final $ 5,300 $ 10,000 $ 10,000 94 500 500 5,394 10,500 10,500 32,139 95,073 95,073 32,139 95,073 95,073 [26,745] [84,573] (84,573] 48,344 84,573 84,573 Variance with Final Budget Positive [Negative] $ [4,700] [406] [5,106] 62,934 62,934 57,828 [36,229] Unreserved fund balance, December 31 21 ,599 _$ ____ -_$ ____ -=$ __ 2_1_,5_9_9 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 21 ,599 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31 , 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Revenues Intergovernmental Investment revenue $ 202,255 $ 642 190,082 $ 4,000 190,082 $ 4,000 12, 173 [3,358] Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses) Transfers [out] Total other financing sources (uses) Excess (deficiency] of revenues and other sources over [under) expenditures and other [uses) Unreserved fund balance, January 1 Prior year cancelled encumbrances Unreserved fund balance, December 31 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 202,897 194,082 194,000 194,000 194,000 194,000 8,897 82 8,897 82 104,904 51 ,169 10,420 124,221 $ 51 ,251 $ 124,221 See independent auditor's report on the financial statements. 83 194,082 8,815 194,000 194,000 82 8,815 82 8,815 51 ,169 53,735 10,420 51 ,251 $ 72,970 --------- CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 202,255 $ 216,086 $ Investment revenue 30 Total revenues 202,285 216,086 Expenditures Public health and sanitation 202,255 216,086 Total expenditures 202,255 216,086 Excess [deficiency] of revenues over [under] expenditures 30 Unreserved fund balance, January 1 134 Unreserved fund balance/GAAP fund balance December 31 $ 164 $ -$ See independent auditor's report on the financial statements. 84 Final 216,086 216,086 216,086 216,086 - Variance with Final Budget Positive [Negative] $ [13,831] 30 [13,801] 13,831 13,831 30 134 $ 164 Revenues Taxes Investment revenue Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 335,247 $ 649,849 $ 649,849 4,060 5,000 5,000 339,307 654,849 654,849 441,606 1,474,000 1,474,000 441,606 1,474,000 1,474,000 Excess [deficiency] of revenues over [under] expenditures [102,299] [819,151] Unreserved fund balance, January 1 1, 104,402 869,281 Unreserved fund balance/GAAP fund balance December 31 $ 1,002, 103 $ 50,130 $ See independent auditor's report on the financial statements. 85 [819,151] 869,281 50,130 Variance with Final Budget Positive [Negative] $ [314,602] [940] [315,542] 1,032,394 1,032,394 716,852 235,121 $ 951 ,973 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 390,649 $ 480,350 $ Investment revenue 93 2,000 Miscellaneous 40,464 500 Total revenues 431 ,206 482,850 Expenditures Culture and recreation 980,025 1,016,988 Total expenditures 980,025 1,016,988 Excess [deficiency] of revenues over [under] expenditures [548,819] [534,138] Other financing sources [uses] Transfers in 500,000 500,000 Transfers [out] Total other financing sources [uses] 500,000 500,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [48,819] [34,138] Unreserved fund balance, January 1 154,132 138,327 Unreserved fund balance/GAAP fund balance December 31 $ 105,313 $ 104,189 $ See independent auditor's report on the financial statements. 86 Final 480,350 2,000 500 482,850 1,016,988 1,016,988 [534,1 38] 500,000 500,000 [34,138] 138,327 104,189 Variance with Final Budget Positive [Negative] $ [89,701] [1 ,907] 39,964 [51,644] 36,963 36,963 [14,681] [14,681] 15,805 $ 1,124 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2.433,770 $ 2,691 ,197 Delinquent taxes 52,896 55,000 Motor vehicle taxes 374,874 365,992 Special assessments 1,538,904 1,635,000 Investment revenue 17,102 2,500 Miscellaneous 75,000 Total revenues 4.417,546 4,824,689 Expenditures Debt Service Principal retirement 4,907,918 5,157,920 Interest and other charges 1.490.423 2,086,687 Total expenditures 6,398,341 7,244,607 Excess [deficiency] of revenues over [under] expenditures [1 ,980,795] [2.419,918] Other financing sources (uses] Issuance of bonds 1,000 Premium on bonds 16,751 Transfers in 2,241 ,309 2,000,000 Total other financing sources [uses] 2,259,060 2,000,000 Excess (deficiency] of revenues and other sources over [under] expenditures and other [uses] 278,265 [419,918] Unreserved fund balance, January 1 1,184,289 419,918 Unreserved fund balance December 31 1.462,554 $ - Reconciliation to GAAP Taxes receivable 2,521 ,302 Deferred revenue [2.473,993) GAAP Fund Balance, December 31 $ 1,509,863 See independent auditor's report on the financial statements. 87 Final $ 2,691 ,197 55,000 365,992 1,635,000 2,500 75,000 4,824,689 5, 157,920 2,086,687 7,244,607 [2.419,918] 2,000,000 2,000,000 (419,918] 419,918 $ - Variance with Final Budget Positive [Negative] $ [257.427] [2,104] 8,882 [96,096] 14,602 [75,000] [407,143] 250,002 596,264 846,266 439,123 1,000 16,751 241 ,309 259,060 698,183 764,371 $ 1,462,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 3,160,158 $ 2,047,479 Investment revenue 14,079 4,000 Miscellaneous 20,552 49,310 Total revenues 3, 194,789 2,100,789 Expenditures Public works 1,449,639 1,678,330 Total expenditures 1,449,639 1,678,330 Excess [deficiency) of revenues over [under] expenditures 1,745,150 422,459 Other financing sources (uses] Transfers [out] [905,000) [707,000) Total other financing sources [uses] [905,000) [707,000) Excess [deficiency) of revenues and other sources over (under] expenditures and other [uses) 840,150 [284,541) Unreserved fund balances, January 1 3,040,780 2,090,260 Unreserved fund balances, December 31 $ 3,880,930 $ 1,805,719 See independent auditor's report on the financial statements. 88 Final $ 2,047,479 4,000 49,310 2,100,789 1,678,330 1,678,330 422,459 [707,000) [707,000) (284,541 ) 2,090,260 $ 1,805,719 Variance with Final Budget Positive [Negative] $ 1, 112,679 10,079 (28,758) 1,094,000 228,691 228,691 1,322,691 [198,000) [198,000) 1,124,691 950,520 $ 2,075,211 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 19,663,406 $ 19,625,000 Investment revenue 61 ,765 25,000 Miscellaneous 5,522 10,000 Total revenues 19,730,693 19,660,000 Expenditures Public works 12,243,703 12,831 ,419 Total expenditures 12,243,703 12,831,419 Excess [deficiency] of revenues over [under] expenditures 7,486,990 6,828,581 Other financing sources (uses] Transfers in 122,200 Transfers [out] [5,649,625] [8,770,000] Total other financing sources [uses] [5,649,625] [8,647,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,837,365 [1 ,819,219] Unreserved fund balances, January 1 9,229,332 7,746,266 Prior year cancelled encumbrances 234,904 Unreserved fund balances, December 31 $ 11 ,301 ,601 $ 5,927,047 See independent auditor's report on the financial statements. 89 Final $ 19,625,000 25,000 10,000 19,660,000 12,831,419 12,831,419 6,828,581 122,200 [8,770,000] [8,647,800] [1 ,819,219] 7,746,266 $ 5,927,047 Variance with Final Budget Positive [Negative] $ 38,406 36,765 [4,478] 70,693 587,716 587,716 658,409 [122,200] 3, 120,375 2,998,175 3,656,584 1,483,066 234,904 $ 5,374,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,826,962 $ 2,913,179 $ 2,913,179 Investment revenue 5,793 Total revenues 2,832 ,755 2,913,179 2,913, 179 Expenditures Public works 1,953,277 1,934,016 1,934,016 Total expenditures 1,953,277 1,934,016 1,934,016 Excess [deficiency] of revenues over [under] expenditures 879,478 979,163 979,163 Other financing sources [uses) Transfers [out] [376,500] [996,500] [996,500] Total other financing sources [uses] [376,500] [996,500] [996,500] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 502,978 [17,337] [17 ,337] Unreserved fund balance, January 1 1,041 ,379 1,041 ,560 1,041 ,560 Unreserved fund balances, December 31 $ 1,544,357 $ 1,024,223 $ 1,024,223 See independent auditor's report on the financial statements. 90 Variance with Final Budget Positive [Negative] $ [86,217] 5,793 [80,424] [19,261] [19,261] [99,685] 620,000 620,000 520,315 [181] $ 520,134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31 , 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 798,369 $ 823,950 $ Investment revenue 344 Miscellaneous 75,470 50,000 Total revenues 874,183 873,950 Expenditures Recreation 858,129 818,064 Total expenditures 858,129 818,064 Excess [deficiency] of revenues over [under] expenditures 16,054 55,886 Other financing sources [uses] Transfers [out] [83,289] Total other financing sources [uses] [83,289] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,054 [27,403] Unreserved fund balance, January 1 99,978 239,979 Unreserved fund balances, December 31 $ 116,032 $ 212,576 $ See independent auditor's report on the financial statements. 91 Final 823,950 50,000 873,950 818,064 818,064 55,886 [83,289] [83,289] [27,403] 239,979 212 ,576 Variance with Final Budget Positive [Negative] $ [25,581] 344 25,470 233 [40,065] [40,065] [39,832] 83,289 83,289 43,457 [140,001] $ [96,544) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 298,628 $ 311,337 $ Investment revenue 3,080 2,500 Miscellaneous 2,197 Total revenues 303,905 313,837 Expenditures General government 389,412 709,667 Total expenditures 389,412 709,667 Excess [deficiency] of revenues over [under] expenditures (85,507] (395,830] Unreserved fund balance, January 1 1,004,882 844,976 Unreserved fund balances, December 31 $ 919,375 $ 449, 146 $ See independent auditor's report on the financial statements. 92 Final 311 ,337 2,500 313,837 709,667 709,667 [395,830] 844,976 449, 146 Variance with Final Budget Positive [Negative] $ [12,709] 580 2,197 [9 ,932] 320,255 320,255 310,323 159,906 $ 470,229 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEAL TH INSURANCE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 6,809,860 $ 7,044,200 $ 7,044,200 Investment revenue 10,586 5,000 5,000 Miscellaneous 32,507 5,000 5,000 Total revenues 6,852,953 7,054,200 7,054,200 Expenditures General government 6,402,325 6,995,644 6,995,644 Total expenditures 6,402,325 6,995,644 6,995,644 Excess [deficiency] of revenues over [under] expenditures 450,628 58,556 58,556 Unreserved fund balance, January 1 1,600,344 1,294,000 1,294,000 Unreserved fund balances, December 31 $ 2,050,972 $ 1,352,556 $ 1,352,556 See independent auditor's report on the financial statements. 93 Variance with Final Budget Positive [Negative] $ [234,340] 5,586 27,507 [201,247] 593,319 593,319 392,072 306,344 $ 698,416 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND Revenues Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Total expenditures Excess (deficiency] of revenues over [under] expenditures Other financing sources (uses] Transfers in Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other (uses] Unreserved fund balance, January 1 For the Year Ended December 31, 2017 $ 1,215,447 $ 6,481 1,221 ,928 1,311,755 1,311,755 (89,827] 130,000 130,000 40,173 (18,578] Budgeted Amounts Variance with Final Budget Positive [Negative] Original Final -$ 1,215,447 40 (40] -$ 40 17,500 ___ 17....:...,5_0_0 [11,019] 17,540 1,757,484 1,757,484 [1 ,739,944] 1,730,000 [10,000] 1,720,000 (19,944] 165,078 17,540 1,757,484 1,757,484 [1,739,944] 1,730,000 [10,000] 1,720,000 [19,944] 165,078 1,204,388 445,729 445,729 1,650,117 [1 ,600,000] 10,000 [1 ,590,000] 60, 117 [183,656] Unreserved fund balance, December 31 $ 21,595 $ 145,134 $ 145,134 $ (123 ,539] See independent auditor's report on the financial statements. 94 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 95 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31 , 2017 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 919,455 $ 2,084,615 Inventory and prepaid supplies Total current assets 919,455 2,084,615 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 919,455 2,084,615 Deferred outflows of resources: Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 919,455 $ 2,084,615 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 80 $ 33,642 Current portion of compensated absences payable Current portion of accrued claims payable 177,141 395,691 Total current liabilities (payable from current assets) 177,221 429,333 Noncurrent liabilities: Compensated absences payable Accrued claims payable 44,772 Net pension liability Total noncurrent liabilities 44,772 Total liabilities 221,993 429,333 Deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 221 ,993 $ 429,333 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 697,462 1,655,282 Total net position $ 697,462 $1,655,282 See independent auditor's report on the financial statements. 96 Total Internal Central Service Garage Funds $ 45,763 $ 3,049,833 165,125 165,125 210,888 3,214,958 184,326 184,326 160,966 160,966 23,360 23,360 234,248 3,238,318 31,240 31,240 31,240 31,240 $265,488 $ 3,269,558 $ 24, 168 $ 57,890 28,707 28,707 572,832 52,875 659,429 24,863 24,863 44,772 165,559 165,559 190,422 235,194 243,297 894,623 11,338 11,338 11 ,338 11,338 $ 254,635 $ 905,961 $ 23,360 $ 23,360 [12,507) 2,340,237 $ 10,853 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31 , 2017 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 298,628 $ 6,809,860 $ 1,215,447 Miscellaneous 2,197 32,507 6,482 Total operating revenues 300,825 6,842,367 1,221,929 Operating expenses General government 356, 171 6,503,682 1,349,966 Depreciation 9,260 Total operating expenses 356, 171 6,503,682 1,359,226 Operating income [loss] [55,346) 338,685 [137,297) Nonoperating revenues [expenses) Investment revenue 3,080 10,586 Gain/[loss] on disposal of fixed assets [4,044] Total other operating revenues [expenses] 3,080 10,586 [4,044] Income [loss] before transfers [52,266] 349,271 [141,341] Transfers from [to] other funds Transfers in 130,000 Transfers [out] Total transfers 130,000 Change in net position [52,266] 349,271 [11 ,341] Net position, January 1 749,728 1,306,011 22,194 Net position, December 31 $ 697,462 $ 1,655,282 $ 10,853 See independent auditor's report on the financial statements. 97 Total Internal Service Funds $ 8,323,935 41,186 8,365,121 8,209,819 9,260 8,219,079 146,042 13,666 [4,044] 9,622 155,664 130,000 130,000 285,664 2,077,933 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2017 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 265,387 $6,911 ,218 Cash paid to suppliers of goods or services [356,091] [6,470,040] Cash paid to employees Other operating receipts 2,197 32,507 Net cash provided by [used in] operating activities [88,507] 473,685 Cash flows from investing activities Interest received 3,080 10,586 Cash flows from capital and related financing activities Proceeds from sale of capital assets Net cash provided by [used in] capital Cash flows from noncapital financing activities Transfers in Transfers [out] Net cash provided by [used in] noncapital financing activities Net increase [decrease] in cash and cash equivalents [85,427] 484,271 Cash and cash equivalents, January 1 1,004,882 1,600,344 Cash and cash equivalents, December 31 $ 919,455 $ 2,084,615 See independent auditor's report on the financial statements. 98 Total Internal Central Service Garage Funds $1,215,448 $ 8,392,053 [1 ,049,688] [7 ,875,819] [275,772] [275,772] 6,481 41, 185 [103,531] 281 ,647 13,666 130,000 130,000 130,000 130,000 26,469 425,313 19,294 2,624,520 $ 45,763 $ 3,049,833 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2017 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Central Reserve Insurance Garage Total Internal Service Funds Operating income [loss] $ [55,346] $ 338,685 $ [137,297] $146,042 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows Net cash provided by [used in] operating activities 80 33,642 [33,241] 101,358 $ [88,507) $473,685 See independent auditor's report on the financial statements. 99 9,260 9,260 24,761 24,761 [1,162] [1,162] [13,704] 20,018 14,065 14,065 [234] [234] 68, 117 780 780 $ [103,531) $ 281,647 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use in investigations. Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. DTF federal forfeiture fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund -To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund -To account for funds being held in escrow for bonds issued by Municipal Court. 100 Special Fire Assessment Insurance Escrow Proceeds ASSETS: Cash and investments 90,849 $ 18,869 Total assets $ 90,849 $ 18,869 LIABILITIES: Accounts payable $ 90,849 $ 18,869 Total liabilities 90,849 $ 18,869 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December 31 , 2017 Court Police Section DTF Payroll Bond and Investigation 125 Federal Clearing Restitution Account ~ Plan Forfeiture $ (365,473] $ 23,818 ~ $ 94,580 $291,014 $ 3696 $ [365,473] $ 23,818 ~ $ 94,580 $291 014 $ 3696 $ [365,473] $ 23,818 ~ $ 94,580 $291 ,014 $ 3,696 $ [365,473] $ 23,818 ~ $ 94,580 $291,014 $ 3,696 See independent auditor's report on the financial statements. 101 Beechcratt Bail DTF DTF Remedition Bond l.291! Reserve Settlement Escrow Totals $47,216 $26,299 $ 154,181 $1,127 $389,555 $47,216 $26,299 $ 154181 $1127 $389,555 $47,216 $26,299 $ 154,181 $1 127 $ 389,555 $47,216 $26,299 $ 154,181 $1 ,127 $ 389,555 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31 , 2017 Balance December 31 , 2016 Additions Deductions Cash and investments Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing (320,981] Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11 ,963 DTF Local 101 ,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total Assets $ 268,293 $ 686,875 $ Accounts Payable Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing [320,981] Court Bond and Restitution 34,525 Police Investigation Account 3,378 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11 ,963 DTF Local 101 ,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total liabilities $ 268,293 $ 686,875 $ See independent auditor's report on the financial statements. 102 - 35,239 44,492 10,707 56 ,795 348,396 8,274 54 ,710 7,000 565,613 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 Balance December 31 , 2017 $ 90,849 18,869 [365,473] 23,818 3,379 94,580 291 ,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 $ 90 ,849 18,869 [365,473] 23,818 3,379 94,580 291 ,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year ~ '2Ql! 2010 2011 illl 2013 2014 2015 2016 2017 Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental act1vtt1es Net Investment in capital assets $118,965 93% $101.974 85% $113.001 96% $109,289 93% $112,929 94% $116,585 90% $ 115,589 90% $ 130.401 122% $124.635 108% $ 129,921 105% Restricted 1,212 1% 1.174 1% 986 1% 1,712 1% 1,082 1% 1,210 1% 676 1% 1,224 1% 1,738 1% 2,012 2% Unrestricted ~ 6% 16,706 14% ~ 3% ~ 5% ----22.!.! 5% ~ 9% ~ 9% ___fil.fil) -23% ~ -9% _JW1) -7% Total governmental activities net position $127 922 100% ~ 100% !1.1Lill. 100% $117 334 100% $119 522 100% $129 423 100% $ 127 678 100% $ 106 703 100% $115 868 100% $123 701 100% Business-type activities Net investment in capital assets $ 45,931 79% $ 48,234 79% $ 46.078 75% $ 44,227 63% $ 50,857 69% $ 57,103 75% $ 61.721 75% $ 68.107 80% $ 62,427 71% $ 63,316 71% Restricted 1,211 2% 1,553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% Unrestricted ~ 19% ~ 19% 14.306 22% ~ 35% 21,450 29% 17,794 23% ~ 24% ~ 18% 23,621 27% 24 255 27% Total business-type activities nel position $ 58 339 100% ~ 100% $ 63 937 100% $ 70 308 100% $ 73 860 100% $ 76 450 100% $ 82 778 100% ~ 100% ~ 100% $ 89 083 100% Primary government Net investment in capital assets $164,896 89% $150,208 63% $161,080 69% $153,516 62% $163,786 65% $173,688 84% $ 177,311 84% $ 198,508 103% $187,062 92% $193,237 91% Restricted 2,423 1% 2,727 2% 2,541 1% 3,216 2% 2.635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% Unrestricted ~ 10% ~ 16% ~ 10% ~ 16% ~ 14% ~ 14% ~ 15% ~ -5% ~ 6% ~ 6% Total primary government net position $186 261 100% ~ 100% ~ 100% $187 599 100% ~ 100% $205,873 100% $ 210 658 100% $ 191 932 100% ~ 100% ~ 100% Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 103 Expenses Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long term debt Total governmental activities expenses Business-type activities: Solid waste disposal Water and sewer Sanitation Golf course Total business-type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services Solid waste disposal Water and sewer Sanitation Golf course Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense) Revenue Governmental activities Business-type activities Total primary government net expense $ 6,791 18,440 9,706 1,310 5,582 3,481 ~ 46 764 2,008 13,284 2,184 ~ 4,581 $ 3,588 120 39 2,139 240 3,752 Schedule 2 City of Salina. Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) 14,664 16,539 9,781 1,390 5,397 3,375 2,287 12,995 2,224 897 4,599 2,913 164 42 1,936 267 3,163 10,845 18,592 9,782 1,365 8,572 3,716 ~ ~ 3,010 14,050 2,261 _____lli_ 5,143 3,969 198 37 2,817 144 3,415 13,614 18,579 9,858 1,368 6,693 3,450 ~ ~ 2,945 13,597 2,261 ______ill. 6,106 3,766 262 43 3,140 153 2,907 Fiscal Year 2012 2013 11,278 19,066 10,957 1,383 5,338 3,362 ~ 2,067 14,897 2,441 ____ill_ 6,328 4,290 306 46 1,728 158 4,495 10,978 19,649 11,064 1,369 4,809 3,399 ~ 3,532 15,418 2,237 ~ 5,548 4,656 277 34 1,466 161 4,200 12,550 20,208 11,401 347 10,743 21,084 9,049 995 5, 156 6,517 3,236 1,915 ~ ----1.ill. 1,870 14,904 2,399 ~ 1,766 11,712 1,909 ____jg! 16,208 5,662 $ 4,222 255 3,151 4,600 193 46 1,501 73 3,394 46 1,533 167 4,015 $ 9,188 22,232 9,773 1,095 6,612 2,047 _____kill 2,335 14,807 2,043 _____lg 3,134 4,891 238 44 1,638 140 4,332 ~ $ 9,780 23,120 10,345 1,126 6,880 1,835 ----1E?. 2,365 15,650 2,178 ~ 3,470 4,601 348 50 1,541 91 4,541 14,458 13,084 15,723 ~ ~ 16 342 ~ ~ ~ 14 642 2,749 14,073 2,172 751 2,903 14,980 2,292 757 2,853 16,520 2,310 736 2,904 17,904 2,334 636 202 ~ 27 784 3,137 19,099 2,462 783 3,138 17,938 2,514 719 3,024 18,742 2,553 811 _____Ei 115 2,519 19,059 2,529 820 2,795 19,322 2,751 789 3,165 19,855 2,885 798 25,755 24,309 25,245 24,927 25,657 26 703 $ (32,306) $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,815) $ (39,119) $ (38,768) $ (40,169) ~~~~~~~~~~ $ (30,922) $ (35,533) $ (37,124) $ (30,679) $ (30,320) $ (34,525) $ (33.586) $ (30,400) $ (33,088) $ (34,511) General Revenues and Other Changes In Net Position Governmental activities: Taxes Property taxes, general purpose Property taxes. debt service Motor vehicle taxes Sales tax, general purpose Selective sales tax Other taxes Investment revenues Miscellaneous Transfers, net Total governmental activities Business-type activities: Investment revenues Miscellaneous Reimbursements Transfers, net Total business-type activities Total primary government Change In Net Position Governmental activities Business-type activities Total primary government 7,818 $ 1,529 1,195 11 ,986 2,589 5,747 805 9,019 1,711 1,135 11,669 3,380 5,791 277 812 505 ___ 6_0 ~ 300 118 242 352 $ 7,803 2,230 1,145 11,118 4,108 6,298 81 565 ___ 9_2 67 341 7,783 2,779 1,150 11,767 4,080 6,390 77 872 8,272 2,439 1,153 12,165 4,210 6,486 66 660 ~ ___ 3_0 84 330 79 434 8,031 2,362 1,200 12,260 4,281 6,630 67 9,918 ~ 49 279 ~ ~ ~ ~ ___@.Q) _iW1) 358 339 ---21§_ ~ ~ ~ 8,315 2,578 1,250 12,689 4,461 7,231 98 1,160 1 51 97 $ 8,242 $ 2,766 1,312 12,931 4,558 7,363 8,196 3,022 1,370 12,781 4,901 7,991 148 5,842 86 2,371 ~ 43,448 ----1&QQ_ 56 78 180 132 79 9,101 2,487 1,372 12,906 8,832 6,900 92 2,003 ~ 129 103 ___i1ill) ~ ~ 328~~~ $ 234 $ (4,320) $ (5,965) $ (3.738) $ (466) $ 8,869 $ (1,032) $ 4,329 9,083 $ 7,833 ~ ~ ~ ~ __fil1Q _____1Zg ~ ~ ~ ~ $ 1,976 ~ $ (3,368) $ 4 633 $ 5,644 $ 10,601 $ 4 525 $ 9,455 $ 11,339 $ 9,356 Source: City of Salina Comprehensive Annual Financial Reports. 2008 -2017 104 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2011 2008 2009 2010 (Note 1) 2012 2013 2014 2015 2016 2017 General Fund Reserved $ 274 $ 508 $ 99 $ $ $ $ $ $ $ Nonspendable 90 116 81 107 111 131 153 Restricted Committed Assigned 293 540 331 239 199 136 214 Unreserved/unassigned 5,756 4,580 3,518 3,454 3,172 3,138 3,908 4,530 4 765 6 516 Total general fund $ 6,030 $ 5,088 3,617 $ 3,837 $ 3,828 $ 3,550 $ 4,254 $ 4,840 $ 5,032 $ 6,883 Restatement 156 Restated fund balance $ 3,773 All other governmental funds Reserved $ 3,951 $ 11 ,092 $ 6,413 $ $ $ $ $ $ $ Nonspendable Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 Committed 127 (516) 7,486 9,886 8,695 14,284 10,072 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 Unreserved/unassigned 354 4,024 (1 ,130) (10,537) (6,823) (28) Total all other governmental funds $ 4,305 $ 15,116 $ 5,283 $ 8,061 $ 6,890 $ 14,078 $ 14,076 $ 1,570 $ 11,646 $ 14,876 Note 1: Prior year amounts have not been restated for the implementation of GASS Statement 54 in fiscal year 2011 . Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 105 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenues Taxes (see Schedule 5) $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 Intergovernmental 3,741 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 Special assessments 1,178 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 Licenses and permits 10 10 11 6 8 9 7 10 7 6 Charges for services 7,415 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 Investment revenue 490 210 64 69 47 40 59 47 142 79 Reimbursements 39 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 Miscellaneous 597 438 448 599 537 810 799 1,853 4,315 1,851 Total revenues 44,258 44,693 47,018 48,821 50,638 59,072 51 ,846 51 ,135 57,219 56,599 Expenditures General government 3,600 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 Public safety 17,945 17,883 18,229 18,118 18,564 19, 155 19,559 21,268 21 ,664 21 ,629 Public works 6,593 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 Public health and sanitation 1,276 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 Culture and recreation 5,142 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 Planning and development 3,377 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 Miscellaneous 32 Capital outlay 10,581 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 Debt service Principal 2,812 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 Interest 1,567 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 Deposit to escrow 107 92 Total expenditures 52,892 61 ,072 66 ,089 55,064 56,304 59,172 56,965 74,104 86 ,856 67,281 Other financing sources (uses) Bonds and notes issued 7,245 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34 ,892 11 ,490 Bond and note premium 80 1,369 47 23 60 185 302 369 1,503 95 Transfers in 2,823 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 Transfers out (2,763) (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3 ,913) (3,555) (4,160) Issuance costs Other 156 Total other financing sources (uses) 7,385 25,259 7,173 9,046 6,240 6,875 5,669 10,923 39,905 15,764 Net change in fund balance $ (1,250) $ 8,880 $ (11,898) $ 2,803 $ 574 $ 6,775 $ 550 $ (12,046) $ 10,268 $ 5,082 Debt service as a percentage of non-capital expenditures 12% 17% 21% 17% 28% 18% 18% 20% 50% 16% Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 106 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Real estate $ 9,084 $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10, 145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 Delinquent 263 760 278 274 245 248 235 279 246 210 Motor vehicle 1,120 1,135 1,145 1, 150 1,153 1,200 1,250 1,312 1,370 1,372 General sales 11,986 11,669 11,117 11 ,767 12, 165 12,260 12,689 12,931 12,781 12,906 Selective sales 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other taxes 5,747 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 Total taxes $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41 ,597 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 107 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Fiscal Estimated Total Assessed (Budget) Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Personal Pro~ert~ State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value (Note2) Market Value 2006 $ 296,537,399 $ 38,662,356 $ 17,624,030 $ 352,823,785 23.999 $ 49,367,870 $ 402, 191 ,655 $ 2,229, 131 ,633 18.04 2007 $ 321 ,695,326 $ 39,691 ,690 $ 16,530,171 $ 377,917,187 23.789 $ 50,551 ,299 $ 428,468,486 $ 2,416,543, 103 17.73 2008 $ 342,045,389 $ 35,089,042 $ 15,594,056 $ 392,728,487 23.959 $ 50,548,706 $ 443,277, 193 $ 2,612,229,468 16.97 2009 $ 356,678,712 $ 28,373,980 $ 14,929,456 $ 399,982, 148 25.886 $ 51 ,351 ,656 $ 451 ,333,804 $ 2,914,775,730 15.48 2010 $ 358,979,211 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 15.48 2011 $ 367,750,803 $ 19,918, 188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531,746 15.67 2012 $ 369,416,422 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884, 188,981 15.65 2013 $ 370,390,092 $ 17,769, 120 $ 16,948,264 $ 405, 107,476 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 15.71 2014 $ 376, 131,346 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 15.64 2015 $ 381 ,087,426 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531,741 15.66 2016 $ 389,872,825 $ 11 ,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51 ,833,505 $ 472,683, 104 $ 3,046,949,034 15.51 2017 $ 391 ,895,060 $ 11 ,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335, 124 $ 3,097,885, 103 15.28 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk 108 City of Salina Fiscal Debt Total (Budget) Operating Service City Year Millage Millage Millage 2008 20.047 3.912 23.959 2009 21.749 4.137 25.886 2010 20.082 5.773 25.855 2011 19.236 6.786 26.022 2012 20.326 5.946 26.272 2013 20.242 5.948 26.190 2014 20.539 6.388 26.927 2015 20.692 6.388 27.080 2016 19.950 7.361 27.311 2017 21 .694 5.909 27.603 Source: Saline County Treasurer Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Saline County Debt Total Operating Service County Operating Millage Millage Millage Millage 27.435 27.435 42.761 29.347 29.347 46.339 31.303 31 .303 45.341 31.432 31.432 45.818 32.576 32.576 47.127 34.823 34.823 47.133 37.895 37.895 46.599 38.047 38.047 44.088 38.275 38.275 44.465 37.508 37.508 44.069 USO 305 (2) Other (1) Debt Total Service USO Millage Millage Other 12.229 54.990 10.775 12.208 58.547 10.971 13.155 58.496 12.401 13.095 58.913 12.131 11.693 58.820 11 .989 11.516 58.649 12.135 11.517 58.116 12.941 11.517 55.605 13.305 11.655 56.120 13.293 11.674 55.743 13.299 (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Ex1ension District #3. Total 117.159 124.751 128.055 128.498 129.657 131.797 135.879 134.037 134.999 134.153 (2) A small portion of Salina is covered by USO 306, USO 307, or USO 400. Total Tax Rates are different in the areas covered by these jurisdictions. 109 Taxpayer Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Central Mall Realty Holding LLC Kansas Gas Service Sams Real Estate Business Trust/Walmart Menard Inc. Great Plains Manufacturing Union Pacific Wal-mart Real Estate Business Trust Southwestern Bell S&B Motels Individual Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2007 (2006 Assessed Value) Assessed % of Total Type of Business Valuation Valuation Utility $ 7,287,074 2.17% Pizza Manufacturing 12,382,582 3.69% Regional Shopping Center Regional Shopping Center 9,003,313 2.69% Utility 2,633,187 0.79% Discount Retail Stores Home Improvement Manufacturing 2,308,375 0.69% Railroad Discount Retail Stores 3,627,525 1.08% Telephone Utility 4,783,821 1.43% Motel 2,388,908 0.71 % Residential 1,913,209 0.57% Hospital and Medical Offices 5,580,586 1.66% $ 51 ,908,580 $ 335,262, 182 15.48% 110 2016 (2015 Assessed Value) Assessed %of Rank Valuation Total Rank 3 $ 11,025,004 2.38% 7, 189,283 1.55% 4 N/A 5, 106,493 1.10% 2 2 4,496,340 0.97% 3 7 3,644,537 0.79% 5 N/A 2,526, 108 0.55% 6 N/A 25,066,064 5.41% 7 9 2,327,353 0.50% 8 N/A 2,288,512 0.49% 9 6 2,278,951 0.49% 10 5 8 10 4 $ 65,948,645 $ 463,030,260 14.24% Fiscal Taxes Levied (Budget) for the fiscal Year year 2008 $ 9,409,338 2009 $ 10,354,161 2010 $ 10,276,905 2011 $ 10,415,491 2012 $ 10,570,420 2013 $ 10,576,448 2014 $ 10,908,147 2015 $ 11 ,316,065 2016 $ 11 ,740,993 2017 $ 11 ,254,398 Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Delinquent Percentage Amount Percentage Collections ( 1) Amount of levy $ 9,083,917 96.5% $ 262,511 $ 9,346,428 99.3% $ 9,923,959 95.8% $ 759,764 $ 10,683,723 103.2% $ 9,704,937 94.4% $ 278,656 $ 9,983,593 97.1% $ 10,287,770 98.8% $ 273,843 $ 10,561 ,613 101.4% $ 10,411 ,299 98.5% $ 245,086 $ 10,656,385 100.8% $ 10, 145,404 95.9% $ 248,184 $ 10,393,588 98.3% $ 10,776,688 98.8% $ 398,820 $11 ,175,508 102.5% $ 10,460,246 92.4% $ 617,496 $11 ,077,742 97.9% $ 10,972,299 93.5% $ 245,577 $ 11 ,217,876 95.5% $ 11 ,239,051 99.9% $ 209,950 $ 11,449,001 101.7% (1 ) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 111 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2008 2009 2010 2011 0.50% 0.50% 0.50% 0.50% 0.25% 0.25%/0.4! 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 62.31 % 62.46% 61.58% 63.34% 2012 2013 2014 2015 2016 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 1.00% 61 .72% 60.86% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 112 2017 0.50% 0.40% 1.00% 60.28% #Accl1 R1teCla11 Biiied Re1identl1I 17,813 Commercl•I 1.591 lnduatrial ... Govemmenl "' Ap•rtment 182 School• 81 lndustri1l1peci1I Consumed in production 18 Rur11l-ter 1 Ho1pitals 15 Religious/non p1ofit "' Othe1 t1x1J»e deductions EngineerW!g 1tuch11 Providingt•x.bleserv1ee s1.1eorCOn'1>Q...entp•rts Fnhydrant lnduatNI com.urned in pfoductlon Siii-es of firm equipment 19,971 Wiler R•I• Sctwdul•: Monthly meter chlfge (518") Commodity ctllrge (per 000 g•I.) 0-2000g1t. 2001 -10.000 gal O...e110.000gal. E~ceHuw ctllrge Waatew1ter Rat• Schedule: Montht)'b1secharge Urilco1t(perOOOgal.): W.ter sold Is expressed Jn lhouunda of g1lons. Water ··~ 994,875 333,720 203,491 68,366 64,703 38,835 42,574 28,699 24,798 18,723 6,913 8,023 5,327 •,663 5.748 1,147 3,230 256 1,854,091 3.75 "" 2.31 2.07 3.51 2.63 #Accts Bllkd 17,792 1,589 " 104 182 " 1 " 13 39 19,893 W1te1 ··~ 1,043,774 339,507 152,910 41,793 71,503 39,815 32,934 26,223 22.824 20,488 7,312 6.176 ..... 5,200 1,032 2,314 205 1,818,879 .... 2.34 •.68 6,31 2,88 Numb4r of Accounh blled is tM ennu.I f'IUmber of bilings !or 11ch elau dlVlded by 12. Monthti meter cherge inc:reun v.ilh tM 11Ze of the meter. Schedule 11 Cltyol S•lln.1,K1n1M Water Sak.I by Cl.au ol Cu11omer t...11Ttof'l1c1IYHr1 2010 2011 2012 #Accts Water #Acct1 Water #Acct• Water ., ... ··~ Biiied Sold Bill•d Sold 17,838 1,127,864 17,899 1,194,629 17,893 1,225,931 1,568 350,633 1,574 372,499 1,505 38,547 " 183,166 180,277 " 174,595 85 42,714 97 55.910 .. 54,611!1 172 71,121 168 72,562 109 70.U3 85 46,386 85 53,679 81 57.027 44,457 "4,051 1 ''""' 17 32,604 13 22,728 " 19,266 1 23,854 1 28,621 1 25,930 12 18,503 10 15,674 10 17.896 39 5,569 38 5,690 38 5,399 ... ·~" 3,754 6,104 5,494 4,827 6.118 5,851 5,454 5.726 2,424 1,389 2,533 '.003 l,260 3,543 1 213 1 " 1 83 19,887 1.970,202 19,954 2,065.759 19,137 1,754,027 4.51 .. ... $4.74 2.55 $3,77 $3.88 5.10 $7.54 $7.76 6.42 $6.57 $6.77 3,08 $4,48 $4.61 Realdenti.1 W11leW1ter ~ celc""°ted b11ed ori W1nler Quarter ...,..ter eonsumpt10ri. Other a«ounts ire ba1ed on montnt.> -ter comumption. 2008 Wete1 Consumption Rate Struclll'e changed from 1 dec1uairig tier 1truclln to one rale •nd beeu Use Charge whlc:h it do~le the <:omurnpllon f•1e Source· City of S•Nna W.ter Customer Accounting Otriee. 2013 2014 2015 2016 2017 #Accll Wal.er #Acct1 Water #Ace-ls Water #Acct• Wiler #Acct• W1ter "'""' ··~ Biiied ··~ Billed ··~ Biiied ··~ Biiied Sold 17,966 969,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 1,579 348.968 1,599 353.675 1,600 350,767 1,603 345,232 1,606 345,250 "' 182,529 " 193.233 ... 202,407 " 191,238 ... 193.503 .. ....... 97 45.346 97 41,928 .. 45,136 .. 41,552 "' 67,155 "' 60.865 "' 61,400 "' 57,039 163 58,378 " «.187 " 45,328 85 45,545 85 41,176 83 36,039 1 20,439 12 18,665 " Hl,264 12 17,338 9,580 9,652 1 21,530 1 22,993 1 21,915 1 23.3&4 1 25,624 9 26.482 10 32,184 9 31,858 • 33.728 9 35,132 37 4,810 37 4,973 37 ..... " 5.224 38 4,749 6.822 5,095 4,807 4,573 4,772 """ 3.561 3,167 3.921 3,347 5.972 ..... 3,900 3.129 2.917 1.922 1,474 1.727 1.790 4,417 3,588 "'" 1,930 '""" 107 ... 53 1 54 104 20,018 1,1n.n1 20,111 1,801.577 20,153 1.nt,999 20,193 1,717.761 20.192 1,753,343 ..... $5.oJ $5.20 $5.36 SS.52 ..... $4.24 $4.45 ...... S<.n $8.08 ...... ..... $9.16 $9.54 $6,97 $7.11 $7.22 $7.36 $7.51 $4.79 ..... SS.01 $5,19 $5.29 Governmental Activities General Obligation Loans Capital Temporary Fiscal Year Bonds Pa:table Lease Notes 2008 $ 29,869,930 $ $ $ 5,005,000 2009 $52,067,590 $ $ $ 2010 $53,120,952 $ $ $ 2,500,000 2011 $ 55,225,670 $ $ $ 3,400,000 2012 $49,109,575 $ $ $ 1.485,000 2013 $49,631,797 $ $ $ 3,800,000 2014 $ 50,033,555 $ $176,235 $ 5,000,000 2015 $50,840,632 $ $479,366 $ 5,995,000 2016 $51,816,399 $12,157,127 $321.174 $11,505,000 2017 $55,994,305 $12,171,090 $157,868 $ 6,811 ,742 Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Business-T:t~e Activities General Water Obligation Revenue Loans Bonds Bonds Pa:table $2,780,069 $ 3,030,000 $ 6,428,759 $2,320,000 $ 2,320,000 $ 5,862,516 $8,614,576 $ 1,580,000 $ $7,417,907 $16,193,925 $ $9,613,926 $15,850,228 $ $8,519,799 $15,226,532 $ $9,587,351 $14,592,836 $ 6,208,102 $8,539,773 $13,949, 139 $ 5,753,620 $7,640,381 $13,285,443 $ 7.432,024 $6,520.433 $12,606,747 $ 8,862,810 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 114 Percentage Temporary Total Primary of Personal Notes Government Income Per Ca~ita $ $ 47,113,758 2.5% $1 ,014.12 $ $ 62,570,106 3.5% $1,346.09 $ $ 65,815,528 3.8% $1.425.20 $ $ 82,237,502 4.3% $1 ,723.80 $ $ 76,058,729 3.8% $1 ,583.07 $ $ 77,178,128 3.7% $1 ,613.05 $ $ 85,598,079 4.1% $1,788.25 $ $ 85,557,530 4.1% $1 ,789.42 $ $ 104,157,548 5.0% $2,200.39 $ $ 103,124,995 4.9% $2,194.43 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstandin!l General Percentage of Obligation Temporary Less Debt Net General Actual Taxable Fiscal Year Bonds Capital Lease Notes Total Service Fund Bonded Debt Value of Per Capita 2008 $ 32,649,999 $ $ 5,005,000 $ 37,654,999 $ 792,744 $ 36,862,255 8.3% $ 793.45 2009 $ 54,387,590 $ $ $ 54,387,590 $ 735,291 $ 53,652,299 11.9% $1 ,154.23 2010 $ 61 ,735,528 $ $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $1,378.60 2011 $ 62,443,577 $ $ 3,400,000 $ 65,843,577 $ 1,236,026 $64,607,551 14.4% $1,354.26 2012 $ 58,723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.2% $1,241 .05 2013 $ 58, 151,596 $ $ 3,800,000 $ 61,951,596 $ 707,763 $ 61 ,243,833 13.5% $1,280.02 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $ 64,389,277 14.1% $1,345.17 2015 $ 59 ,380 ,405 $ 479,366 $ 5,995,000 $ 65,854,771 $ 745,339 $65,109,432 14.1% $1,361 .75 2016 $ 59,456,780 $ 321,174 $ 11,505,000 $ 71 ,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 2017 $ 62,514,738 $ 157,868 $ 6,811 ,742 $ 69,484,348 $ 1,509,863 $67,974,485 14.4% $1,446.45 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 115 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2017 Net General Obligation Percentage Bonded Debt Applicable to Jurisdiction Outstanding City of Salina Direct: City of Salina $ 67,974,485 100.00% Overlapping: Salina Airport Authority 22 ,632,000 100.00% Saline County 145,000 75.08% USO 305 123,335,000 93.63% Total Overlapping Debt 146,112,000 Total Direct and Overlapping Debt $ 214,086,485 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 67,974,485 22,632,000 108,866 115,478,561 138,219,427 $ 206,193,912 $ 4,312.51 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 116 _egal Debt Margin Calculation for 2017 Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin 2QQ§ Debt limit 133,224,043 Total net debt applicable to limit 36,862,255 Legal debt margin 96,361,788 Total net debt applicable to the limit as a percentage of debt limit 28% $ 473,335, 124 142,000,537 103, 124,995 (6,520,433) (12,606,747) (157,868) (21,033,900) (1 ,509,863) 61,296, 184 80,704,353 ~ 135,400, 141 53 652,299 81,747,842 40% Schedule 15 City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years Fiscal Year 2010 2011 ~ 134,340,263 134,928,191 135,421 ,208 58,411 185 57 747 032 49 309 445 75,929,078 77,181,159 86,111 ,763 43% 43% 36% 117 2013 ~ 2015 2016 illl 136,196,966 136,896,083 138,909,078 141,804,931 142,000,537 52,724,034 54 625 691 56,090,293 62,072 485 61,296,184 83,472,932 82,270,392 82,818,785 $ 79,732,446 $80,704,353 39% 40% 40% 44% 43% Utility Service Fiscal Year Charges 2008 $ 14,072,513 2009 $ 14,980,874 2010 $ 16,520,055 2011 $ 17,905,056 2012 $ 19,098,626 2013 $ 17,938,288 2014 $ 18,742,029 2015 $ 19,058,855 2016 $ 19,322,077 2017 $ 19,855,033 Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Operating Net Available Expenses Revenue Principal $ 12,754,057 $ 1,318,456 $ 1,038,000 $ 12,524,390 $ 2,456,484 $ 1,276,243 $ 13,571 ,098 $ 2,948,957 $ 740,000 $ 12,963,891 $ 4,941 ,165 $ 1,580,000 $ 13,963,941 $ 5, 134,685 $ 340,000 $ 14,524,148 $ 3,414,1 40 $ 620,000 $ 14,002,088 $ 4,739,941 $ 630,000 $ 11 ,711 ,823 $ 7,347,032 $ 640,000 $ 13,981 ,811 $ 5,340,266 $ 660,000 $ 14,720,148 $ 5,134,885 $ 675,000 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 City of Salina Debt Service Schedules 118 Interest Coverage $ 515,459 85% $ 455,294 142% $ 91,450 355% $ 496,760 238% $ 596,992 548% $ 590, 191 282% $ 577,791 392% $ 565, 191 610% $ 549, 191 442% $ 529,391 426% Per Capita Personal Income Fiscal Year Population (Saline County) 2008 46,458 $ 40,351 2009 46,483 $ 38,392 2010 46,180 $ 37,880 2011 47,707 $ 40,512 2012 48,045 $ 41 ,762 2013 47,846 $ 43,078 2014 47,867 $ 43,736 2015 47,813 $ 44,065 2016 47,336 $ 44,230 201 7 46,994 $ 44,732 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Personal Income, Salina (interpolated) $ 1,874,626, 758 $ 1,784,575,336 $ 1,749,298,400 $ 1,932,705,984 $ 2,006,455,290 $ 2,061 ,109,988 $ 2,093,511 , 112 $ 2, 106,879,845 $ 2,093,647,612 $ 2, 102, 135,608 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USD 305 Rate City of Salina Headcount 3.8% 26,343 7,348 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,258 7,289 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 Personal income for Salina is derived from the population and per capita personal income for Saline County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education. Percentage As a % of Free and Per Capita .5 per capita Reduced City .5 cent cent sales personal Lunch sales tax Tax income 56.3% $ 5, 177,461 $ 111.44 0.276% 58.7% $ 4,965, 147 $ 106.82 0.278% 57.8% $4,803,553 $ 104.02 0.275% 58.7% $ 5,076,751 $ 106.42 0.263% 59.1% $ 5,241 ,205 $ 109.09 0.261% 60.7% $ 5,326,723 $ 111 .33 0.258% 61.3% $ 5,555,601 $ 116.06 0.265% 61.8% $5,670,040 $ 118.59 0.269% 68.7% $5,727,260 $ 120.99 0.274% 33.4% $5,755,869 $ 122.48 0.274% Increase in per capita Sales Tax (1 O years) 14.3% Increase in per capita Personal Income 20.5% Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 119 Employer Salina Regional Health Center Schwan's Global Supply Chain Unified School District No 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Wal mart Blue Philips Lighting Company Lock/line Raytheon Aircraft Eldorado National Total Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Type of Business Health Care Frozen Pizza Manufacturing Public School System Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing Manufacturing Retail Fluorescent Lamps Cellular Phone Insurance Aircraft Manufacturing Busses/Recreational Vehicle Employees 1,082 1,850 935 650 800 493 600 420 357 255 6,360 Source: Salina Chamber of Commerce Most recent Official Statement (EMMA) 120 2008 Rank #N/A 1 2 4 3 6 5 7 8 9 2017 Percentage Percentage of Labor of Labor Force Employees Rank Force 4.1 % 1,800 1 6.5% 7.0% 1,700 2 6.1% 3.5% 1,500 3 5.4% 2.5% 1,100 4 4.0% 3.0% 600 5 2.2% 1.9% 425 6 1.5% 300 7 1.1 % 250 8 0.9% 250 9 0.9% 2.3% 230 10 0.8% 1.6% 1.4% 1.0% 24.1 % 6,355 23.0% CITY OF SALINA, KANSAS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING DATED AS OF JULY 15, 2013 OMNIBUS CONTINUING DISCLOSURE UNDERTAKING THIS OMNIBUS CONTINUING DISCLOSURE UNDERTAKING (the "Disclosure Undertaking"), dated as of July 15, 2013, is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Disclosure Undertaking is executed and delivered by the Issuer, pursuant to a resolution adopted by the governing body of the Issuer to consolidate the continuing disclosure obligations of the Issuer with respect to the Bonds and the Prior Undertakings, both as defined below, to enhance efficiency of the administration of Prior Undertakings and promote timely disclosure by the Issuer. 2. The Issuer is executing this Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist each Participating Underwriter in complying with the SEC Rule, as defined below. The Issuer is the only "obligated person," as defined in the SEC Rule, with responsibility for continuing disclosure hereunder. 3. This Disclosure Undertaking shall apply with respect to any series of Bonds issued prior to the effective date hereof and subject to the SEC Rule. In consideration of the foregoing, the Issuer covenants and agrees as follows: Section l. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized term used in this Disclosure Undertaking, unless otherwise defined herein, the following capitalized tenns shall have the following meanings: "Annual Report" means any Annual Report filed by the Issuer pursuant to, and as described in, Section 2 of this Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the Financial Information and Operating Data. "Beneficial Owner" means, with respect to a series of Bonds, any registered owner of any Bonds of such series and any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds of such series (including persons holding Bonds through nominees, depositories or other intennediaries); or (b) is treated as the owner of any Bonds of such series for federal income tax purposes. "Bond Insurer" means the provider of the bond insurance policy, if any, for any series of Bonds. "Bond Resolution" means collectively the ordinance(s) and/or resolution(s) of the governing body of the Issuer authorizing the issuance of each series of the Bonds. "Bonds" means all bonds, notes, installment sale agreements, leases or certificates intended to be a debt obligation of the Issuer identified on Schedule 1 as such schedule may be supplemented and amended and, as context may require, the Bonds of any particular series identified on Schedule 1. The Issuer may make future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. "Business Day" means a day other than: (a) a Saturday, Sunday or legal holiday; (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the trustee, any paying agent or a Dissemination Agent, as applicable, is located are required or authorized by law to remain closed; or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Designated Agent" means Gilmore & Bell, P.C. or one or more other entities designated in writing by the Issuer to serve as a designated agent of the Issuer for purposes of this Disclosure Undertaking. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation substantially in the form attached hereto as Exhibit C. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Information" means the financial information of the Issuer described in Section 2(a)(l) hereof. "Fiscal Year" means the one-year period ending December 31, or such other date or dates as may be adopted by the Issuer for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units, as in effect at the time of the preparation of the Financial Information. "Issuer" means the City of Salina, Kansas, and any successors or assigns. "Material Events" means any of the events listed in Section 3(a) hereof. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the SEC Rule. "Official Statement" means collectively the Issuer's Official Statement(s) for each series of the Bonds, including all appendices and exhibits thereto. "Operating Data" means the operating data of the Issuer described in Section 2(a)(2) hereof. "Participating Underwriter" means each of the original underwriters of a series of Bonds required to comply with the SEC Rule in connection with the offering of such Bonds. "Prior Undertakings" means the prior continuing disclosure undertakings of the Issuer under the SEC Rule. "Repository" means the MSRB via EMMA. "SEC" means the Securities and Exchange Commission of the United States. "SEC Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. 2 "System" means the entire combined waterworks plant and system and sewerage plant and system owned and operated by the Issuer for the production, storage, treatment and distribution of water, and for the collection, treatment and disposal of sewage, to serve the needs of the Issuer and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the Issuer. Section 2. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ended in 2013, file with the Repository the Issuer's Annual Report, consisting of the Financial Information and Operating Data described as follows: (1) Financial Information. The financial statements of the Issuer and the System for such prior Fiscal Year, accompanied by an audit report resulting from an audit conducted by an Independent Accountant in conformity with generally accepted auditing standards. Such financial statements will be prepared on a modified accrual basis of accounting other than GAAP for all governmental funds, expendable trust and agency funds. The accrual basis of accounting is used for proprietary and nonexpendable trust funds. A more detailed explanation of the accounting basis is contained in Appendix A of the Official Statement. If such audit report is not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain summary unaudited financial information and the audit report and accompanying financial statements shall be filed in the same manner as the Annual Report promptly after they become available. The method of preparation and basis of accounting of the Financial Infonnation may not be changed to a basis less comprehensive than contained in the Official Statement, unless the Issuer provides notice of such change in the same manner as for a Material Event under Section 3(b) hereof. (2) Operating Data. Updates as of the end of the Fiscal Year of certain financial information and operating data described in Exhibit A, with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer; provided, any substantive change to infonnation provided shall be effected only in accordance with Section 6 hereof. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the SEC Rule), which have been filed with the Repository, the MSRB or the SEC. If the document included by reference is a final official statement, it must be available from the Repository. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audit report and accompanying financial statements may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(b). (b) From and after such time that Section (b)(5) of the SEC Rule applies to any series of Bonds, if the Annual Report is not filed within the time period specified in subsection (a) hereof, the Issuer shall send a notice to the Repository in a timely manner, in substantially the form attached as Exhibit B. 3 (c) Pursuant to Section (d)(3) of the SEC Rule, the provisions of Section 2(a)(I) hereof shall not apply to any Bonds with a stated maturity of 18 months or less. Section 3. Reporting of Material Events. (a) No later than 10 Business Days after the occurrence of any of the following Material Events, the Issuer shall give, or cause to be given, to the Repository notice of the occurrence of any of the following Material Events with respect to the Bonds, with copies to the Bond Insurer, if any: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; ( 4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Fonn 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) def easances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer or System (which shall be deemed to occur as provided in the SEC Rule); (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or System or the sale of all or substantially all of the assets of the Issuer or System, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional paying agent or trustee or the change of name of the paying agent or trustee, if material. (b) Notwithstanding the foregoing, notice of Material Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. 4 Section 4. Dissemination Agent. (a) General. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as Dissemination Agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Disclosure Undertaking. (b) Annual Reports. Except as provided in Section 2(c) hereof, if a Dissemination Agent is appointed, not later than 15 Business Days prior to the date specified in Section 2(a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent or the Repository. The Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been filed pursuant to this Disclosure Undertaking, stating the date it was filed, or that the Issuer has certified to the Dissemination Agent that the Issuer has filed the Annual Report with the Repository. Except as provided in Section 2(b) hereof, ifthe Dissemination Agent has not received an Annual Report or has not received a written notice from the Issuer that it has filed an Annual Report with the Repository, by the date required in Section 2(a), the Dissemination Agent shall send a notice to the Repository in substantially the form attached as Exhibit A . (c) Material Event Notices. (1) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 4(c)(3). (2) Whenever the Issuer obtains knowledge of the occurrence of an event, because of a notice from the Dissemination Agent pursuant to Section 4(c)(l) or otherwise, the Issuer shall promptly determine if such event constitutes a Material Event and shall promptly notify the Dissemination Agent of such determination. If appropriate, such writing shall instruct the Dissemination Agent to report the occurrence pursuant to Section 4(c)(3). (3) If the Dissemination Agent has been given written instructions by the Issuer to report the occurrence of a Material Event pursuant to Section 4(c)(2), the Dissemination Agent shall promptly file a notice of such Material Event with the Repository and provide a copy thereof to the Issuer and the Bond Insurer. Notwithstanding the foregoing, notice of Material Events described in Sections 3(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Bonds pursuant to the Bond Resolution. ( d) Duties, Immunities a11d Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Undertaking, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of 5 the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Undertaking. (e) Other Designated Agents. The Issuer may, from time to time, appoint or designate a Designated Agent to submit Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer hereby appoints the Dissemination Agent and the Designated Agent(s) solely for the purpose of submitting Issuer-approved Annual Reports, Material Event notices, and other notices or reports pursuant to this Disclosure Undertaking. The Issuer may revoke this designation at any time upon written notice to the Designated Agent. Section 5. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Undertaking for a particular series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of that series of Bonds. If the Issuer's obligations hereunder are assumed in full by some other entity as permitted in the Bond Resolution, such person shall be responsible for compliance with under this Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or assumption occurs prior to the final maturity of such Bonds, the Issuer shall give notice of such termination or assumption in the same manner as for a Material Event under Section 3 (b). Section 6. Bonds Subject to this Disclosure Undertaking; Amendment; Waiver. (a) All outstanding Bonds as of the date of this Disclosure Undertaking shown on Schedule I are hereby made subject to this Disclosure Undertaking. The Issuer may make any future series of Bonds subject to this Disclosure Undertaking by incorporating by reference in a Bond Resolution or executing a certificate to such effect in conjunction with the issuance of such series of Bonds. (b) All references to the "Bonds" in this Disclosure Undertaking shall apply separately to each series of Bonds that are or become subject to this Disclosure Undertaking, without further amendment hereto. (c) Notwithstanding the provisions of subsection (d) or anything else contained in this Disclosure Undertaking to the contrary, in conjunction with the public offering of any series of Bonds, the Issuer and the Dissemination Agent may amend the categories of Operating Data to be updated as set forth in Section 2(a){2) and Exhibit A to conform to the operating data included in the final Official Statement for such series of Bonds, in conformance with the requirements and interpretations of the SEC Rule as of the date of such final Official Statement, without further amendment to this Disclosure Undertaking. Thereafter, the Operating Data to be filed by the Issuer with the Repository with respect to the Bonds (and all other series of Bonds then subject to this Disclosure Undertaking) shall be deemed to be amended to reflect the requirements of the revised Exhibit A for the new series of Bonds. (d) Except as otherwise provided in subsection {c), the Issuer may amend this Disclosure Undertaking and any provision of this Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the SEC Rule and all current amendments thereto and interpretations thereof that are applicable to this Disclosure Undertaking; provided, however, that this Disclosure Undertaking, including Schedule I hereto, may be amended for the purpose of (1) extending the coverage of this Disclosure Undertaking to any additional series of Bonds or (2) removing reference to any series of Bonds for which the Issuer's reporting obligations have terminated in accordance with Sectio11 5 hereof, each without the provision of a written opinion as otherwise required by this paragraph. 6 ( e) If a provision of this Disclosure Undertaking is amended or waived with respect to a series of Bonds pursuant to subsection (d), the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, ifthe amendment relates to the accounting principles to be followed in preparing financial statements: (1) notice of such change shall be given in the same manner as for a Material Event under Section 3(b); and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under this Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Noncompliance. In the event of a failure of the Issuer or the Dissemination Agent, if any, to comply with any provision of this Disclosure Undertaking with respect to a series of Bonds, any Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or the Dissemination Agent, if any, as the case may be, to comply with its obligations under this Disclosure Undertaking. Noncompliance with the provisions of this Disclosure Undertaking shall not be deemed an Event of Default under the Bond Resolution or the Bonds, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Issuer or the Dissemination Agent, if any, to comply with this Disclosure Undertaking shall be an action to compel performance. Section 9. Notices. Any notices or communications to or among the parties referenced in this Disclosure Undertaking shall be given the Notice Representatives at the Notice Addresses set forth in the Bond Resolution for each series of Bonds; provided notice to the Dissemination Agent shall be given at the Notice Address set forth on Exhibit C hereto. Section 10. Electronic Transactions. Actions taken hereunder and the arrangement described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Dissemination Agent, if any, each Participating Underwriter and Beneficial Owners from time to time with respect to a series of Bonds, and shall create no rights in any other person or entity. Section 12. Severability. If any provision in this Disclosure Undertaking, the Bond Resolution or the Bonds relating hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Disclosure Undertaking shall not in any way be affected or impaired thereby. 7 Section 13. Governing Law. This Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [BALANCE OF THIS PAGE INTENTIONALLY LEFf BLANK] 8 CITY OF SALINA, KANSAS Mayor Shandi Wicks, CMC, Deputy City Clerk (Signature Page tn Continuing Di sc lnsurc lJ11,k11aki11g) SCHEDULE I DESCRIPTION OF BONDS SUBJECT TO DISCLOSURE UNDERTAKING General Obligation Bonds (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Internal Improvement Bonds, Series 2008-B General Obligation Internal Improvement Bonds, Series 2009-A General Obligation Refunding and Improvement Bonds, Series 2010-A General Obligation Refunding Bonds, Series 2010-B General Obligation Internal Improvement Bonds, Series 2011-A General Obligation Internal Improvement Bonds, Series 2012-A General Obligation Refunding Bonds, Series 2012-B General Obligation Taxable Improvement Bonds, Series 2013-A General Obligation Internal Improvement Bonds, Series 2013-B General Obligation Internal Improvement Bonds, Series 2014-A General Obligation Refunding & Internal Improvement Bonds, Series 2015-A General Obligation Internal Improvement Bonds, Series 2016-A General Obligation Refunding Bonds, Series 2016-B General Obligation Internal Improvement Bonds, Series 2017-A General Obligation Internal Improvement Bonds, Series 2018-A Dated Date 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-26-16 07-26-16 07-27-17 11-27-18 Temporary Notes (Base CUSIP No.: 794743) Description of Indebtedness General Obligation Temporary Notes, Series 2018-2 Dated Date 11-27-18 Revenue Bonds (Base CUSIP No.: 794811) Description of Indebtedness Water and Sewage System Revenue Bonds, Series 201 1 S-1 Dated Date 04-15-11 Final Maturitv 07-01-28 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 Final Maturity 11-15-19 Final Maturity 10-01-31 EXHIBIT A OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The Operating Data in the sections and tables contained in the most recent Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) generally described as follows : Operating Data for General Obligation Bonds, Temporary Notes, Lease Obligations Financial Overview Tax Levies Assessed Valuation Estimated Actual Valuation Tax Collections Largest Taxpayers Operating Data for Revenue Bonds User Characteristics (number of users; percentage split between residential and other customers) Largest Users (top ten; name; business type; total cf billed; total dollars billed) User Trends (gallons of water metered; gallons of sewage treated; average number of customers) Current Water Rate Structures Current Sewage Rate Structure Historical and Projected Financials (but only updating historical financials) Outstanding System Indebtedness (Net Income, Debt Service, Bond Coverage, Additional Utility Debt Payments) Additionally, for obligations issued on or before November 1, 2018, the Issuer shall provide updates as of the end of the Fiscal Year for any material adverse changes in the portions of the final Official Statement concerning Property Valuations and Pension and Employee Retirement Plans. However, per Resolution 18-7618, such updates shall be required for obligations issued on or before November 1, 2018. A-1 EXHIBITB NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Name oflssuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series L_J, dated as of [Bonds Dated Date] Name of Obligated Person: City of Salina, Kansas Date of Issuance: [Bonds Closing Date] NOTICE IS GIVEN that the City of Salina, Kansas (the "Issuer") has not provided an Annual Report with respect to the above-named Bonds as required by the Issuer's Omnibus Continuing Disclosure Undertaking. The Issuer anticipates that the Annual Report will be filed by ____ _ Dated: -------- CITY OF SALINA, KANSAS By ___________ _ By ____________ , as Dissemination Agent cc: City of Salina, Kansas B-1 EXHIBITC ACCEPTANCE OF DISSEMINATION AGENT Name of Issuer: City of Salina, Kansas Name of Bond Issue: [Description of Bonds], Series L__], dated as of [Bonds Dated Date] Dissemination Agent: Notice Address of Dissemination Agent: -----------' having been duly appointed by the City of Salina, Kansas to act in the capacity of Dissemination Agent pursuant to the Disclosure Undertaking, to which this acceptance is attached, accepts such duties and responsibilities set forth therein. Dated: C-1 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON SEPTEMBER 17, 2018 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Present: Mayor Karl F. Ryan, Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges and Mike Hoppock. Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) Thereupon, there was presented for first reading an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Thereupon, Commissioner Davis moved that said Ordinance be approved on first reading. The motion was seconded by Commissioner Hay, Jr. Said Ordinance was duly read and considered, and upon being put, the motion for approval was carried by the vote of the governing body, the vote being as follows: Aye: Mayor Karl F. Ryan, Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges and Mike Hoppock. Nay: None. ************** [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Other Proceedings) ************** CERTIFICATE City Clerk (Signature Page to Excerpt of Minutes -2018-A) EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON NOVEMBER 5, 2018 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Present: Mayor Karl F. Ryan (Presiding), Commissioners Trent Davis, Joe Hay, Jr., Mike Hoppock. Absent: Melissa Rose Hodges. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Finance Director reported that pursuant to the Notice of Sale duly given, bids for the purchase of General Obligation Internal Improvement Bonds, Series 2018-A, dated November 27, 2018, of the City were received on November 1, 2018. A tabulation of said bids is set forth as EXHIBIT A hereto. The Finance Director reported that staff determined that the bid of Bernardi Securities, Inc., Chicago, Illinois, was the best bid for the Bonds, a copy of which is attached hereto as EXHIBIT B. Based on the authorization contained in Resolution No. 18-7613 the Mayor previously executed the bid form. Thereupon, there was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Thereupon, Commissioner Davis moved that said Ordinance be passed. The motion was seconded by Commissioner Hoppock. Said Ordinance, having been approved by a first reading on September 17, 2018, was duly read and considered, and upon being put, the motion for the passage of said Ordinance was carried by the vote of the governing body, the vote being as follows: Aye: Mayor Karl F. Ryan (Presiding), Commissioners Trent Davis, Joe Hay, Jr., Mike Hoppock Nay: Thereupon, the Mayor declared said Ordinance duly passed and the Ordinance was then duly numbered Ordinance No. 18-10976 was signed and approved by the Mayor and attested by the Clerk and the Ordinance or a summary thereof was directed to be published one time in the official newspaper of the City. Thereupon, there was presented a Resolution entitled: A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 18-10976 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. Thereupon, Commissioner Hoppock moved that said Resolution be adopted. The motion was seconded by Commissioner Hay. Said Resolution was duly read and considered, and upon being put, the motion for the adoption of said Resolution was carried by the vote of the governing body, the vote being as follows: Aye: Mayor Karl F. Ryan (Presiding), Commissioners Trent Davis, Joe Hay, Jr., Mike Hoppock Thereupon, the Mayor declared said Resolution duly adopted and the Resolution was then duly numbered Resolution No. 18-7617 and was signed by the Mayor and attested by the Clerk. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 On motion duly made, seconded and carried, the meeting thereupon adjourned. CERTIFICATE (Signature Page to Excerpt ofMinutes-2018-A) EXHIBIT A BID TABULATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A A-1 0:03 p.m. COST I Results Parity C..lendar 1 Upcoming Calendar L Overview l9-Jmpare I Summary J Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A The following bids were submitted using PARfT'IB> and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. TIC L 3.191699 L 3.287238 u 3.368821 C.J L; In . •Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. 1r, 1~81-2002 i-Deal LLC, /\II rights reserverJ, Trademarks EXHIBITB BID OF PURCHASER B-1 PARITY Bid Form Page 1 of 2 · Upcoming Calendar Overview Result Excel Bernardi Securities, Inc. -Chicago , IL's Bid ~-~Cl~BlJRJ· F11ir'':·· .. -:.:::r i.,.,_ •• F.· Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2, 160,000.00, we will pay you $2,231,907.90, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e 1ver1• e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 4.0000 10/01/2020 115M 4.0000 10/01/2021 120M 4.0000 10/01/2022 125M 4.0000 10/01/2023 130M 4.0000 10/01/2024 130M 4.0000 10/01/2025 135M 4.0000 10/01/2026 140M 4.0000 10/01/2027 145M 4.0000 10/01/2028 150M 4.0000 10/01/2029 155M 4.0000 10/01/2030 165M 3.1500 10/01/2031 170M 3.2500 10/01/2032 175M 3.3500 10/01/2033 180M 3.4000 Total Interest Cost: $664, 191.44 Premium: $71 ,907.90 Net Interest Cost: $592,283.54 TIC: 3.191699 Total Insurance Premium: $0.00 Time Last Bid Received On :11/01/2018 12:58:59 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Bernardi Securities, Inc., Chicago, IL Contact: Gineen Destefano Title: Telephone:312-281-2019 Fax: 312-281-2039 Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https ://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi... 11/1/2018 PARJTY Bid Form Page 2 of2 Date: Date: (I © 1981 -2002 i-Deal LLC, All rights reserved, Trademarks https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi... 11 /1/2018 PARITY Bid Form Page 1 of2 Upcoming Calendar Overview J Result Excel Bernardi Securities, Inc. -Chicago , IL's Bid .=i~~QilFf j.f'Jrlf. Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2, 160,000.00, we will pay you $2,231,907.90, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e1ver1. e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 4.0000 10/01/2020 115M 4.0000 10/01/2021 120M 4.0000 10/01/2022 125M 4.0000 10/01/2023 130M 4.0000 10/01/2024 130M 4.0000 10/01/2025 135M 4.0000 10/01/2026 140M 4.0000 10/01/2027 145M 4.0000 10/01/2028 150M 4.0000 10/01/2029 155M 4.0000 10/01/2030 165M 3.1500 10/01/2031 170M 3.2500 10/01/2032 175M 3.3500 10/01/2033 160M 3.4000 Total Interest Cost: $664, 191.44 Premium: $71 ,907.90 Net Interest Cost: $592,283.54 TIC: 3.191699 Total Insurance Premium: $0 .00 Time Last Bid Received On : 11/01/2018 12:58:59 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Bernardi Securities, Inc., Chicago, IL Contact: Gineen Destefano Title: Telephone:312-281-2019 Fax: 312-281-2039 Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity Bi... 11/l /2018 City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2018-A YTM Call Date Call Price Dollar Price 2.844% 10/0112025 100.000% 2.996% 10/0112025 100.000% 3.118% 10/01/2025 100.000% 3.219% 10/01/2025 100.000% Reoffering Premium or (Disco_un_t~) __ ----· -------·----·-----------Gross Production Total Underwriter's DisCOLffi.l (0.875%)··----··----···--- 116,913.60 113,657.50 120,511.95 127,233.60 128,444.40 134,780.00 140,916.10 145,895.85 156,233.15 161,136.00 166,008.10 159,211.20 164,137.05 169,061.60 173,983.25 $2,178,123.35 $2,090,000.00 88,123.35 $2, 178, 123.35 Bid (103.341%) _ ----·-·------···-----··· ____ -·-·--- $(18,287 .50) 2,159,835.85 ··-·-----·--·-·--~~-- Total Purchase Price .... -----····----··· ---···-·----··---- Bond Year Dol=lars~--··· ···--·---.. ____ . ----·----····---- Average.Life .... ----·· ------·-··------··------···----- Average Coupon ··-·----··· ·-·--····-·----· -.. ·-·--------- Net Interest Cost (NIC) ·--------------· ___ _ True Interest Cost (TIC) Serles 2018-A resize I SINGLE PURPOSE I 11/ 112018 I 1:42 PM George K. Baum & Co. $2, 159,835.85 $17,754.89 8.495 Years 3.6457977% ----·-·-----·--- 3.2524646% 3.1940387% Public Finance (JB) Page 1 ORDINANCE NO. 18-10976 OF THE CITY OF SALINA, KANSAS PASSED NOVEMBER 5, 2018 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A ORDINANCE NO. 18-10976 AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to K.S.A. 12-685 et seq. and K.S.A. 12-6a01 et seq., and other provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the City has authorized the following improvements (the "Improvements") to be made in the City, to-wit: Project Description Grand Prairie Addition Phase II River Trail Second Addition Beechcraft Road Resolution No. Res. 16-7394 Res. 16-7365 Res. 17-7470 Authority K.S.A. 12-6a01 et seq. K.S .A. 12-6a01 et seq. K.S.A. 12-685 et seq. Total: Improvement Fund Deposit* $305,058.35 753,728.34 1,062,638.85 $2,121,425.54 •Improvement Fund deposit from bond proceeds; excludes costs of issuance and underwriter's discount. ; and WHEREAS, the governing body of the City is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the governing body of the City has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-6a01 et seq., and all as amended and supplemented from time to time. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation bonds. "Bond Resolution" means the resolution to be adopted by the governing body of the City prescribing the terms and details of the Bonds and making covenants with respect thereto. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2018-A, dated November 27, 2018, authorized by this Ordinance. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the City or, in the Clerk's absence, the duly appointed Deputy or Acting Clerk. "Finance Director" means the duly appointed and/or elected Finance Director or, in the Finance Director's absence, the duly appointed Deputy Finance Director or Acting Finance Director of the Issuer. "Improvements" means the improvements referred to in the preamble to this Ordinance and any Substitute Improvements. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "Refunded Notes" means a portion of the Series 2018-1 Notes maturing on December 1, 2018. "Series 2018-1 Notes" means the City's General Obligation Temporary Notes, Series 2018-1, dated July 30, 2018, in the aggregate principal amount of $6,000,000. "State" means the State of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City authorized in the manner set forth in the Bond Resolution. Section 2. Authorization of the Bonds. There shall be issued and hereby are authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series 2018-A, of the City in the principal amount of $2,090,000 for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) retire a portion of the Refunded Notes; and (c) pay the costs of issuance of the Bonds. Section 3. Security for the Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 4. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms , shall be subject to redemption and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed and 2 subject to the provisions, covenants and agreements set forth in the Bond Resolution hereafter adopted by the governing body of the City. Section 5. Levy and Collection of Annual Tax. The governing body of the City shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the City in the manner provided by law. The taxes and/or assessments above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the general ad valorem taxes of the City are levied and collected, shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due and the fees and expenses of the Paying Agent. The proceeds derived from said taxes and/or assessments shall be deposited in the Bond and Interest Fund. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the City and to reimburse said general funds for money so expended when said taxes and/or assessments are collected. Section 6. Further Authority. The Mayor, Clerk and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 7. Governing Law. This Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 8. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the governing body of the City, approval by the Mayor and publication (or a summary thereof) in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 the governing body of the City on November 5, 2018 and APPROVED AND Mayor Clerk (Signature Page to Bond Ordinance) PUBLICATION SUMMARY OF ORDINANCE NO. 18-10976, PASSED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE 5th DAY OF NOVEMBER, 2018 SUMMARY On November 5, 2018, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. 18- 10976, authorizing and providing for the issuance of $2,090,000 principal amount of General Obligation Internal Improvement Bonds, Series 2018-A, ofthe City of Salina, Kansas. The purpose of the issuance of the bonds is to provide funds to finance certain public improvements in the City and refund a portion of certain outstanding general obligation notes. In addition, the Ordinance provides for security of the bonds, terms, and details and conditions for the issuance of the bonds. The complete text of this ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's official website address, www.salina-ks.gov, where a reproduction of the original ordinance will be available for a minimum of one week following this summary publication. · certified this .d,~y of November, 2018. Pub sh one time and return one Proofof Publication to the City Clerk and one to the City Attorney. I Publisher's Affidavit I, __ __..C,...h..,n_·s..,t;y,_...F .... jn_k ____ , being duly sworn declare that I am a Legal Coordjnator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication .of attached notice, and that the Ordinance 18-10976 Summary Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of November9, \ Subscribed and sworn to before me, this day of A.D. 20 l.i_ Notary Public Printer's Fee $79.50 _,,., ""\ MELISSA WINDHW , H~iAI My Appl Exp. 3 -f {).Q (Pllblilhed ii .. Slh JMlel llMnllllft,2018) PIBJOOIOH DIMARY OF aaw«:E NO. IMGl78, PAS8B> BY nE OOVEllNNG BODY OF nE CITY OF SAl.tlA, =:a:Sll MYOF iSUWARY l()n ,........ 5, 2018. .,. a-nine lady ol .. 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Section 213. Section 301. Section 302. Section 303. Section 401. Section 402. Section 501. Section 502. Section 503. Notes. Section 504. Section 505. Section 506. Section 507. Section 601. TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................ 1 ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Authorization of the Bonds ......................................................................................... 8 Description of the Bonds ............................................................................................. 8 Designation of Paying Agent and Bond Registrar .................................................... 9 Method and Place of Payment of the Bonds .............................................................. 9 Payments Due on Saturdays, Sundays and Holidays ............................................. 1 O Registration, Transfer and Exchange of Bonds ...................................................... 1 O Execution, Registration, Authentication and Delivery of Bonds ........................... 11 Mutilated, Lost, Stolen or Destroyed Bonds ........................................................... 12 Cancellation and Destruction of Bonds Upon Payment ......................................... 12 Book-Entry Bonds; Securities Depository ............................................................... 12 Nonpresentment of Bonds ......................................................................................... 13 Preliminary and Final Official Statement. .............................................................. 14 Sale of the Bonds ........................................................................................................ 14 ARTICLE III REDEMPTION OF BONDS Redemption by Issuer ............................................................................................... 14 Selection of Bonds to be Redeemed .......................................................................... 14 Notice and Effect of Call for Redemption ............................................................... 15 ARTICLE IV SECURITY FOR BONDS Security for the Bonds ............................................................................................... 17 Levy and Collection of Annual Tax; Transfer to Debt Service Account. ............. 17 ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Creation of Funds and Accounts .............................................................................. 17 Deposit of Bond Proceeds ......................................................................................... 18 Application of Moneys in the Improvement Fund; Redemption of Refunded 18 Substitution of Improvements; Reallocation of Proceeds ...................................... 18 Application of Moneys in Debt Service Account. ................................................... 18 Application of Moneys in the Rebate Fund ............................................................. 19 Deposits and Investment of Moneys ........................................................................ 19 ARTICLE VI DEFAULT AND REMEDIES Remedies ..................................................................................................................... 20 Section 602. Section 603. Section 701. Section 801. Section 802. Section 901. Section 902. Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. Limitation on Rights of Owners ............................................................................... 20 Remedies Cumulative ................................................................................................ 20 ARTICLE VII DEFEASANCE Defeasance .................................................................................................................. 21 ARTICLE VIII TAX COVENANTS General Covenants .................................................................................................... 21 Survival of Covenants ............................................................................................... 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements .......................................................................................... 22 Failure to Comply with Continuing Disclosure Requirements ............................. 22 ARTICLE X MISCELLANEOUS PROVISIONS Annual Audit. ............................................................................................................. 22 Amendments .............................................................................................................. 22 Notices, Consents and Other Instruments by Owners ........................................... 23 Notices ......................................................................................................................... 24 Electronic Transactions ............................................................................................ 24 Further Authority ...................................................................................................... 24 Severability ................................................................................................................. 24 Governing Law .......................................................................................................... 25 Effective Date ............................................................................................................. 25 EXHIBIT A-FORM OF BONDS ............................................................................................................. A-1 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 11 RESOLUTION NO. 18-7617 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2018-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 18-10976 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously passed the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the City Commission of the Issuer (the "Governing Body") to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds; and WHEREAS, the Governing Body hereby finds and determines that it is necessary for the Issuer to authorize the issuance and delivery of the Bonds in the principal amount of $2,090,000 to pay a portion of the costs of the Improvements and refund the Refunded Notes. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms , associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S .A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-6a01 et seq., all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who, directly or indirectly has the investment power with respect to such Bonds. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar. "Bond Registrar" means the State Treasurer, and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" means the General Obligation Internal Improvement Bonds, Series 2018-A, authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee of DTC and any successor nominee ofDTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly appointed Deputy Clerk or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Bonds, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or expenses incurred in obtaining municipal bond insurance on the Bonds. "Dated Date" means November 27, 2018. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2018-A created within the Bond and Interest Fund pursuant to Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers. 2 "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; ( 4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Undertaking" means the Issuer's Omnibus Continuing Disclosure Undertaking, as may be amended and supplemented, relating to certain obligations contained in the SEC Rule. "DTC" means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed. "DTC Representation Letter" means the Blanket Letter of Representation from the Issuer and the Paying Agent to DTC which provides for a book-entry system, or any agreement between the Issuer and Paying Agent and a successor securities depository duly appointed. "Event of Default" means each of the following occurrences or events: 3 (a) Payment of the principal and of the redemption premium, if any, of any of the Bonds shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b) Payment of any installment of interest on any of the Bonds shall not be made when the same shall become due; or ( c) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution (other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Finance Director" means the duly appointed and/or elected Finance Director or, in the Finance Director's absence, the duly appointed Deputy Finance Director or Acting Finance Director of the Issuer. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the Governing Body to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve month period ending on December 31 . "Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501 hereof. "Governing Body" means the City Commission of the Issuer. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2018-A created pursuant to Section 501 hereof. "Improvements" means the improvements referred to in the preamble to the Ordinance and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April 1 and October 1 of each year, commencing April 1, 2019. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. 4 "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "Notice Address" means with respect to the following entities: (a) To the Issuer at: City of Salina, Kansas Attn: City Clerk 300 West Ash Salina, Kansas 67 402 Fax: (785) 309-5738 (b) To the Paying Agent at: State Treasurer of the State of Kansas Landon Office Building 900 Southwest Jackson, Suite 201 Topeka, Kansas 66612-1235 Fax: (785) 296-6976 ( c) To the Purchaser: Bernardi Securities, Inc. 20 S. Clark Street Chicago, Illinois 60603 (d) To the Rating Agency(ies): Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a) With respect to the Issuer, the Clerk. (b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services. 5 ( c) With respect to any Purchaser, the manager of its Municipal Bond Department. (d) With respect to any Rating Agency, any Vice President thereof. "Official Statement" means Issuer's Official Statement relating to the Bonds. "Ordinance" means Ordinance No. 18-10976 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Article VII hereof; and (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; ( c) direct obligations of the United States Government or any agency thereof; ( d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in ( c ); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); U) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (I) bonds of any municipality of the State as defined in K. S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under 6 escrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted or modified by amendments to applicable State law. "Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Bonds plus accrued interest to the date of delivery, plus a bid premium of $69,835.85 . "Purchaser" means Bernardi Securities, Inc., Chicago, Illinois, the original purchaser of the Bonds, and any successor and assigns. "Rating Agency" means any company, agency or entity that provides, pursuant to request of the Issuer, financial ratings for the Bonds. "Rebate Fund" means the Rebate Fund for General Obligation Internal Improvement Bonds, Series 2018-A created pursuant to Section 501 hereof. "Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" means, when used with respect to any Bond to be redeemed, the date fixed for the redemption of such Bond pursuant to the terms of this Bond Resolution. "Redemption Price" means, when used with respect to any Bond to be redeemed, the price at which such Bond is to be redeemed pursuant to the terms of this Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Notes" means a portion of the Series 2018-1 Notes maturing on December 1, 2018, in the aggregate principal amount of $6,000,000. "Replacement Bonds" means Bonds issued to the Beneficial Owners of the Bonds in accordance with Article II hereof. "SEC Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. "Securities Depository" means, initially, OTC, and its successors and assigns . "Series 2018-1 Notes" means the Issuer's General Obligation Temporary Notes, Series 2018-1 , dated July 30, 2018. "Special Record Date" means the date fixed by the Paying Agent pursuant to Article II hereof for the payment of Defaulted Interest. "Standard & Poor's" or "S&P" means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a 7 securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "State" means the state of Kansas. "State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Bond Resolution as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Substitute Improvements" means the substitute or additional improvements of the Issuer described in Article V hereof. "Treasurer" means the duly appointed and/or elected Treasurer of the Issuer or, m the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer. ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Section 201. Authorization of the Bonds. The Bonds have been previously authorized and directed to be issued pursuant to the Ordinance in the principal amount of $2,090,000, for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) retire a portion of the Refunded Notes; and (c) pay Costs oflssuance. Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in an Authorized Denomination, and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturities, subject to redemption and payment prior to their Stated Maturities as provided in Article III hereof, and shall bear interest at the rates per annum as follows: 8 SERIAL BONDS Stated Maturity Principal Annual Rate Stated Maturity Principal Annual Rate October 1 Amount of Interest October 1 Amount of Interest 2019 $115,000 4.000% 2027 $145,000 4.000% 2020 110,000 4.000 2028 150,000 4.000 2021 115,000 4.000 2029 155,000 4.000 2022 120,000 4.000 2030 160,000 3.150 2023 120,000 4.000 2031 165,000 3.250 2024 125,000 4.000 2032 170,000 3.350 2025 130,000 4.000 2033 175,000 3.400 2026 135,000 4.000 The Bonds shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204 hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar. Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent. 9 The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date. The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and at least annually shall forward a copy or summary of such records to the Issuer. Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Section 206. Registration, Transfer and Exchange of Bonds. The Issuer covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond Registrar as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any Authorized Denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature 10 satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Bonds. The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Article III hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Article II. The Issuer and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute Owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Bond Registrar. Section 207. Execution, Registration, Authentication and Delivery of Bonds. Each of the Bonds, including any Bonds issued in exchange or as substitutions for the Bonds initially delivered, shall be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Clerk, and the seal of the Issuer shall be affixed thereto or imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds in the manner herein specified, and to cause the Bonds to be registered in the office of the Clerk, which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Bonds shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bonds ceases to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond are the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. 11 The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Bond Registrar for authentication. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Bond Resolution. Upon authentication, the Bond Registrar shall deliver the Bonds to the Purchaser upon instructions of the Issuer or its representative. Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond under this Section, the Issuer and the Paying Agent may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Bond Resolution equally and ratably with all other Outstanding Bonds. Section 209. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer. Section 210. Book-Entry Bonds; Securities Depository. The Issuer and Paying Agent have entered into a DTC Representation Letter with DTC. The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraph. 12 The Issuer may decide, subject to the requirements of the Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in an Authorized Denominations and form as provided herein. Section 211. Nonpresentment of Bonds. If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, 13 who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four ( 4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 212. Preliminary and Final Official Statement. The Preliminary Official Statement dated October 24, 2018, is hereby ratified and approved. The Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor and Finance Director of the Issuer are hereby authorized to execute the Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the Issue Date. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of the SEC Rule and Rule G-32 of the Municipal Securities Rulemaking Board. Section 213. Sale of the Bonds. The sale of the Bonds to the Purchaser and the execution of the official bid form is hereby ratified and confirmed. Delivery of the Bonds shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoption of this Bond Resolution), upon payment of the Purchase Price. ARTICLE III REDEMPTION OF BONDS Section 301. Redemption by Issuer. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2026, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2025, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall determine. Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such 14 redemption a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of a minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar and the State Treasurer. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; ( d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and ( e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. 15 For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in tum, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Ow~er of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (1) the CU SIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; (4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. ( c) Each check or other transfer of funds issued for the payment of the Redemption Price of Bonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. 16 ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 402. Levy and Collection of Annual Tax; Transfer to Debt Service Account. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. The taxes and/or assessments referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a) Improvement Fund for General Obligation Internal Improvement Bonds, Series 2018-A. (b) Debt Service Account for General Obligation Internal Improvement Bonds, Series 201 8- A (within the Bond and Interest Fund). ( c) Rebate Fund for General Obligation Internal Improvement Bonds, Series 2018-A. 17 The Funds and Accounts established herein shall be administered m accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a) All accrued interest received from the sale of the Bonds, if any, shall be deposited in the Debt Service Account. (b) The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited in the Improvement Fund. Section 503. Application of Moneys in the Improvement Fund; Redemption of Refunded Notes. Moneys in the Improvement Fund shall be used for the sole purpose of: (a) paying the costs of the Improvements, in accordance with the plans and specifications therefor approved by the Governing Body and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable and approved by the Governing Body; (b) paying interest on the Bonds during construction of the Improvements; (c) paying Costs of Issuance; (d) retiring the Refunded Notes; and (e) transferring any amounts to the Rebate Fund required by this Article V. Upon completion of the Improvements, any surplus in the Improvement Fund shall be deposited in the Debt Service Account. Section 504. Substitution of Improvements; Reallocation of Proceeds. (a) The Issuer may elect for any reason to substitute or add other public improvements to be financed with proceeds of the Bonds provided the following conditions are met: (1) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the Governing Body in accordance with the laws of the State; (2) a resolution or ordinance authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the Governing Body pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution or ordinance to the transcript of proceedings for the Bonds to include the Substitute Improvements; and (4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law. (b) The Issuer may reallocate expenditure of Bond proceeds among all Improvements financed by the Bonds; provided the following conditions are met: (1) the reallocation is approved by the Governing Body; (2) the reallocation shall not cause the proceeds of the Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the 18 Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and Interest Fund. Section 506. Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code § 148( f) in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. ( c) Notwithstanding any other provision of this Bond Resolution, including in particular Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may, at the discretion of the Issuer, be credited to the Debt Service Account. 19 ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. 20 ARTICLE VII DEFEASANCE Section 701. Defeasance. When any or all of the Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Article III hereof. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed to execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer. Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full fore~ and effect notwithstanding the defeasance of the Bonds pursuant to Article VII hereof or any other provision of this Bond Resolution until such time as is set forth in the Federal Tax Certificate. 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Section 901. Disclosure Requirements. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Undertaking, the provisions of which are incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners. Notwithstanding the foregoing, pursuant to Section 6( c) of the Disclosure Undertaking and only with respect to any obligations issued on or after November 1, 2018 which are made subject to the Disclosure Undertaking (including the Bonds), Exhibit A to the Disclosure Undertaking shall be revised to provide that the Issuer is not obligated to provide updates as of the end of the Fiscal Year for any material adverse changes in the portions of the final Official Statement concerning Property Valuations and Pension and Employee Retirement Plans. Section 902. Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of this Bond Resolution, failure of the Issuer to comply with its covenants contained in the preceding section shall not be considered an Event of Default under this Bond Resolution. ARTICLEX MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the Governing Body shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Bond Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by ordinance or resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an 22 instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a) extend the maturity of any payment of principal or interest due upon any Bond; (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Bond; ( c) permit preference or priority of any Bond over any other Bond; or ( d) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by ordinance or resolution duly adopted by the Governing Body at any time in any legal respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or ordinance adopted by the Governing Body amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental ordinance or resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the ordinance or resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be 23 sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee' s right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed if the same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance of the Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1007. Severability. If any section or other part of this Bond Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Bond Resolution. 24 Section 1008. Governing Law. This Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 1009. Effective Date. This Bond Resolution shall take effect and be in full force from and after its adoption by the Governing Body. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 25 by the governing body of the Issuer on November 5, 2018. Mayor Clerk (Signature Page to Bond Resolution) EXHIBIT A (FORM OF BONDS) REGISTERED NUMBER REGISTERED $ Interest Rate: Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES 2018-A Maturity Date: Dated Date: November 27, 2018 CU SIP: 794744 REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 of each year, commencing April I, 2019 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on A-1 the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2018-A," aggregating the principal amount of $2,090,000 (the "Bonds") issued for the purposes set forth in the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer prescribing the form and details of the Bonds (collectively, the "Bond Resolution"). The Bonds are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., and K.S.A. 12- 6a01 et seq., as amended, and all other provisions of the laws of the State of Kansas applicable thereto. General Obligations. The Bonds constitute general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity, as set forth in the Bond Resolution. Book-Entry System. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer A-2 of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, TIDS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon payment of the charges therein prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issued in fully registered form in Authorized Denominations. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Bond Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of bonds, does not exceed any constitutional or statutory limitation. A-3 IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS (Facsimile Seal) By: ~~~~~(f;=ac=s=im~il~e)L--~~~~~~- Mayor ATTEST: By: ~~~~~(=fa=c=s1=·m=i=le~)~~~~~~~- Clerk A-4 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2018-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date _______ _ Registration Number: _________ _ Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent CERTIFICATE OF CLERK STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that the within Bond has been duly registered in my office according to law as of November 27, 2018. WITNESS my hand and official seal. (Facsimile Seal) By: ----~(f:=ac~s=im~il~el~------- Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ______ _ WITNESS my hand and official seal. (Seal) Treasurer of the State of Kansas A-5 BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of $ ____ __, standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do( es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises. Dated ________ _ Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: By _______________ ~ LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 (PRINTED LEGAL OPINION) A-6 TRANSCRIPT CERTIFICATE $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), do hereby make this certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described bonds (the "Bonds"); and do hereby certify as of November 5, 2018, as follows: 1. Meaning of Words and Terms. Capitalized words and terms used herein, unless otherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such words and terms in the hereinafter defined Bond Resolution authorizing the Bonds. 2. Organization. The Issuer is a legally constituted city of the first class organized and existing under the laws of the State of Kansas. 3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authorization and issuance of the Bonds is to the best of our know ledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript, and the facts stated in the Transcript still exist. In each and every instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. 4. Newspaper. The Salina Journal was the official newspaper of the Issuer at all times during these proceedings. 5. Meetings. All of the meetings of the governing body of the Issuer at which action was taken as shown in the Transcript were either regular meetings or duly adjourned regular meetings or special meetings duly called and held in accordance with law and the ordinances and rules of the Issuer. 6. Incumbency of Officers. The following named persons were and are the duly qualified and acting officers of the Issuer at and during all the times when action was taken as indicated in the Transcript as follows: Name Title Term of Office Karl F. Ryan Mayor January 8, 2018 to Present Kaye Crawford Mayor April 18, 2016 to January 8, 2018 Jon Blanchard Mayor April 20, 2015 to April 18, 2016 Karl Ryan Vice-Mayor April 18, 2016 to January 8, 2018 Jon Blanchard Commissioner April 15, 2013 to Present Trent Davis Commissioner September 8, 2014 to Present Karl Ryan Commissioner April 20, 2015 to Present Melissa Rose Hodges Commissioner January 9, 2017 to Present Joe Hay, Jr. Commissioner January 8, 2018 to Present Mike Hoppock Randall Hardy Shandi Wicks Lieu Ann Elsey Allison Strait Commissioner Commissioner Clerk Clerk Deputy Clerk January 8, 2018 to Present April 15, 2013 to January 8, 2017 March 10, 2014 to Present April 1, 2001 to December 16, 2013 August & September, 201 7 7. Execution of Bonds. The Bonds have been executed with facsimile signatures; and the facsimile signatures appearing on the face of the Bonds are facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer. Each signature has been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Bonds and on the reverse side of each of the Bonds at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Bonds bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen bond included in the Transcript is in the form adopted by the governing body of the Issuer for the Bonds. 8. Authorization and Purpose of the Bonds. The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., and K.S.A. 12-6a01 et seq., as amended, Ordinance No. 18-10976 and Resolution No. 18-7617 of the Issuer duly adopted by the governing body of the Issuer on November 5, 2018 (collectively, the "Bond Resolution") of the Issuer for the purpose of: (a) paying a portion of the costs of certain public improvements (the "Improvements"); and (b) retiring on December 1, 201 8 a portion of the following temporary notes of the Issuer, issued to temporarily finance the Improvements (the "Refunded Notes"): Description General Obligation Temporary Notes Series 2018-1 Dated Date July 30, 2018 Maturity Date December 1, 2018 Amount $6,000,000 The total principal amount of the Bonds does not exceed the cost of the Improvements for which the Bonds are issued. The interest rates on the Bonds on the date of the sale of the Bonds were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9. Bonded Indebtedness. The currently outstanding applicable indebtedness of the Issuer, including the Bonds, does not exceed any applicable constitutional or statutory limitations. A schedule of general obligation indebtedness is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. 10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer for the year 201 7 is $481,461 ,005 . 11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; (c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; ( e) the validity of the Bonds, or any of the proceedings had in relation to the 2 authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and interest on the Bonds. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 WITNESS our true and genuine manual signatures and the seal of the Issuer. 6~~~"' 1;,----' :S" 0 F s ,. '-'oJ, 7 c; ·······'•(,, . Vv •• ••• ••• ••• .;;~ /$/0t<.GANIZ£1J\'J7 ,, . . ~ -. . 5\ 1870 1:::::: b..... -·-... .E'J ~ (ilP..~) ..... ·· c; * Clerk (Signature page to Transcript Certificate -Bonds) EXHIBIT A SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of November 27, 2018) General Obligation Bonds: Date Series Purpose Amount Final Amount Issued of Issue Maturity Outstanding 12115/2008 2008-B Internal Improvements $3,525,000 7/112024 $1 ,035,000 7/15/2009 2009-A Internal Improvements 23,695,000 1011 /2020 2,845,000 51112010 2010-A Refunding & Improvement 6,875,000 1011 /2020 650,000 10/15/2010 2010-B Refunding 7,860,000 101112023 1,720,000 7115/2011 2011-A Internal Improvements 6,565,000 101112021 1,095,000 7115/2012 2012-A Internal Improvements 2,365,000 1011 /2027 1,495,000 7115/2012 2012-B Refunding 3,785,000 101112020 415,000 2/1 5/2013 2013-A Taxable Improvements 1,360,000 10/1/2028 995,000 711512013 2013-B Improvements 4,330,000 101112033 3,170,000 7/30/2014 2014-A Improvements 7,570,000 10/112034 5,240,000 7/29/2015 2015-A Revenue and Internal Imp. 6,825,000 101112035 5,860,000 7/27/2016 2016-A Internal Improvements 6,570,000 10/1/2036 6,060,000 7/27/2016 2016-B Refunding 13,750,000 10/1/2031 13,080,000 7/27/2017 2017-A Improvements 9,310,000 10/1/2037 9,135,000 11127/2018 2018-A Improvements 2,090,000 101112033 2,090,000 Total $54,885,000 Temporary Notes: Date Maturity Original Amount Series Issued Date Amount Outstanding 2016-2 7/20/2016 91112019 $4,615 ,000 $4,615,000 2018-1 7/30/2018 12/1 /2018 6,000,000 6,000,000(!) 2018-2 11 /27/2018 11115/2019 13,500,000 13,500,000 Total $18,115,000 (IJTo be redeemed with proceeds from the sale of the Series 2018-2 Notes, the Bonds or other available funds. CERTIFICATE OF MANUAL SIGNA11JRE OF THE CLERK OFTBE CITY OF SALINA, KANSAS IN THE OFFICE OF THE SECRETARY OF STATE OFTBE STATE OF KANSAS STATE OF KANSAS COUNTY OF SALINE ) ) SS. ) I, the undersigned, Shandi Wicks. being duly swom OD oath certify that I am the duly qualified Clerk of the City of Salina. Kansas, and that the signatw-e appearing below is my signature and I file herewith this certificate pursuant to K.S.A. 75-4001 to 15-4001, inclusive. Subscnl>cd and sworn to before me as of July 14, 2014. (SEAL) My commission expires: 'J,11f:t1 I-1 Shandi Wicks RECEIVED JUL 2 2 Z01' KRIS W. KOSACH SECRETARY OF STATE REGISTERED NUMBERR-1 REGISTERED $115,000.00 Interest Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE ~~-~..._ CITY OF SALINA GENERAL OBLIGATION INTERNAL SERIES 201 /A Maturity Rate: 4.000% Date: October 1, 20 CU SIP: 794744AXO PRINCIPALAMOUNT: ON " EEN THOUSAND DOLLARS E PRESENTS: That the City of Salina, in the County of Saline, State of Kansas r"), ti value received, hereby acknowledges itself to be indebted and promises to pay to t egist wner shown above, or registered assigns, but solely from the source and in the manner ci I , the Principal Amount shown above on the Maturity Date shown above, unless called for redem ion prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown al5 Y computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 of each year, commencing April 1, 2019 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2018-A," aggregating the principal amount of $2,090,000 (the "Bonds") issued for the purposes set forth,.)ti the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer pres 'bing the form and details of the Bonds (collectively, the "Bond Resolution"). The Bonds are · ®Cl bY. e authority of and in full compliance with the provisions, restrictions and limitations of t . <...Co tltli · nd laws of the State of Kansas, including K.S.A. 10-101 et seq., K.S.A. 10-620 et s ., KS.A. -685 et seq., and K.S.A. 12- 6a01 et seq., as amended, and all other provisions of the laW, o . e f'ate f 1.nsas applicable thereto. General Obligations. The Bonds constitute gene bliga "' s of the Issuer payable as to both principal and interest in part from special asse. v on the property benefited by the construction of the Improvements and, if not so .. id, al rem taxes which may be levied without limitation as to rate or amount upon all t e t ble gio property, real and personal, within the territorial limits of the Issuer. The balanc o he p icipa d interest on the Bonds is payable from ad valorem taxes which may be levied with .ut limitati,on s to rate or amount upon all the taxable tangible property, real and personal, within t te · orial li 'ts of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocab pie e rompt payment of the principal of and interest on the Bonds as the same become due. Redemption Pri forth in the Bond Reso . he Bonds are subject to redemption prior to maturity, as set Book-Entry · Bonds are being issued by means of a book-entry system with no physical distribution of bond ertificates to be made except as provided in the Bond Resolution. One Bond certificate with respe ·to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, TIDS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO .ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authori 'd Denomination of the same maturity and in the same aggregate principal amount shall be issued to the t sferee in exchange therefor as provided in the Bond Resolution and upon payment of the charge ~i cribed. The Issuer shall pay all costs incurred in connection with the issuance, payment .. nQ i tJ.a re · ration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer an ayin~ gent may deem and treat the person in whose name this Bond is registered on the Bond e a ;;e a "Solute owner hereof for the purpose of receiving payment of, or on account of, the p c.ipal de ption price hereof and interest due hereon and for all other purposes. The Bonds are I i;i in . · y registered form in Authorized Denominations. ecome obligatory for any purpose or be IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS By: ~ ,,,_Q 4-R c-_ Mayor ATTEST: ~·Jdu¥ By: ~~~~~~~~~~- Clerk CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2018-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date _______ _ Registration Number: 0322-085-112718-483 Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent CERTIFICATE OF CL STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) WITNESS my hand and official seal. , · does hereby certify that the within Bond ovember 27, 2018. ~·kioJr By: ~~~~~~~~~~~~~ Clerk RTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ______ _ WITNESS my hand and official seal. (Seal) Treasurer of the State of Kansas BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of $ , standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do( es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premi Dated ________ _ Name By _______________ ~ LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: Governing Body City of Salina, Kansas Bernardi Securities, Inc. Chicago, Illinois Re: and the certified proceedings, ce opinion. Capitalized terms resolution adopted by the GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 November 27, 2018 r,rovement Bonds, Series 2018-A, of 27,2018 aterial to our opinion, we have relied on the certified proceedings fficials and others furnished to us without undertaking to verify them Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3. The interest on the Bonds (including any original issue discount properly allocable to an owner of a Bond) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness r sufficiency of the Official Statement or other offering material relating to the Bonds (except to th extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax segue es arising with respect to the Bonds other than as expressly set forth in this opinion. · The rights of the owners of the Bonds and th bankruptcy, insolvency, reorganization, moratorium and ' !her generally and by equitable principles, whether considered a ~,/ This opinion is given as of its date, a 'we ssu opinion to reflect any facts or circumstances t a . ay o 'bligation to revise or supplement this our attention or any changes in law that may occur after the date of this opinion. AGREEMENT BETWEEN ISSUER AND AGENT $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL ™PROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 THIS AGREEMENT, dated as of November 27, 2018, between the City of Salina, Kansas, a municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent"). WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the above- captioned bonds (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Bond Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows : I. APPOINTMENT Issuer hereby appoints or has previously appointed the State Treasurer of Kansas to act as Paying Agent, Bond Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Bond Registrar and Transfer Agent. II. BASIC DUTIES A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and address( es) of the initial registered owner(s) of the Securities together with such registered owners' tax identification (social security) number(s), the maturity date(s), denomination(s) and interest rate(s) for each Security. B. Agent shall manually authenticate the originally issued Securities upon the written order of one or more authorized officers of Issuer. Thereafter, Agent shall manually authenticate all Securities resulting from transfer or exchange of Securities. C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be presented for registration, transfer and exchange; and shall also maintain an office in the City of Topeka, Kansas, where Securities may be presented for payment. Agent shall keep a register of the Securities and their transfer and exchange. D. Agent may rely upon any document believed by it to be genuine and to have been signed or presented by the proper person. Agent need not investigate any fact or matter stated in the document. Agent undertakes to perform such duties and only such duties set forth in K.S.A. 10-620 et seq., except as specifically provided in this Agreement. Agent shall notify the owners of the Securities upon default in payment of principal or interest on the Securities and the Agent shall have no duties or responsibilities thereafter. III. COMPENSATION Issuer covenants and agrees to pay to Agent, as reasonable compensation for the services provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $2,612.50. This amount will be due at the time of registration unless such fee is to be paid from the proceeds of the bond issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the bond issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. 10-505 for performing the duties of paying the principal of the Securities. IV. STANDARD OF PERFORMANCE Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securities are to be issued in certificated or uncertificated form, or both. A. STATEMENTS OF OWNERSHIP Agent agrees to provide Statements of Ownership to the owner ofuncertificated Securities. Such Statements shall be in accordance with the standards set forth by the Attorney General. All Statements shall be issued in the denominations of $1,000 or $5,000 or integral multiples thereof except for one additional Security in another denomination, which additional Security shall mature in the initial maturity year of the series of the Securities. Interest is computed on the basis of $1 ,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Agent shall at all times maintain an adequate supply of Statements of Ownership for any anticipated transfers or exchanges of the Statements. B. CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordance with the standards set forth by the Attorney General and unless otherwise authorized by Agent, the principal thereof shall be payable only upon surrender of the Security to Agent. All certificates shall be issued in the denomination of $1 ,000 or $5 ,000 or integral multiples thereof except one authorized Security in another denomination which additional Security shall mature in the initial maturity year of the series of Securities. Interest is computed on the basis of $1 ,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the payment of the printing or other expenses for such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each number(s) prior to the issuance of the applicable Securities. C. INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1 ,000 and $5,000 units, or in the case of one odd denomination, calculate the unit separately. Each intermediate unit calculation is first determined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal place is equal to or greater than five the sixth decimal place is increased by one. The final 2 per unit calculation is subsequently rounded to two decimal positions. (See Attachment "A" for sample calculation.) D. SURRENDER Securities surrendered for payment, cancellation or partial redemption shall be cancelled by Agent and returned to Issuer in accordance with K.S.A. I 0-111. E. TRANSFERS AND EXCHANGES 1. When Securities are presented to Agent for transfer or exchange, Agent shall so transfer or exchange such Securities if the requirements of Section 8-401 ( 1) of the Uniform Commercial Code are met. 2. In accordance with the authorizing Resolution or Ordinance of the Issuer (the "Bond Resolution"), payments of interest shall be made to the owner of record of each Security as of the close of business on the fifteenth day of the month preceding each interest payment date. The Agent shall make such payments to the record owner of each Security as set forth on the registration books maintained by Agent as of such date. 3. Agent shall not be required to transfer or exchange any Security during a period beginning on the day following the fifteenth day of the month preceding any interest payment date for such Securities and ending at the close of business on the interest payment date, or to transfer or exchange any Security selected or called for redemption in whole or in part subsequent to the date notice of such redemption is given in accordance with the Bond Resolution authorizing the Securities. F. REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers or exchanges shall bear a Date of Registration as of the date that all the required documentation is received at the Agent's official place of business. Issuer will provide funds to make any interest or principal payments in accordance with K.S.A. 10-130 and amendments thereto. Agent is hereby authorized to effect any semiannual payment of interest or any principal by charging the Issuer's Fiscal Agency account with Agent. G. REPLACEMENT OF SECURITIES If the owner of a Security claims that a Security has been lost, destroyed or wrongfully taken, Issuer shall issue and Agent shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent shall perform this function. An indemnity bond and affidavit of loss shall be provided to Agent and Issuer at the expense of the owner of the Security. Such indemnity bond and affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agent from any loss which any of them may suffer if the Security is replaced. Issuer may charge the Security owner for its expenses in the replacement of a Security. H. REDEMPTIONS Optional Redemption. If any Securities are to be redeemed pursuant to an optional 3 redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen (15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen (15) days preceding the date notice is to be provided to the Security owners for the purpose of selecting Securities on a partial redemption. Further, in the event notice is given to Agent for a complete redemption of the Issue according to the terms of the Bond Resolution, Agent shall not be required to transfer or exchange any Security beginning on the day following the 15th day preceding the date set for redemption. I. MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities oflssuer (in a number equal to one Security for each maturity) for registration and exchange, and shall safeguard any "blank" Securities held for purpose of exchange or transfer. J. REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance of Securities upon written request of Issuer. K. CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas and also the Bond Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 4 CITY OF SALINA, KANSAS By Mayd!~ i_ fi= ATTEST: ... By: ?tffUdLzUt.iJ:k Clerk (SEAL) OFFICE OF THE TREASURER OF THE STATE OF KANSAS By;~~ (Signature page to Agreement Between Issuer and Agent) ATTACHMENT "A" SAMPLE $5,000.00000 ........................ Bond Unit x .06875 ........................ Interest Rate 343 .750000 Rounded to six decimal places I 360 ........................ Days per year .954861 Rounded to six decimal places x 180 ........................ Day in interest period 171 .874980 (Rounded to second decimal= $171 .87) Unit interest is then multiplied by the number of units in the maturity. A-1 • .. .. .• .... 11 Blanket Issuer Letter of Representations [TD.bl Oon1*ted .,,...., Ladies ml Genttemen: .. ,, ' .. ' .. cm or ut.DA, DISIS nm let= scts f'OJth our undemadiDg w!th tespcct to aD macs (the "'Secmiticsi that ~ shill request bo snide eligible foz:depcd by '!he DeposltmyTnist Company ("DTC") • . • To .Induce PTO to -=cept the Securlties as ~le (or deposit at DJ'C. and tD 8d ID accarda. ce wfth DTCs llules with nispect to the Securllies. Jssuer represents m DTC that IssuerwiD eompJy with the ieqaircmeots stated In DlO Opera6onal Anngements. as they may be amended from time lO time. •• •• • • • Very tmlyyoon. Cit.y of Sllbaa, l:maa m .,.cf;~· ~ lfawll, llaJOr a.11,.. ICI 67402-om 913-826-7240 · . . . .. . ... ~ ! . . IJi~1:1 ll~lJfJ~}i · J111ill~1~~11·11~~tfff! 1fJl1!f 2, I ! Mt I ~ ~ Jl i , . i ~ ~ ii ~ J . If & ,. i i g ' r ~ J 1 1' ~I=!"" 1 1t!J ·fi !!dHii~·r ~~~i li!J 1f i.bil1(~b 1if !i~!i! 1~1~l~f f1!fl•1Jil 1irif !·j:lll•~•IJiJ~ §.r~~af I· t. l r t l! ~ !nW f ~J ~l! ~ t . ;I J ,~,,it. Ii n d~f 11 ~ ... i rt l ~Oh I ·~ ii -Jlz . ~ltl~Jl!!R. Jltiwf l~·it.l~I~ '.~ il'tti! ;~l~ I f ·l ~ f ~ l 1~ II l -~IJ 1t&r1j~ f lif 1 ~-f ~i :1~li l:~f flJjlJf ·111ifi1 ~!1~11~ 1 I · f unln f.!,l,Jhf .~J!1rhnhfrh,J.I ·Hsarlu !E .. ·. . Sam.DuLEA (I'o Blanbt lam-1..e11t1-orlefl m•lloal) s. Conveyance or notices and otber rommmricllious by DTC to Direct Pmtidpimts. by Direct Participants to Indirect Paiticipams. and by Dnct Pmticfplnts and mtnct Participants to Ben~ Owners will be govemcd by mangements mg thrm. nbject to my stlSldul1 arreplarmy reqainlmmds u may be iD effect fiom timo r.o time. [Beodidll Olmerl Of Sccmitia may wish to llte c:icmiD 11eps to mgmcnt the txlnlmiaio4 to them or notioel of sipfficl!lt mmts w!lh rospect to 1bc Sccaritics. sadl u ndemptioDs. te:ndcrr. ddaubs. and pzoposccl amawfmmb to GID &cmitJ nmata For cnmple, Bmddll OwDcn ot Securi1ics m'/ wish to uocnam 1bat the nominee holding Ibo Securitia fer their benefit .. aped to obtain IDd tnmsmit notices to Bemeficial Om. ID ibe a1Jmltivc. Beneficial OwaCll may wilh to pmvic1e lbc:ir names IDd addn:aes to tbe registrar ad ieqwt thlt copjes of notices 11c·provided d.bectJy to them.) '(f. Redemption notices shall be Mist to DTC. Iflols dmD ID of the Secarids MildD m fssae ce bolng redllczm:I, DTC"s practice is to dclamtne by lot the amDaDt of1be iatcrcst of each DiRlct PldicipaDt in lllcb iauc to be reMc:med.] • • 7. Neitbet DTC llOt Code & Co. (nm' cy olber DTC JM*••iiee) wiD ~Cll' Wle with respect to Securities unless uthndzecl by a Direct ParticiplDt ill accordance with DTC's MMI Ptooedures. Under its anal Jlft)CCdmcs. DTC mails a Ommbus Proxy to &net u IOCllll 11 possible afb:r tic nicmd dale. 1be Onmibm Prm,r usips Cale & Co.'• caascading or vocins rishts 10 6blo Direct Pmticipllltl to whose ICCOmJts SCAdtics are credited on tho rcc:on1 date [uiczdific:d m a mm, dlcbcd lo tbc Omnibal Pmxy). 8. Redemption psoc:eedl. ctisidbuDom, ad dMdczad pmymmm cm the Sec:urlties will ·bo made to Cede & Co., or such other nornitws u may be ~ by an. audlcidzed representltive of DTC. DTC's practice is to credit Direct Participams' ICCWDil upon DTC's receipt of funds sad cmra:pqnding deblil intonndcm Jiam lssacr' or Ap:m. on paylbJc date ill acccadauee with their zcapcctiWJ Jddiap lbowD CJD DTC's ftlCOl'ds. P~ by Panicipams to Bc:nc:ficill Onea will be pvcmed by ~ iDstructiom eud customlly pnctic:cs. IS is the OlllC wftfa sccmitits field for lbc lccomds of eustnmen ii beuer fozm 0: registcrecl in •street JJatM," ad will be the respomibilily of llDCb Padicipam llld llOl of DTC. Agent. or lauet, subject to any stamtmy or~ n;qa:hanm u may be in dfeet from lilne to time. hyzDmt of redemption "proceeds. distributions. and dMdcmd paJlllllDIS to Cede & Co. tor lllCh. crdler n,,..,;,. u may be requested by an llDtbarized tepaeaenldve of'DTC) is the respouibility oflrmer er As=. disbancmeDt of such paymeats to Dmct hrticfpams will be 6.0 ~ ofDTC, and cfisbm:ement of such payments to die Dcmddal OwDc:rs will be the rospomibility ofDirec:tand Jndind PmdcipmlL . . (9. A Beneficial OwDe:r lball give notice to elect 10 ~ i1r Sec:urities pmchued or tr:Ddend1 tbrouah its ParticfplDt. to [Tender~&) .Apnt. llld lbal1 effect ddivay of such Secmitie&.by cmisint 1ho Direct l'Jrticipant to trmd'c:r 1be Partioipml'• iatmlt in tho Sccuridca. on DTC"s rccards, to [Teud~ Apnt.. The 1~ for physical c1c1iw:J "of Secmi1ics in c-wwtioo Witb a optional tender or a martdafJ «Y pmdme will be deemed atisfied wbcD 6e OWDCl11:aip rigbls in lhe Securities ae biml!eued by Direct Participems CID DTC*s leCCllds ml followlcl b)' a book-cmry credft of teDdesed Securitfes to [TmderlR.emadceti Agent's DTC accoant.) 10. OTC may koadmie pnmdlnJ fll serricel 11 depolilaly with respeot to tho Secuddes It miy time by liYiDJ reascmablo notice to &Acr or ApD1. UDder am circwmtaDc:cs, m Glo m::at 1blt & cucccaor depocitoq is DOt obnfned. Sc=rity catificates in nqimed to be prinled IDCI ddivcroc1 11. Issuer may c1ccide to discontmue usc offhe sy11cm ofWok-cnlry-cmly i-wim tbroup J>TC (or a successor socmitics dcpcsitmy). In that event, Security mti&c:ates will be pintecl ad dclive:reel to I>TC. 12. 'Ibe information iD this section CODCaDiDa DTC IDd D'l'C"• boot-entry aystem hu boc:a obtained tom 10UZCCS that Juaer believes to be reliable, bat lsmcr DJra 1IO rapomibility for 1bo ~ thereo! 8LOR0312SW UNDERWRITING SAFEKEEPING AGREEMENT BY AND BETWEEN DEPOSITORY TRUST COMPANY AND THE CITY OF SALINA, KANSAS AND THE OFFICE OF THE KANSAS STATE TREASURER $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 In order to induce the Depository Trust Company (the "DTC") to accept delivery of the above captioned bonds (the "Bonds") for safekeeping prior to the delivery of the Bonds on November 27, 2018 (the "Closing Date"), the City of Salina, Kansas (the "Issuer"), and the Treasurer of the State of Kansas (the "Agent") hereby agree to place the entire principal amount of the Bonds, in the custody, control and possession ofDTC at least one day prior to the Closing Date. The Issuer further agrees that by copy of this letter appropriately executed, it will notify DTC to follow the instructions of the underwriter of the Bonds (the "Underwriter") in distributing the Bonds. DTC will safekeep and hold in escrow the Bonds until it shall have received notification from one of the following authorized representatives of the Issuer to release or return the Bonds: Shandi Wicks, Clerk, or Gilmore & Bell, P.C., Bond Counsel. Notification may be made by telephone or by receipt of an executed notice, delivered or telecopied to OTC; provided, however, that if the notification is made by telephone, written notice must be sent within 24 hours of the original notification. In the event the Issuer executes the release of the Bonds, DTC will distribute the Bonds pursuant to written instructions provided by the Underwriter; however, in the event a demand for the return of the Bonds is received, DTC shall return the Bonds as soon as practicable, but in any event, no later than the following business day. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CITY OF SALINA, KANSAS Dated: November 5, 2018 By: 8<.Mtiilt 1tda Clerk (Signature page to Underwriting Safekeeping Agreement -Bonds) Moony's INVESTORS SERVICE November 6, 2018 Mr. David Arteberry George K. Baum & Company Investment Bankers 4801 Main Street Suite 500 Kansas City, MO 64112 Dear Mr. Arteberry: 600 North Pearl Street Suite 2165 Dallas, TX 75201 www.moodys.com We wish to inform you that on October 23, 2018, Moody's Investors Service reviewed and assigned a rating of MIG 1 to Salina (City Of) KS, General Obligation Temporary Notes, Series 2018-2. Credit ratings issued by Moody's Investors Service, Inc. and its affiliates ("Moody's") are Moody's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities and are not statements of current or historical fact. Moody's credit ratings address credit risk only and do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. This letter uses capitalized terms and rating symbols that are defined or referenced either in Moody's Definitions and Symbols Guide or MIS Code of Professional Conduct as of the date of this letter, both published on www.moodys.com . The Credit Ratings will be publicly disseminated by Moody's through normal print and electronic media as well as in response to verbal requests to Moody's Rating Desk. Moody's related research and analyses will also be published on www.moodys.com and may be further distributed as otherwise agreed in writing with us. Moody's Credit Ratings or any corresponding outlook, if assigned, will be subject to revision, suspension or withdrawal, or may be placed on review, by Moody's at any time, without notice, in the sole discretion of Moody's. For the most current Credit Rating, please visit www.moodys.com. Moody's has not consented and will not consent to being named as an expert under applicable securities laws, such as section 7 of the Securities Act of 1933. The assignment of a rating does not create a fiduciary relationship between Moody's and you or between Moody's and other recipients of a Credit Rating. Moody's Credit Ratings are not and do not provide investment advice or recommendations to purchase, sell or hold particular securities. Moody's issues Credit Ratings with the expectation and understanding that each investor will make its own evaluation of each security that is under consideration for purchase, sale or holding. Moody's adopts all necessary measures so that the information it uses in assigning a Credit Rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently validate or verify information received in the rating process. Moody's expects and is relying upon you possessing all legal rights and required consents to disclose the information to Moody's, and that such information is not subject to any restrictions that would prevent use by Moody's for its ratings process. In assigning the Credit Ratings, Moody's has relied upon the truth, accuracy, and completeness of the information supplied by you or on your behalf to Moody's. Moody's expects that you will, and is relying upon you to, on an ongoing basis, promptly provide Moody's with all information necessary in order for Moody's to accurately and timely monitor the Credit Ratings, including current financial and statistical information. November 6, 2018 Mr. David Arteberry George K. Baum & Company Investment Bankers 4801 Main Street Suite 500 Kansas City, MO 64112 Under no circumstances shall Moody's have any liability (whether in contract, tort or otherwise) to any person or entity for any loss, injury or damage or cost caused by, resulting from, or relating to, in whole or in part, directly or indirectly, any action or error (negligent or otherwise) on the part of, or other circumstance or contingency within or outside the control of, Moody's or any of its or its affiliates' directors, officers, employees or agents in connection with the Credit Ratings. ALL INFORMATION, INCLUDING THE CREDIT RATING, ANY FEEDBACK OR OTHER COMMUNICATION RELATING THERETO IS PROVIDED "AS IS" WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND. MOODY'S MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH INFORMATION. Any non-public information discussed with or revealed to you must be kept confidential and only disclosed either (i) to your legal counsel acting in their capacity as such; (ii) to your other authorized agents acting in their capacity as such with a need to know that have entered into non-disclosure agreements with Moody's in the form provided by Moody's and (iii) as required by applicable law or regulation. You agree to cause your employees, affiliates, agents and advisors to keep non-public information confidential. If there is a conflict between the terms of this rating letter and any related Moody's rating application, the terms of the executed rating application will govern and supercede this rating letter. Should you have any questions regarding the above, please do not hesitate to contact Kenneth Surgenor at 214- 979-6848. Sincerely, Moody's Investors Service Inc Moony's INVESTORS SERVICE November 6, 2018 Mr. David Arteberry George K. Baum & Company Investment Bankers 4801 Main Street Suite 500 Kansas City, MO 64112 Dear Mr. Arteberry : 600 North Pearl Street Suite 2165 Dallas, TX 75201 www.moodys.com We wish to inform you that on October 23, 2018, Moody's Investors Service reviewed and assigned a rating of • No Outlook to Salina (City Of) KS • Aa3 to Salina (City Of) KS, General Obligation Internal Improvement Bonds, Series 2018-A Credit ratings issued by Moody's Investors Service, Inc. and its affiliates ("Moody's") are Moody's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities and are not statements of current or historical fact. Moody's credit ratings address credit risk only and do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. This letter uses capitalized terms and rating symbols that are defined or referenced either in Moody's Definitions and Symbols Guide or MIS Code of Professional Conduct as of the date of this letter, both published on www.moodys.com . The Credit Ratings will be publicly disseminated by Moody's through normal print and electronic media as well as in response to verbal requests to Moody's Rating Desk. Moody's related research and analyses will also be published on www.moodys.com and may be further distributed as otherwise agreed in writing with us. Moody's Credit Ratings or any corresponding outlook, if assigned, will be subject to revision, suspension or withdrawal, or may be placed on review, by Moody's at any time, without notice, in the sole discretion of Moody's. For the most current Credit Rating, please visit www.moodys.com. Moody's has not consented and will not consent to being named as an expert under applicable securities laws, such as section 7 of the Securities Act of 1933. The assignment of a rating does not create a fiduciary relationship between Moody's and you or between Moody's and other recipients of a Credit Rating . Moody's Credit Ratings are not and do not provide investment advice or recommendations to purchase, sell or hold particular securities. Moody's issues Credit Ratings with the expectation and understanding that each investor will make its own evaluation of each security that is under consideration for purchase, sale or holding. Moody's adopts all necessary measures so that the information it uses in assigning a Credit Rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently validate or verify information received in the rating process. Moody's expects and is relying upon you possessing all legal rights and required consents to disclose the information to Moody's, and that such information is not subject to any restrictions that would prevent use by Moody's for its ratings process. In assigning the Credit Ratings, Moody's has relied upon the truth, accuracy, and completeness of the information supplied by you or on your behalf to November 6, 2018 Mr. David Arteberry George K. Baum & Company Investment Bankers 4801 Main Street Suite 500 Kansas City, MO 64112 Moody's. Moody's expects that you will, and is relying upon you to, on an ongoing basis, promptly provide Moody's with all information necessary in order for Moody's to accurately and timely monitor the Credit Ratings, including current financial and statistical information. Under no circumstances shall Moody's have any liability (whether in contract, tort or otherwise) to any person or entity for any loss, injury or damage or cost caused by, resulting from, or relating to, in whole or in part, directly or indirectly, any action or error (negligent or otherwise) on the part of, or other circumstance or contingency within or outside the control of, Moody's or any of its or its affiliates' directors, officers, employees or agents in connection with the Credit Ratings. ALL INFORMATION, INCLUDING THE CREDIT RATING, ANY FEEDBACK OR OTHER COMMUNICATION RELATING THERETO IS PROVIDED "AS IS" WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND. MOODY'S MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH INFORMATION. Any non-public information discussed with or revealed to you must be kept confidential and only disclosed either (i) to your legal counsel acting in their capacity as such; (ii) to your other authorized agents acting in their capacity as such with a need to know that have entered into non-disclosure agreements with Moody's in the form provided by Moody's and (iii) as required by applicable law or regulation. You agree to cause your employees, affiliates, agents and advisors to keep non-public information confidential. If there is a conflict between the terms of this rating letter and any related Moody's rating application, the terms of the executed rating application will govern and supercede this rating letter. Should you have any questions regarding the above, please do not hesitate to contact Kenneth Surgenor at 214-979-6848. Sincerely, Moody's Investors Service Inc CLOSING CERTIFICATE $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), make this Certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described bonds (the "Bonds"); and certify as of November 27, 2018 (the "Issue Date"), as follows: 1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Bond Resolution (defined below) authorizing the Bonds. 2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and issuance of the Bonds (the "Transcript"), furnished to the Purchaser of the Bonds, is to the best of our knowledge, infonnation and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated November 5, 2018 are true and correct as of this date and are incorporated in this Certificate by reference. 3. Authorization and Purpose of the Bonds. The Issuer is issuing and delivering the Bonds simultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., and K.S.A. 12-6a01 et seq., as amended, Ordinance No. 18-10976 and Resolution No. 18-7617 of the Issuer duly adopted by the governing body of the Issuer on November 5, 2018 (collectively, the "Bond Resolution") for the purpose of: (a) paying a portion of the costs of certain public improvements (the "Improvements"); and (b) retiring on December 1, 2018 a portion of the following temporary notes of the Issuer, issued to temporarily finance the Improvements (the "Refunded Notes"): Description General Obligation Temporary Notes Series 2018-1 Dated Date July 30, 2018 Maturity Date December 1, 2018 Amount $6,000,000 4. Security for the Bonds. The Bonds are general obligations of the Issuer payable in part from special assessments levied upon the property benefited by the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, with the balance payable, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are pledged under the Bond Resolution to the payment of the principal of and interest on the Bonds. In the Bond Resolution, the governing body of the Issuer has covenanted to annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. 6. Sale of Bonds. The Bonds have been sold at rates not in excess of the limitations set forth in K.S.A. I 0-1009. The Notice of Sale dated October 22, 2018 and included in the Transcript constitutes a full true and correct copy thereof. A copy of such Notice of Bond Sale and Preliminary Official Statement was sent to prospective purchasers of the Bonds, and to all other persons and firms requesting copies of such Notice of Bond Sale and Preliminary Official Statement. 7. Official Statement. The Official Statement contained in the Transcript constitutes a full, true and correct copy of the Official Statement relating to the Bonds. To the best of our knowledge, the Official Statement, other than the sections entitled "Tax Matters," and Appendices B and C, about which the Issuer expresses no opinion, is true in all material respects, and does not contain any untrue statement of a material fact or does not omit to state a material fact, necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. As of this date there has been no material adverse change in the financial condition or the financial affairs of the Issuer since the date of the Official Statement. No other event has occurred which is necessary to be disclosed in the Official Statement in order to make the statements therein not misleading in any material respect as of the date of this Certificate. The Issuer has previously caused to be delivered to the Purchaser copies of the Official Statement. 8. Continuing Disclosure Undertaking. The Issuer has heretofore adopted its Omnibus Continuing Disclosure Undertaking (the "Disclosure Undertaking"), wherein the Issuer has covenanted to disseminate such information as is required in accordance with the provisions of the SEC Rule and the Disclosure Undertaking. In the Bond Resolution, the Issuer has covenanted to apply the provisions of the Disclosure Undertaking to the Bonds. A copy of the Disclosure Undertaking is contained in the Transcript. 9. Non-Litigation. There is no controversy, action, suit, proceeding, or to the best of our knowledge, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; ( e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; (f) the levy and collection of an ad valorem property tax to pay the principal of and interest on the Bonds; or (g) the federal or state tax-exempt status of the interest on the Bonds; wherein any unfavorable decision, ruling or finding would adversely affect the Issuer, the transactions contemplated by the Bond Resolution or the Official Statement, or the validity or enforceability of the Bonds, which are not disclosed in the final Official Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 10. Receipt for Purchase Price. The Issuer has received from Bernardi Securities, Inc., Chicago, Illnois, the Underwriter of the Bonds, the full purchase price of the Bonds, said purchase price received by the Issuer being calculated as follows: Principal Amount .................................. . Less Underwriting Discount.. ............... . Plus Net Original Issue Premium Total Purchase Price ............................ . Less Good Faith Deposit received on Sale Date Net Amount Received at Closing $2,090,000.00 (18,287.50) 88,123.35 $2,159,835.85 $( 43,200.00) $2,116,635.85 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 WITNESS our hands and the seal of the Issuer. Signature Official Title Mayor Clerk (Signature Page to Closing Certificate -Bonds) FEDERAL TAX CERTIFICATE Dated as of November 27, 2018 OF THE CITY OF SALINA, KANSAS $2,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A Section 1.01 Section 2.01 Section 2.02 Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Section 3.09 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section 5.01 Section 5.02 Section 5.03 Section 5.04 Section 5.05 Section 5.06 FEDERAL TAX CERTIFICATE TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................. 1 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer ........................................................... 6 Survival of Representations and Covenants ............................................................. 9 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS General. ........................................................................................................................ 9 Reasonable Expectations ............................................................................................. 9 Purpose of Financing ................................................................................................. 10 Funds and Accounts .................................................................................................. 10 Amount and Use of Bond Proceeds and Other Monies .......................................... 10 Multipurpose Issue .................................................................................................... 10 Current Refunding .................................................................................................... 11 Completion of Financed Improvements -New Money Portion ............................ 11 Sinking Funds ............................................................................................................ 11 Reserve, Replacement and Pledged Funds .............................................................. 11 Purpose Investment Yield ......................................................................................... 11 Issue Price and Yield on Bonds ................................................................................ 11 Miscellaneous Arbitrage Matters ............................................................................. 12 Conclusion .................................................................................................................. 12 ARTICLE IV POST-ISSUANCE TAX COMPLIANCE General. ...................................................................................................................... 12 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements ..... 13 Temporary Periods/ Yield Restriction ..................................................................... 13 Procedures for Establishing Fair Market Value .................................................... 14 Certain Gross Proceeds Exempt from the Rebate Requirement. ......................... 16 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts ......................................................................................... 18 ARTICLE V MISCELLANEOUS PROVISIONS Term of Tax Certificate ............................................................................................ 19 Amendments .............................................................................................................. 19 Opinion of Bond Counsel. ......................................................................................... 20 Reliance ...................................................................................................................... 20 Severability ................................................................................................................. 20 Benefit of Certificate ................................................................................................. 20 (i) Section 5.07 Section 5.08 Section 5.09 Default, Breach and Enforcement ............................................................................ 20 Governing Law .......................................................................................................... 20 Electronic Transactions ............................................................................................ 20 LIST OF EXHIBITS TO FEDERAL TAX CERTIFICATE A. IRS FORM 8038-G EVIDENCE OF FILING B. RECEIPT FOR PURCHASE PRICE C-1. PURCHASER'S RECEIPT FOR BONDS AND ISSUE PRICE CERTIFICATE C-2. MUNICIPAL ADVISOR'S CERTIFICATE REGARDING COMPETITIVE SALE D. DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS E. SAMPLE ANNUAL COMPLIANCE CHECKLIST F. SAMPLE FINAL WRITTEN ALLOCATION Schedule 1 Debt Service Schedule and Proof of Yield * * * (ii) FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate") is executed as of November 27, 2018 (the "Issue Date"), by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Tax Certificate is being executed and delivered in connection with the issuance by the Issuer of $2,090,000 principal amount of General Obligation Internal Improvement Bonds, Series 2018-A (the "Bonds"), under the Bond Resolution (as herein defined), for the purposes described in this Tax Certificate and in the Bond Resolution. 2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Bond proceeds and of certain other money relating to the Bonds and set forth the conditions under which the interest on the Bonds will be excluded from gross income for federal income tax purposes. 3. The Issuer is executing this Tax Certificate in order to set forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the property financed or refinanced with those proceeds and the investment of the Bond proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes and to provide guidance for complying with the arbitrage rebate and yield reduction amounts provisions of Code§ 148(f). 4. The Issuer adopted a Tax Compliance Procedure (as defined below) for the purpose of setting out general procedures for the Issuer to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. This Tax Certificate is entered into as required by the Tax Compliance Procedure, in part, to set out specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Certificate, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Bond Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: "Adjusted Gross Proceeds" means the Gross Proceeds of the New Money Portion or the Refunding Portion, as applicable, reduced by amounts (a) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund, (b) that as of the Issue Date are not expected to be Gross Proceeds, but which arise after the end of the applicable spending period, and ( c) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Annual Compliance Checklist" means a checklist for each of the Financed Improvements designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date, as further described in Section 4.02 and substantially in the form attached as Exhibit E. "Available Construction Proceeds" means the sale proceeds of the New Money Portion, increased by (a) Investment earnings on the sale proceeds, (b) earnings on amounts in a reasonably required reserve or replacement fund allocable to the New Money Portion but not funded from the Bonds, and ( c) earnings on such earnings, reduced by sale proceeds (1) in any reasonably required reserve fund or (2) used to pay issuance costs of the Bonds. But Available Construction Proceeds do not include Investment earnings on amounts in a reasonably required reserve or replacement fund after the earlier of (i) the second anniversary of the Issue Date or (ii) the date the Financed Improvements are substantially completed. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) one- twelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. "Bond" or "Bonds" means any bond or bonds of the Issuer's General Obligation Internal Improvement Bonds, Series 2018-A, described in the recitals, authenticated and delivered under the Bond Resolution. "Bond Compliance Officer" means the Issuer's Finance Director or other person named in the Tax Compliance Procedure. "Bond Counsel" means Gilmore & Bell, P.C., or another firm of nationally recognized bond counsel acceptable to the Issuer. "Bond Resolution" means Ordinance No. 18-10976 and Resolution No. 18-7617 of the Issuer duly adopted by the governing body of the Issuer on November 5, 2018, as originally executed by the Issuer, as amended and supplemented in accordance with the provisions of the Bond Resolution. "Bond Year" means each one-year period (or shorter period for the first Bond Year) ending October 1 or another one-year period selected by the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date on which arbitrage rebate and yield reduction amounts for the Bonds are computed. The Issuer may treat any date as a Computation Date, subject to the following limits: (a) the first rebate installment payment must be made for a Computation Date not later than 5 years after the Issue Date; (b) each subsequent rebate installment payment must be made for a Computation Date not later than 5 years after the previous Computation Date for which an installment payment was made; and ( c) the date the last Bond is discharged is the final Computation Date. 2 The Issuer selects October 1, 2023 as the first Computation Date but reserves the right to select a different date consistent with the Regulations. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate, a sample form of which is attached to this Tax Certificate as Exhibit F . "Financed Improvements" means the portion of the Improvements being financed or refinanced with the proceeds of the Bonds and the Original Obligations, as described in the Bond Resolution and on ExhibitD. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Bonds, including amounts used to pay underwriting discount or fees, but excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds other Investment proceeds or transferred proceeds), (c) any amounts held in a sinking fund for the Bonds, (d) any amounts held in a pledged fund or reserve fund for the Bonds, (e) any other replacement proceeds and (f) any transferred proceeds. Specifically, Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1) Improvement Fund; (2) Debt Service Account; (3) Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of the Bonds). "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on two or more future dates (e.g., a forward supply contract). "Improvements" means all of the property being acquired, developed, constructed, renovated, and equipped by the Issuer using proceeds of the Bonds or the Original Obligations and other money contributed by the Issuer, as described on Exhibit D. "Investment" means any security, obligation, annuity contract or other investment-type property that is purchased directly with, or otherwise allocated to, Gross Proceeds. This term does not include a tax- exempt bond, except for "specified private activity bonds" as defined in Code § 57(a)(5)(C), but it does include the investment element of most interest rate caps. "IRS" means the United States Internal Revenue Service. "Issue Date" means November 27, 2018. "Issuer" means the City of Salina, Kansas, and its successors and assigns, or any body, agency or instrumentality of the State succeeding to or charged with the powers, duties and functions of the Issuer. "Management or Service Agreement" means a legal agreement defined in Regulations § 1.141- 3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or a portion of any function of the Financed Improvements, such as a contract to manage the entire Financed Improvements or a portion of the Financed Improvements. However, contracts for services that are solely incidental to the primary governmental function of the Financed Improvements (for example, 3 contracts for janitorial, office equipment repair, billing, or similar services) are not treated as Management or Service Agreements. "Measurement Period" means, with respect to the New Money Portion of each item of property financed as part of the Financed Improvements, the period beginning on the later of (a) the Issue Date or (b) the date the property is placed in service and ending on the earlier of (1) the final maturity date of the Bonds or (2) the end of the expected economic useful life of the property. For each item of property financed as part of the Financed Improvements with proceeds of the Original Obligations, "measurement period" means the period beginning on the later of (a) the issue date of the Original Obligations or (b) the date the property was or will be placed in service, and ending on the earlier of (1) the final maturity date of the Bonds or (2) the end of the expected economic useful life of the property. "Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Bonds. "Net Proceeds" means when used in reference to the Bonds or the New Money Portion, the sale proceeds (excluding pre-issuance accrued interest), less an allocable share of any proceeds deposited in a reasonably required reserve or replacement fund, plus an allocable share of all Investment earnings on such sale proceeds. "New Money Portion" means the portion of the Bonds described in Section 3.06 together with the remaining Gross Proceeds of the Bonds properly allocable to financing the Improvements, rather than refinancing the Refunded Notes. "Non-Qualified Use" means use of Bond proceeds or the Financed Improvements in a trade or business carried on by any Non-Qualified User. The rules set out in Regulations § 1.141-3 determine whether Bond proceeds or the Financed Improvements are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement with respect to the Financed Improvements, will constitute use under Regulations § 1.141 -3. "Non-Qualified User" means any person or entity other than a Qualified User. "Opinion of Bond Counsel" means the written opinion of Bond Counsel to the effect that the proposed action or the failure to act will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. "Original Obligations" means the Issuer's and Salina Airport Authority's temporary note obligations directly or indirectly refinanced by the Bonds, which were the initial issues of tax-exempt governmental obligations that financed or refinanced a portion of the Financed Improvements. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Bonds, the use of the Financed Improvements and the investment of Gross Proceeds after the Issue Date of the Bonds. "Purchaser" means Bernardi Securities, Inc., Chicago, Illinois, the original purchaser of the Bonds, and any successor and assigns. "Qualified Equity" means funds that are not derived from proceeds of a tax-exempt financing that are spent on the Improvements at any time during the period beginning not earlier than the later of (a) 60 days prior to the respective Official Intent Date or (b) three years prior to the Issue Date, and ending not 4 later than the date the respective Improvement is capable of and actually used at substantially its designed level. Qualified Equity excludes an ownership interest in real property or tangible personal property. "Qualified Use Agreement" means any of the following: (a) A lease or other short-term use by members of the general public who occupy the Financed Improvements on a short-term basis in the ordinary course of the Issuer's governmental purposes. (b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Improvements under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Improvements was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Improvements was not constructed for a principal purpose of providing the property for use by that person. "Qualified User" means a state, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor rebate analyst selected pursuant to this Tax Certificate. "Refunded Notes" means, collectively, that portion of the Series 2017-1 Notes and Series 2018-1 Notes refunded by the Bonds. "Refunding Portion" means the sale proceeds of the Bonds identified in Section 3.06, together with the remaining Gross Proceeds of the Bonds properly allocable to the refunding of the Refunded Notes. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code§§ 103 and 141through150 and applicable to the Bonds. 5 "Salina Airport Authority" means the Salina Airport Authority (Salina, Kansas), a political subdivision duly created, organized and existing under the Constitution and laws of the State which has the lawful power and authority to issue general obligation temporary notes or bonds on behalf of the Issuer. "Series 2017-1 Notes" means the Salina Airport Authority's General Obligation Temporary Notes, Series 2017-1, dated December 28, 2017. "Series 2018-1 Notes" means of the Issuer's General Obligation Temporary Notes, Series 2018-1, dated July 30, 2018. "State" means the State of Kansas. "Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and supplemented in accordance with its terms. "Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and Procedure, dated June 11, 2012, as amended and supplemented in accordance with the terms of the Tax Compliance Procedure. "Tax-Exempt Bond File" means documents and records for the Bonds and the Original Obligations, maintained by the Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Bonds. "Yield" means yield on the Bonds, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations§ 1.148-5. ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.01 Representations and Covenants of the Issuer. The Issuer represents and covenants as follows: (a) Organization and Authority. The Issuer: (I) is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; (2) has lawful power and authority to issue the Bonds for the purposes set forth in the Bond Resolution, to enter into, execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate and to carry out its obligations under this Tax Certificate and under such documents; and (3) by all necessary action has been duly authorized to execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate, acting by and through its duly authorized officials. (b) Tax-Exempt Status of Bonds-and Allocation of Proceeds to Improvements. (I) The Issuer (to the extent within its power or direction) will not use any money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other source, in a manner that would cause the Bonds to be "arbitrage bonds," within the meaning of Code§ 148, and will not (to 6 the extent within its power or direction) otherwise use or permit the use of any Bond proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Bonds to be included in gross income for federal income tax purposes. (2) The Issuer will account for the expenditure of the Bond proceeds and Qualified Equity for the Improvements as described in Section 4.02. For purposes of the following covenants related to the use of the Improvements, any Non-Qualified Use shall be treated as first allocated entirely to the portion of the Improvements financed with Qualified Equity, and then only to the extent of any excess, to the portion of the Improvements financed with Bond proceeds. (c) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: (1) all of the Financed Improvements have been and are expected to be owned by the Issuer or another Qualified User; (2) no portion of the Financed Improvements have been or are expected to be used in a Non-Qualified Use; and (3) the Issuer will not permit any Non-Qualified Use of the Financed Improvements without first consulting with Bond Counsel. The Issuer will monitor the usage of all portions of the Financed Improvements during the Measurement Period and will take any action or refrain from any action (which may include "remedial action" in accordance with Regulations § 1.141-12, which could involve redemption or defeasance of all or a portion of the Bonds), as specified in an Opinion of Bond Counsel, as necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. ( d) Governmental Obligations-Private Security or Payment. As of the Issue Date, the Issuer expects that none of the principal of and interest on the Bonds will be, and none of the payment of principal of and interest on the Refunded Notes and on all other obligations which directly or indirectly refinanced the Original Obligations has been, (under the terms of the Bonds or any underlying arrangement) directly or indirectly: (1) secured by (i) any interest in property used or to be used for a Non-Qualified Use, or (ii) any interest in payments in respect of such property; or (2) derived from payments (whether or not such payments are made to the Issuer) in respect of property, or borrowed money, used or to be used for a Non-Qualified Use. For purposes of the foregoing, taxes of general application, including payments in lieu of taxes, are not treated as private payments or as private security. The Issuer will not permit any private security or payment with respect to the Bonds without first consulting with Bond Counsel. ( e) No Private Loan -Special Assessments. Not more than 5% of the net proceeds of the Bonds will be loaned directly or indirectly to any Non-Qualified User. The payment of principal of and interest on the Bonds will be funded in whole or in part from a mandatory special assessment against the property benefiting from the improvements financed or refinanced by the Bonds. The use of the proceeds of the Bonds is not treated as a loan of the Bond proceeds because (1) the special assessment is an enforced contribution for the purpose of raising revenue for a specific capital improvement; (2) the assessment does not include any fee for services; (3) the assessment and collection of the tax is not dependent upon, and does not vary, depending on whether the taxpayer engaged, or the property is used, in a trade or business; and ( 4) the tax is imposed to pay for an essential governmental function. (f) Management or Service Agreements. As of the Issue Date, the Issuer has no Management or Service Agreements with Non-Qualified Users. During the Measurement Period, the Issuer will not enter into or renew any Management or Service Agreement with any Non-Qualified User without first consulting with Bond Counsel. 7 (g) Leases. As of the Issue Date, the Issuer has not entered into any leases of any portion of the Financed Improvements during the Measurement Period. During the Measurement Period, the Issuer will not enter into or renew any lease or similar agreement or arrangement other than a Qualified Use Agreement without first consulting with Bond Counsel. (h) Limit on Maturity of Bonds. A list of the assets included in the Financed Improvements and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Bonds is 8.4223 years, as computed by Bond Counsel and shown on Schedule 1, does not exceed 120% of the average reasonably expected economic life of the Financed Improvements. (i) Expenditure of Bond Proceeds. (1) Accounting for Expenditures. The Issuer will evidence each allocation of the proceeds of the Bonds and Qualified Equity for the Improvements to an expenditure in writing. No allocation will be made more than 18 months following the later of (i) the date of the expenditure or (ii) the date the Financed Improvements were placed in service. (2) Reimbursement of Expenditures; Official Intent. The governing body of the Issuer has adopted resolutions declaring the intent of the Issuer to finance the Financed Improvements with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Improvements prior to the issuance of those obligations (the "Official Intent Date"). The resolutions are contained in Tabs I to 3, inclusive, of the Transcript. The Issuer expects to allocate proceeds of the Bonds in the amount of$23,109.74 to reimburse expenditures paid prior to the Issue Date. Such reimbursement allocation meets all of the following requirements: (A) no proceeds of the Bonds will be used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the resolution referenced above was adopted, (B) no reimbursement allocation will be made for an expenditure made more than three years prior to the date of the reimbursement allocation, and (C) no reimbursement allocation will be made more than 18 months following the later of the date of the expenditure or the date the Financed Improvements were placed in service. (j) Registered Bonds. The Bond Resolution requires that all of the Bonds will be issued and held in registered form within the meaning of Code§ 149(a). (k) Bonds Not Federally Guaranteed. The Issuer will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code§ 149(b). (1) IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038- G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of filing will be included in Exhibit A of this Tax Certificate. (m) No Hedge Bonds. At least 85% of the net sale proceeds (the sale proceeds of the New Money Portion less any sale proceeds invested in a reserve fund) of the New Money Portion will be used to carry out the governmental purpose of the New Money Portion within three years after the Issue Date, and not more than 50% of the proceeds of the New Money Portion will be invested in Investments having 8 a substantially guaranteed Yield for four years or more. At least 85% of the net sale proceeds (the sale proceeds of the Original Obligations less any sale proceeds invested in a reserve fund) of each issue comprising the Original Obligations were or will be used to carry out the governmental purpose of the Original Obligations within three years after the respective issue date of the Original Obligations, and not more than 50% of the proceeds of the Original Obligations were or will be invested in Investments having a substantially guaranteed Yield for four years or more. (n) Single Issue; No Other Issues. The Bonds constitute a single "issue" under Regulations § 1.150-1 ( c ). No other debt obligations of the Issuer ( 1) are being sold within 15 days of the sale of the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). For purposes of the foregoing, simultaneously with the Bonds, the Issuer sold its General Obligation Temporary Notes, Series 2018-2, which are not part of the same plan of financing as the Bonds and are not expected to be paid from substantially the same sources of funds as the Bonds, and therefore are not part of the same "issue" as the Bonds under Regulations § 1.150-1 ( c ). A separate Federal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance of these notes. ( o) Interest Rate Swap. As of the Issue Date, the Issuer has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Bonds or the Refunded Notes. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. (p) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enter into a Guaranteed Investment Contract for any Gross Proceeds of the Bonds. The Issuer will be responsible for complying with Section 4.04(d) hereof if it decides to enter into a Guaranteed Investment Contract at a later date. (q) Bank Qualified Tax-Exempt Obligation. The Bonds are not "qualified tax-exempt obligations" under Code§ 265(b)(3). Section 2.02 Survival of Representations and Covenants. All representations, covenants and certifications contained in this Tax Certificate or in any certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution and delivery of such documents and the issuance of the Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Bonds. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.01 General. The purpose of this Article III is to certify, under Regulations § 1. l 48- 2(b ), the Issuer's expectations as to the sources, uses and investment of Bond proceeds and other money, in order to support the Issuer's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Bonds. Section 3.02 Reasonable Expectations. The facts, estimates and expectations set forth in this Article III are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained 9 therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.03 Purpose of Financing. The Bonds are being issued for the purpose of providing funds to pay: (a) a portion of the costs of the Financed Improvements; (b) a portion of the costs ofretiring the Refunded Notes in order to provide permanent financing; and ( c) costs of issuance. Section 3.04 Funds and Accounts. The following funds and accounts have been established under the Bond Resolution: (a) Improvement Fund; (b) Debt Service Account; and ( c) Rebate Fund. Section 3.05 Amount and Use of Bond Proceeds and Other Monies. (a) Amount of Bond Proceeds. The total proceeds to be received by the Issuer from the sale of the Bonds are as evidenced in Exhibit B attached to this Tax Certificate. (b) Use of Bond Proceeds. The Bond proceeds (net an underwriting discount of $18,287.50) plus certain unspent proceeds of the Series 2017-1 Notes in the amount of $396,410.00, are expected to be allocated to expenditures as follows: ( 1) All accrued interest, if any, will be deposited in the Debt Service Account and used to pay interest on the Bonds. (2) $2,159,835.85 will be deposited in the Improvement Fund, to be further allocated as follows: (A) $38,467 .51 will be used to pay the costs of issuing the Bonds; (B) $2,098,258.60 will be transferred to the paying agent for the Refunded Notes and will be used to pay a portion of the principal of and interest on the Refunded Notes, with $1,062,581.65 allocated to pay a portion of the principal of and interest on the Series 2017-1 Notes and $1,035,676.95 allocated to pay a portion of the principal of and interest on the Series 2018-1 Notes; and (C) the balance of $23,109.74 will be used to pay or reimburse the Issuer for costs of the Financed Improvements. (c) Use of Unspent Proceeds of the Series 2017-1 Notes. Unspent Series 2017-1 Note proceeds in the amount of $396,410.00 will be transferred by the Salina Airport Authority to the paying agent for the Series 2017-1 Notes, and will be used to pay a portion of the principal of and interest on the Series 2017-1 Notes on November 30, 2018. Section 3.06 Multipurpose Issue. Pursuant to Regulations§ 1.148-9(h), the Issuer is applying the arbitrage rules to separate financing purposes of the issue that have the same initial temporary period as if they constitute a single issue for purposes of applying the arbitrage rules. Under Regulations § 1.148- 10 9(h), the Bonds will be treated as two separate issues (a New Money Portion and a Refunding Portion) for purposes of applying certain of the arbitrage restrictions under Code § 148. Section 3.07 Current Refunding. (a) Proceeds Used For Current Refunding. Proceeds of the Bonds will be used to pay principal of and interest on the Refunded Notes. All such proceeds shall be spent not later than 90 days after the Issue Date. (b) Transferred Proceeds. As of the Issue Date, there are no unspent proceeds (sale proceeds, Investment proceeds or transferred proceeds) of the Refunded Notes. Upon discharge of any principal amount of the Refunded Notes with proceeds of the Bonds, a ratable portion of the remaining unspent proceeds of the Refunded Notes will become proceeds of the Bonds (determined in accordance Regulations § l. l 48-9(b )). Section 3.08 Completion of Financed Improvements -New Money Portion. The Issuer has incurred, or will incur within six months after the Issue Date, a substantial binding obligation to a third party to spend at least 5% of the Net Proceeds of the New Money Portion on the Financed Improvements. The completion of the Financed Improvements and the allocation of the Net Proceeds of the New Money Portion to expenditures will proceed with due diligence. At least 85% of the Net Proceeds of the New Money Portion will be allocated to expenditures on the Financed Improvements within three years after the Issue Date. Section 3.09 Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Bonds. Such payments will be deposited into the Debt Service Account. Except for the Debt Service Account, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds has been established or is expected to be established. The Debt Service Account is used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Issuer expects that the Debt Service Account will qualify as a Bona Fide Debt Service Fund. Section 3.10 Reserve, Replacement and Pledged Funds. (a) No Reserve Fund. No reserve fund has been or will be established for the Bonds. (b) No Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements or refund the Refunded Notes, and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt Service Account, there are no other funds pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Bonds if the Issuer encounters financial difficulty. Section 3.11 Purpose Investment Yield. The proceeds of the Bonds will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.12 Issue Price and Yield on Bonds. (a) Issue Price. Based on the Purchaser's certifications in Exhibit C-1 and the Municipal Advisor's certifications in Exhibit C-2, the Issuer hereby elects to establish the issue prices of the Bonds 11 pursuant to Regulations § 1.148-1 (t)(2)(iii) (relating to the so-called "competitive sales rule"). Therefore, the aggregate issue price of the Bonds for such purpose is $2,178, 123.35. (b) Bond Yield. Based on the issue price, the Yield on the Bonds is 3.0003%, as computed by Bond Counsel as shown on Schedule I . The Issuer has not entered into an interest rate swap agreement with respect to any portion of the proceeds of the Bonds. Section 3.13 Miscellaneous Arbitrage Matters. (a) No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between tax- exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax- exempt bond market. (b) No Over-Issuance. The sale proceeds of the Bonds, together with expected Investment earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Bonds as described above. Section 3.14 Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Certificate, the Issuer does not expect that the Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code§ 148 and the Regulations. ARTICLE IV POST-ISSUANCE TAX COMPLIANCE Section 4.01 General. (a) Purpose of Article. The purpose of this Article is to supplement the Tax Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Issuer recognizes that interest on the Bonds will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post-Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with tax- exempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to the Post-Issuance Tax Requirements that the Issuer has established. The provisions of this Tax Certificate are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern. (c) Bond Compliance Officer. The Issuer, when necessary to fulfill the Post-Issuance Tax Requirements, will, through its Bond Compliance Officer, sign Form 8038-T in connection with the payment of arbitrage rebate or yield reduction amounts, participate in any federal income tax audit of the Bonds or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a 12 remedial action procedure pursuant to Regulations § 1.141-12. In each case, all costs and expenses incurred by the Issuer shall be treated as a reasonable cost of administering the Bonds and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Bond Resolution or State law. Section 4.02 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements. (a) Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File for the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in advice or a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (A) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (B) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (C) exhibit a high degree of legibility and readability both electronically and in hardcopy, (D) provide support for other books and records of the Issuer and (E) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Issuer's premises. (b) Accounting and A/location of Bond Proceeds and Qualified Equity to Expenditures. The Bond Compliance Officer will account for the investment and expenditure of Bond proceeds in the level of detail required by the Tax Compliance Procedure. The expected allocation of the proceeds of the Bonds and Qualified Equity to expenditures for the Improvements is set forth on Exhibit D. The Bond Compliance Officer will supplement the expected allocation of Bond proceeds and Qualified Equity to expenditures with a Final Written Allocation as required by the Tax Compliance Procedure. The Final Written Allocation will also evidence the allocation of proceeds of the Original Obligations to the Financed Improvements. A sample form of Final Written Allocation is attached as Exhibit F. ( c) Annual Compliance Checklist. Attached as Exhibit E is a sample Annual Compliance Checklist for the Bonds. The Bond Compliance Officer will prepare and complete an Annual Compliance Checklist for the Financed Improvements at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer will take the actions identified in advice of Bond Counsel or as described in the Tax Compliance Procedure to correct any deficiency. ( d) Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining and delivering to the Issuer any advice or Opinion of Bond Counsel required by this Tax Certificate or the Annual Compliance Checklist. Section 4.03 Temporary Periods/ Yield Restriction. Except as described below, Gross Proceeds must not be invested at a Yield greater than the Yield on the Bonds: (a) Improvement Fund. Bond proceeds deposited in the Improvement Fund allocable to financing the New Money Portion and investment earnings on such proceeds may be invested without Yield restriction for up to three years following the Issue Date. If any such unspent proceeds remain in the Improvement Fund after three years, those amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations § 1.148- 5( c ), regardless of whether the Bonds are exempt from the arbitrage rebate or yield reduction amounts requirements of Code§ 148. 13 (b) Proceeds Allocable to Current Refunding. Bond proceeds deposited in the Improvement Fund or otherwise allocable to a current refunding of the Refunded Notes (see Section 3. 0 7) may be invested without Yield restriction for up to 90 days after the Issue Date. ( c) Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for one year after the date of receipt of such earnings. (d) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. (e) Rebate Fund. Money, other than sale proceeds or Investment proceeds, on deposit in the Rebate Fund may be invested without Yield restriction. Section 4.04 Procedures for Establishing Fair Market Value. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with Regulations§ 1.148-5. (b) Established Securities Market. Except for Investments purchased for a Yield-restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code§ 1273), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using one of the paragraphs below. The fair market value of Investments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations § 1.148-5. (c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if ( 1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. (d) Guaranteed Investment Contracts. The Issuer is applying Regulations § 1.148- 5(d)(6)(iii)(A) to the Bonds. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: (i) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. 14 (ii) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the Yield or the cost of the Guaranteed Investment Contract. (iii) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (A) that the potential provider did not consult with any other potential provider about its bid, (B) that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the Issuer or any other person (whether or not in connection with the bond issue), and (C) that the bid is not being submitted solely as a courtesy to the Issuer or any other person, for purposes of satisfying the requirements of the Regulations. (iv) The terms of the bid specifications are "commercially reasonable." A term is commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (v) The terms of the solicitation take into account the Issuer's reasonably expected deposit and draw-down schedule for the amounts to be invested. (vi) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (vii) At least three "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of Investments being purchased. (2) Bids Received. The bids received must meet all of the following requirements: (i) At least three bids are received from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (A) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the Issue Date of the issue, (B) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue, and (C) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (ii) At least one of the three bids received is from a reasonably competitive provider, as defined above. (iii) If an agent or broker is used to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. 15 (3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined net of any broker's fees). ( 4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. · (5) Records. The Issuer retains the following records with the Bond documents until three years after the last outstanding Bond is redeemed: (A) A copy of the Guaranteed Investment Contract. (B) The receipt or other record of the amount actually paid by the Issuer for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Issuer, and the certification as to fees paid, described in paragraph ( d)( 4) above. (C) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (D) The bid solicitation form and, if the terms of the Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: (1) at least three bids on the Investment must be received from persons with no financial interest in the Bonds (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.05 Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. A portion of the Gross Proceeds of the Bonds may be exempt from rebate pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Bonds and will not otherwise affect the application of the Investment limitations described in Section 4.03. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4. 06 applies even if a portion of the Gross Proceeds of the Bonds is exempt from the rebate requirement. To the extent all or a portion of the Bonds is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.06. The Issuer may defer the final rebate Computation Date and the payment of rebate for the Bonds to the extent permitted by Regulations§§ 1.148-?(b)(l) and l .148-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. (1) The Issuer expects that at least 75% of the Available Construction Proceeds will be used for construction or rehabilitation expenditures for property owned by the Issuer. 16 (2) The following optional rebate spending exceptions can apply to the New Money Portion, the Refunding Portion and the transferred proceeds of the Original Obligations: New Money Portion: (A) 6-month spending exception (Code § 148(f)(4)(B) and Regulations § 1.148-7(c)). (B) (C) 7(e)). 18-month spending exception (Regulations§ 1.148-7(d)). 2-year spending exception (Code§ 148(f)(4)(C) and Regulations§ 1.148- Refunding Portion: 6-month spending exception (Code § 148(f)(4)(B) and Regulations § 1.148-7( c )). Transferred proceeds of the Original Obligations: 6, 18, or 24-month spending exception (Regulations § 1.148-7(b )(1 )(i)) in accordance with the applicable federal tax certificate for the Original Obligations. (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. ( d) Bona Fide Debt Service Fund. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, Investment earnings in the Debt Service Account cannot be taken into account in computing arbitrage rebate and yield reduction amounts (1) with respect to such portion that meets the 6-month, 18-month or 2-year spending exception, or (2) for a given Bond Year, if the gross earnings on the Debt Service Account for such Bond Year are less than $100,000. If the average annual debt service on the Bonds does not exceed $2,500,000, the $100,000 earnings test may be treated as satisfied in every Bond Year. ( e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Issuer must continue to comply with Section 4.06. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met: (1) Using Adjusted Gross Proceeds or Available Construction Proceeds to pay principal of any Bonds is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The six-month spending exception generally is met if all Adjusted Gross Proceeds of the New Money Portion or the Refunding Portion, as applicable, are spent within six months following the Issue Date. The test may still be satisfied even ifup to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within one year of the Issue Date. (3) The 18-month spending exception generally is met if all Adjusted Gross Proceeds of the New Money Portion are spent in accordance with the following schedule: 17 Time Period After the Issue Date 6 months 12 months 18 months (Final) Minimum Percentage of Adjusted Gross Proceeds Spent 15% 60% 100% ( 4) The 2-year spending exception generally is met if all Available Construction Proceeds are spent in accordance with the following schedule: Time Period After the Issue Date 6 months 12 months 18 months 24 months (Final) Minimum Percentage of Available Construction Proceeds Spent 10% 45% 75% 100% (5) For purposes of applying the 18-month and 2-year spending exceptions only, the failure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to complete the Financed Improvements and the failure does not exceed the lesser of 3% of the aggregate issue price the New Money Portion or $250,000. No such exception applies for any other spending period. (6) For purposes of applying the 18-month and 2-year spending exceptions only, the Bonds meet the applicable spending test even if, at the end of the final spending period, proceeds not exceeding a Reasonable Retainage remain unspent, so long as such Reasonable Retainage is spent within 30 months after the Issue Date in the case of the 18-month exception or 3 years after the Issue Date in the case of the 2-year spending exception. (7) Spending exceptions may be applied separately to the New Money Portion and the Refunding Portion of the Bonds. Section 4.06 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts. (a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment reports relating to each fund held by it that contains Gross Proceeds of the Bonds together with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other than the Issuer annually as of the end of each Bond Year and not later than ten days following each Computation Date. Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (I) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Bonds, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and (I 0) disposition 18 date. Such records may be supplied in electronic form . The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Issuer together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate and yield reduction amounts were determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. (c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to the United States the rebate and yield reduction amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 ( d) Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst, then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. (e) Filing Requirements. The Issuer will file or cause to be filed with the IRS such reports or other documents as are required by the Code in accordance with advice of Bond Counsel. (f) Survival after Defeasance. Notwithstanding anything in the Bond Resolution to the contrary, the obligation to pay arbitrage rebate and yield reduction amounts to the United States will survive the payment or def easance of the Bonds. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.01 Term of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Bonds and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Bonds have been fully paid and all such Bonds are cancelled; provided that the provisions of Article IV of this Tax Certificate regarding payment of arbitrage rebate and yield reduction amounts and all related penalties and interest will remain in effect until all such amounts are paid to the United States and the provisions of Section 4.02 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.02 Amendments. This Tax Certificate may be amended from time to time by the Issuer without notice to or the consent of any of the Bondowners, but only if such amendment is in writing and is accompanied by an Opinion of Bond Counsel to the effect that, under then-existing law, assuming compliance with this Tax Certificate as so amended and the Bond Resolution, such amendment will not cause interest on any Bond to be included in gross income for federal income tax purposes. No amendment will become effective until the Issuer receives an Opinion of Bond Counsel, addressed to the Issuer that the 19 amendment will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 5.03 Opinion of Bond Counsel. The Issuer may deviate from the provisions of this Tax Certificate if furnished with an Opinion of Bond Counsel to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. The Issuer further agrees to comply with any further or different instructions provided in an Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Bonds or the exclusion from gross income of interest on the Bonds. Section 5.04 Reliance. In delivering this Tax Certificate the Issuer is making only those certifications, representations and agreements as are specifically attributed to them in this Tax Certificate. The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations are reasonable. The Issuer understands that its certifications will be relied upon by Bond Counsel in rendering its opinion as to the validity of the Bonds and the exclusion from federal gross income of the interest on the Bonds. Section 5.05 Severability. If any provision in this Tax Certificate or in the Bonds is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired. Section 5.06 Benefit of Certificate. This Tax Certificate is binding upon the Issuer, its respective successors and assigns, and inures to the benefit of the Issuer and the owners of the Bonds. Nothing in this Tax Certificate, the Bond Resolution or the Bonds, express or implied, gives to any person, other than the Issuer, its successors and assigns, and the owners of the Bonds, any benefit or any legal or equitable right, remedy or claim under this Tax Certificate. Section 5.07 Default, Breach and Enforcement. Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the Bondowners pursuant to the terms of the Bond Resolution or any other document which references this Tax Certificate and gives remedies for a misrepresentation or breach thereof. Section 5.08 Governing Law. This Tax Certificate will be governed by and construed in accordance with the laws of the State. Section 5.09 Electronic Transactions. The transaction described in this Tax Certificate may be conducted, and related documents may be stored, by electronic means. Section 5.10 Execution in Counterparts. This Tax Certificate may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute the same instrument. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 20 THE UNDERSIGNED, Mayor, Clerk and Finance Director of the Issuer, by their execution of this Tax Certificate hereby make the foregoing certifications, representations, and agreements contained in this Tax Certificate on behalf of the Issuer, as of the Issue Date. CITY OF SALINA, KANSAS By: Mayor By: ~~~...-....."LJ~/;_J;&~--- Clerk By: -~ ___ ;12_.:L._d--__ Finance Director (Signature Page to Federal Tax Certificate -Bonds) EXHIBIT A IRS FORM 8038-G $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 A-1 I# GILM01'_EBELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 / (816) 221-1018 FAX I gilmorebell.com VIA FEDERAL EXPRESS Internal Revenue Service Center Ogden, Utah 84201 December 12, 2018 Ref : 600596 20180 Dep . Dat.e : 12Dec18 Wg t : 0 . 30 LBS DV : SHIPPING : SPECIAL: HANDLING : 0 .00 TOTAL : Svcs : ** 2DRY ** NSR TRCK : 4692 5825 3298 Re: $2,090,000 General Obligation Internal Improvement Bonds, Series 2018-A of the City of Salina, Kansas Ladies and Gentlemen: 13 .16 0 . 76 0 .00 13 .92 Enclosed for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986 Form 8038- G, Information Return for Tax-Exempt Governmental Obligations, being filed with respect to the above- captioned transaction. If you have any questions, please do not hesitate to contact me. GMR:hde Enclosure 600596.20180 Very truly yours, Gina M. Riekhof December 14,2018 Dear Customer: The following is the proof-of-delivery for tracking number 469258253298. Delivery lnfonnation: Status: Signed for by: Service type: Special Handling: Shipping lnfonnation: Tracking number: Recipient: Delivered P.DENNY FedEx 2Day Deliver Weekday No Signature Required 469258253298 INTERNAL REVENUE SERVICE CENTER 1973 N. RULON WHITE BLVD. OGDEN, UT 84201 US Reference Thank you for choosing FedEx. Delivered to: Delivery location: Delivery date: Ship date: Weight: Shipper: SANDY CASHAW Gilmore & Bell, P.C. Shipping/Receiving 1973 N RULON WHITE BLVD OGDEN, UT 84201 Dec 13, 2018 09:56 Dec 12, 2018 0.5 lbs/0.2 kg 2405 Grand Blvd., Suite 1100 Kansas City, MO 641082521 US 600596.20180 Form8038•G ~nformation Return for Tax~Exempt Governmental Bonds ~Under Internal Revenue Code section 149(e) (Rev. September 2018) .,_ See separate instructions. OMB No. 1545-0720 Department of the Treasury Caution: If the issue price is under $100, 000, use Form 8038-GC. Internal Revenue Service ,.. Go to www.irs.gov/F8038G for instructions and the latest information. •~1ni• Reporting Authority If Amended Return, check here Jo.-0 1 Issuer's name 2 Issuer's employer identification number (EIN) Citv of Salina. Kansas 48-6017288 3a Name of person (oiher than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a Gina M. Riekhof Gilmore & Bell. P.C .. Bond Counsel 816-221 -1000 4 Number and street (or P.O. box if mail is not delivered to street address} I Room/suite 5 Report number (For IRS Use Only) 2405 Grand Boulevard I 3 I· 1 ·" 1100 f', 6 City, town, or post office, state, and ZIP code 7 Date of issue Kansas Citv. Missouri 64108 11/27/2018 8 Name of Issue 9 CUSIP number General Oblioation Internal lmorovement Bonds, Series 2018-A 794744 BM3 10a Name and title of officer or other employee of the issuer whom the IRS may call for more Information (see 10b Telephone number of officer or other Instructions} employee shown on 1 Oa Debbie Pack, Director of Finance and Administration 785-309-5735 . 11°..P,.I•illll Type of Issue (enter !he issue price). See the instructions and attach schedule. 11 Education. 11 12 Health and hospital . 12 13 Transportation 13 14 Public safety . 14 15 Environment (including sewage bonds) 15 16 Housing 16 17 Utilities 17 18 Other. Describe>-Public lmerovements (Streets, Sidewalks, Other Public lmerovements) 18 2,178 123 35 19a If bonds are T ANs or RANs, check only box 19a Jjo-0 .. ~,>" b If bonds are BANs, check only box 19b .. 0 ' .. :r 20 If bonds are in the form of a lease or installment sale, check box . . . . . . . . . i.--0 ,? Im ll Description of Bonds. Complete for the entire issue for which this form is beinq filed. (a} Final maturity date (b) Issue price (c) Stated redemption (d} Weighted (e) Yield price at maturity average maturity 21 10/01/2033 $ 2.178123.35 $ 2,090 000.00 8.4223 vears 3.0003 % l':l;Tll• •'JI Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 56, 755 25 Proceeds used for credit enhancement 25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . 27 2.098,258 28 Proceeds used to refund prior taxable bonds. Complete Part V 28 2g Total (add lines 24 through 28) . 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ·~1ilat• Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) 22 23 2,178,123 35 01 ' ·~ 60 ;'4; 29 2.155 013 61 30 23 109 74 0.0597 years NIA years 12/01/2018 34 Enter the date(s) the refunded bonds were issued )!.. (MM/DD/YYYY) 1?/281?017. 07/30/2QJ 8 For Paperwork Reduction Act Notice, see separate instructions. cat. No. 63773S Form 8038-G (Rev. 9-2018) Form 8038-G (Rev. 9-2018) Page2 l:lffil•'H Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions 36a b Enter the final maturity date of the GIC fi"-(MM/DD/YYYY) c Enter the name of the GIC provider ll>- 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units 37 38a If this issue 1s a loan made from the proceeds of another tax-exempt issue, check box .~ 0 and enter the following information: b Enter the date of the master pool bond,.. (MM/DD/YYYY) ---------------- c Enter the EIN of the issuer of the master pool bond)>------------------- d Enter the name of the issuer of the master pool bond ... ------------------ 39 If the issuer has d~signated the issue under section 265(b)(3)(8)0)(111) (small issuer exception), check box ... D 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . ... O 41 a If the issuer has identified a hedge, check here,.. D and enter the following information: b Name of hedge provider lll>- c Type of hedge.,... ------------------- d Term of hedge.,.--------------------- 42 If the issuer has superintegrated the hedge, check box .,... D 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . .,.. 0 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . ,.. 0 45a If some portion of the proceeds was used to reimburse expenditures, check here ~ 0 and enter the amount of reimbursement . . Iii'-$23,109.74 b Enter the date the official intent was ado ted .,_ MM/DD/YYY 06/27/2016 Signature and Consent Paid Preparer Use Only Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process ~to the person tha ve authorized above. ~ Signature of issuer's authorized representative Date 1 PrinVType preparer's name Gina Riekhof Firm's name ~ Gilmore & Bell, P.C. L Debbie Pack, Finance Director r Type or print name and title Date Check D If PTIN I\ z:=t· 16 self-employed P02051171 Firm's EIN I> 43-1611738 Phone no. 816-221-1000 Form 8038-G (Rev. 9-2018) EXHIBITB RECEIPT I?OR PURCHASE PRICE $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL Th1PROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 The undersigned Director of Finance and Administration of the City of Salina, Kansas, this day received from Bernardi Securities, Inc., Chicago, Illinois, the original purchaser of the above-described bonds (the "Bonds"), the full purchase price of the Bonds, said purchase price and net amount received by the Issuer being calculated as follows: Principal Amount... ............................... . Less Underwriting Discount... .............. . Plus Net Original Issue Premium ........ . Total Purchase Price ........................... . Less Good Faith Deposit received on Sale Date ................................... . Net Amount Received at Closing ........ . DATED: November 27, 2018. B-1 $2,090,000.00 (18,287.50) 88.123.35 $2,159,835.85 $( 43,200.00) $2,116,635.85 CITY OF SALINA, KANSAS Director of Finance and Administration EXHIBITC-1 PURCHASER'S RECEIPT FOR BONDS AND CLOSING CERTIFICATE $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 The undersigned, on behalf of Bernardi Securities, Inc. (the "Purchaser"), as the Purchaser of the above-described Bonds (the "Bonds"), being issued on the date of this Certificate by the City of Salina, Kansas (the "Issuer"), certifies and represents as follows: 1. Receipt for Bonds. The Purchaser acknowledges receipt on the date hereof of all of the Bonds, consisting of fully registered Bonds in authorized denominations in a form acceptable to the Purchaser. 2. Issue Price. (a) Public Offering. The Purchaser offered all of the Bonds to the Public (as defined below) in a bona fide initial offering. (b) Reasonably Expected Initial Offering Price. As of the sale date of the Bonds (November 1, 2018), the reasonably expected initial offering prices of the Bonds to the Public by the Purchaser are the prices listed in Attachment A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Purchaser in formulating its bid to purchase the Bonds. (c) Defined Terms. (i) The term "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (ii) The term "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" is defined in U.S. Treasury Regulation§ 1.150-l(b) which generally provides that the term related party means any two or more persons who have a greater than 50 percent common ownership, directly or indirectly. (iii) The term "Underwriter" means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third party distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this Certificate represents the Purchaser's interpretation of any laws, including specifically Sections 103 and C-1-1 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations ther~under. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, by George K. Baum & Company, Municipal Advisor to the Issuer, in executing the Municipal Advisor's Certificate Regarding the Competitive Sale relating to the Bonds, and by Gilmore & Bell, P.C., Bond Counsel to the Issuer, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: November27, 2018 C-1-2 Attachment A Maturity Yield to Call Call Pr~u111 Bond Componenr Dar.. Amount Ra•• Yield Price-Maturity Date Pnce-(-Discount) S•rial Coupon: 10/0112019 115,000 4.00~. 2.00~• 101.664 1,913.60 10/0112020 110,000 4.000% 2.15~• 103.325 3,657.50 10/01 12021 115,000 4.00~• 2-25~• 104.793 5.511.95 10/0112022 120,000 4.000,. 2-35~• 106.028 7,233.60 10101 12023 120,000 4.000'-6 2.450"/o 107.037 8,444.40 10/01/2024 125,000 4.000"/o 2.55~• 107.824 9.780.00 1010112025 130.000 4.000% 2.65~• 108.397 10,916.10 10/0112026 135.000 4.000% 2.700"/o 108.071 c '.!.844~~ 10/0112025 100.000 10,895.85 10/0112027 145,000 4.000% 2.75°'' 107.747 c 2.996% 10/0112025 100.000 11.233.15 10/0112028 150,000 4.000% 2.S~'o 107.424 c 3.118,. 10/01 /2025 100.000 11,136.00 1010112029 155.000 4.000% 2.85~• 107.102 c 3.219% 10/01 /2025 100.000 11,008.10 10/0112030 160,000 3.150% 3.200"/e 99.507 (788.80) 10/01/2031 165,000 3.250% 3.3~• 99.477 (862.95) 10/0112032 170,000 3.350% 3.4~1 99.448 (938.40) 1010112033 175,000 3.400"/o 3.450"1• 99.419 (1,016.75) 2.090,000 88,123.35 A-1 EXHIBITC-2 MUNICIPAL ADVISOR'S CERTIFICATE REGARDING THE COMPETITIVE SALE $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 The undersigned, on behalf of George K. Baum & Company (the "Municipal Advisor"), as the Municipal Advisor to the City of Salina, Kansas (the "Issuer") in connection with the issuance of the above- described bonds (the "Bonds") by the Issuer, has assisted the Issuer in soliciting and receiving bids from potential underwriters in connection with the sale of the Bonds in a competitive bidding process in which bids were requested for the purchase of the Bonds at specified written terms, and hereby certifies as set forth below with respect to the bidding process and award of the Bonds: 1. The Bonds were offered for sale at specified written terms more particularly described in the Notice of Sale, which was distributed to potential bidders, a copy of which is attached to this Certificate as Attachment 1. 2. The Notice of Sale was disseminated electronically through PARITY® and MuniOS, and a copy of the Notice of Sale (or a summary thereof) was published in in the Salina Journal, a newspaper of general circulation in Saline County, Kansas, on October 24, 2018, and the Kansas Register on October 25, 2018. The method of distribution of the Notice of Sale is regularly used for purposes of disseminating notices of sale of new issuances of municipal ~onds, and notices disseminated in such manner are widely available to potential bidders. 3. To the knowledge of the Municipal Advisor, all bidders were offered an equal opportunity to bid to purchase the Bonds, and the bidding process did not afford any opportunity for bidders to review other bids before providing a bid (that is, no "last-look"). 4. The Issuer received bids from at least three bidders who represented that each has an established industry reputation for underwriting new issuances of municipal bonds. Based upon the Municipal Advisor's knowledge and experience in acting as the municipal advisor for other municipal issues, the Municipal Advisor believes those representations to be accurate. Copies of the bids received are attached to this Certificate as Attachment 2. 5. The winning bidder was Bernardi Securities, Inc., Chicago, Illinois (the "Original Purchaser"), whose bid was determined to be the best conforming bid in accordance with the terms set forth in the Notice of Sale, as shown in the bid comparison attached as Attachment 3 to this Certificate. The Issuer awarded the Bonds to the Original Purchaser. The representations set forth in this certificate are limited to factual matters only. Nothing in this Certificate represents the Municipal Advisor's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Gilmore & Bell, P.C., Bond Counsel, in rendering its opinion relating C-2-1 to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: November 27, 2018 By: Title:-----~-------- C-2-2 Attachment 1 Notice of Sale NOTICE OF SALE CITY OF SALINA, KANSAS $13,500,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2018-2 $2,160,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Written and electronic (as explained below) bids for the purchase of the above-referenced notes (the "Notes") and bonds (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the undersigned Clerk of the Issuer at the address hereinafter set forth in the case of written bids, and via PARITY® in the case of electronic bids, on November 1, 2018 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2018-2 Notes Series 2018-A Bonds SUBMITTAL HOUR (Central Time) 12:00 p.m. 1:00 p.m. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon will be acted upon immediately thereafter by the Issuer's Mayor or Vice Mayor. No oral or auction bids will be considered. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated November 27, 2018 (the "Dated Date"), and will become due on November 15, 2019. The Notes will bear interest from the Dated Date at rates to be determined when the Notes are sold as hereinafter provided, which interest will be payable at maturity or on earlier redemption (the "Interest Payment Date"). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of each Note and the interest thereon will be payable at maturity or earlier redemption to the owners thereof whose names are on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. •Preliminary; subject to change as provided in "Adjustment of Issue Size, " herein. Note Registration. The Notes will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas. The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Book-Entry-Only System. The Notes shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Notes. During the term of the Notes, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Notes to DTC or its nominee as the Registered Owner of the Notes, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Notes to its participants who shall be responsible for transmitting payments to beneficial owners of the Notes in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Notes, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Notes would adversely affect the interests of the beneficial owners of the Notes, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Notes in the form of fully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system of registration of the Notes and DTC. Redemption of Notes Prior to Maturity. General. Whenever the Issuer is to select Notes for the purpose of redemption, it will, in the case of Notes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on June 1, 2019, and thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Notice and Effect of Call for Redemption. Unless waived by any owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar and any provider of municipal bond insurance. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by Kansas law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. 2 Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101 et seq. (specifically including K.S.A. 10-123), K.S.A. 10-620 et seq., K.S.A. 12-63 lr et seq., K.S .A. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 65-163u, all as amended, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvements and refunding a portion of certain outstanding general obligation notes. The Notes shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated November 27, 2018 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount* Year Amount* 2019 $125,000 2027 $145,000 2020 115,000 2028 150,000 2021 120,000 2029 155,000 2022 125,000 2030 165,000 2023 130,000 2031 170,000 2024 130,000 2032 175,000 2025 135,000 2033 180,000 2026 140,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2019 (the "Interest Payment Dates"). Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. * Preliminary; subject to change as provided in "Adjustment of Issue Size," herein. 3 Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Owners. Book-Entry-Only System. The Bonds will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee ofDTC and no beneficial owner will receive certificates representing their interests in the Bonds. During the term of the Bonds, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Bonds to DTC or its nominee as the Registered Owner of the Bonds, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Bonds to its participants who shall be responsible for transmitting payments to beneficial owners of the Bonds in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Bonds, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Bonds would adversely affect the interests of the beneficial owners of the Bonds, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and DTC. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose of redemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, ifless than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2026, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2025, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITY®. Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar and any provider of municipal bond insurance. In addition, the Issuer shall cause the Bond Registrar to give written notice of 4 redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by Kansas law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security. The Bonds are being issued pursuant to K.S.A. 10-101 et seq., K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., and K.S.A. 12-6a01 et seq., all as amended, and an ordinance and a resolution adopted by the Governing Body (collectively, the "Bond Resolution") for the purpose of permanently financing the cost of certain public improvements and refunding a portion of certain outstanding general obligation notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE NOTES AND THE BONDS Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Obligations and the principal amount of any maturity in order to properly size the Obligations based on the required funding needs and offering prices and interest rates bid on the Obligations. Notwithstanding the requirements of the section herein entitled "Establishment of Issue Price," if requested by the Municipal Advisor, the Successful Bidder(s) shall within 20 minutes of such request provide the Municipal Advisor with the initial offering prices of the Obligations to the public so as to allow for proper resizing of the Obligations. The Successful Bidder(s) may not withdraw its bid or change the interest rates bid as a result of any changes made to the principal amount of the Obligations or principal of any maturity as described herein, provided, however, that the total principal amount of the Notes or the Bonds will not be changed by more than 15% without the consent of the Successful Bidder(s). If there is an increase or decrease in the final aggregate principal amount of the Obligations or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder(s) by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 4:00 p.m., Central Time, on the Sale Date. The net production as a percentage of the principal amount of the Obligations generated from the bid(s) of the Successful Bidder(s) will not be decreased as a result of any change in the total principal amount of the Obligations. Submission of Bids. Written bids must be made on forms which may be procured from the Clerk or the Municipal Advisor and shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2018-2" or "Proposal for General Obligation Internal Improvement Bonds, Series 2018-A," as applicable. Written bids submitted by facsimile should not be preceded by a cover sheet and should be sent only once to (785) 309-5738. Confirmation ofreceipt of facsimile bids may be made by contacting the Municipal Advisor at the number listed below. Electronic bids via PARITY® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. If provisions of this Notice of Sale conflict with those of PARITY®, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date accompanied by the Deposit (as 5 hereinafter defined), which may be submitted separately as described below. The Issuer and Municipal Advisor shall not be responsible for failure of transmission of facsimile or delivery by mail or in person of any bid. PARITY®. Information about the electronic bidding services of PARITY® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) no interest rate may exceed 5.00%; and (c) no supplemental interest payments will be considered. No bid for less than 99.50% of the principal amount of the Notes and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5.00%; (c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1%; and (e) no interest rates of zero percent are permitted. The difference between the highest rate specified and the lowest rate specified cannot exceed 4.00%. No bid for less than 100% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. For the Obligations: Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes or the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment oflssue Price" in this Notice. Good Faith Deposit. All Obligations: Each bid for the Obligations shall be accompanied by a good faith deposit (the "Deposit") payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the bidder to comply with the terms of its bid. The amount of the Deposit shall be 2.00% of the principal amount of each respective Obligation. The Deposit may be submitted in either of the following forms: (a) Certified or Cashier 's Check. Certified or cashier's check drawn on a bank located in the United States of America received by the Issuer or the Municipal Advisor prior to the Submittal Hour; or (b) Wire Transfer. Wire transfer submitted by the Successful Bidder in Federal Reserve funds, immediately available for use by the Issuer not later than 4:00 p.m. applicable Central Time on the Sale Date (wire transfer information may be obtained from the Municipal Advisor at the addresses set forth below). Contemporaneously with the submission of a wire transfer Deposit, such bidder shall send an email to the Issuer and the Municipal Advisor at the email address set forth below, including the following information: (a) notification that a wire transfer has been made; (b) the amount of the wire transfer; and (c) 6 return wire transfer instructions in the event such bid is unsuccessful. Checks submitted for Deposits by unsuccessful bidders will be returned; wire transfer Deposits submitted by unsuccessful bidders will not be accepted or shall be returned in the same manner received on the next business day following the Sale Date. The Issuer reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. No interest on the Deposit will be paid by the Issuer. If a bid is accepted, the Deposit, or the proceeds thereof, will be held by the Issuer until the Successful Bidder has complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder or deducted from the purchase price at the option of the Issuer. If a bid is accepted but the Issuer fails to deliver the Bonds to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder. If a bid is accepted but the bidder defaults in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: The award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, if any, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders are requested to provide a calculation of the TIC for the Bonds on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Municipal Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will be destroyed. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within Kansas with regard to such dispute. The Issuer's acceptance, including electronic acceptance through PARITY®, of the Successful Bidder(s)' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a bond purchase agreement between the Issuer and the Successful Bidder( s) for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal 7 Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Bond Ratings. The outstanding general obligation temporary notes of the Issuer are rated "MIG I" by Moody's Investors Service and the outstanding general obligation bonds of the Issuer are rated "Aa3 " by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for a rating on the Obligations herein offered for sale. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations. If the Obligations qualify for municipal bond insurance, and any bidder desires to purchase such policy, such indication and the name of the desired insurer must be set forth on the bidder's Official Bid Form. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest bid to the Issuer. If the Successful Bidder(s) elect to purchase the Bonds or Notes with municipal bond insurance, certain rating agencies will assign their ratings to the Bonds or Notes with the understanding that upon delivery of the Bonds or Notes, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy after the award of the Bonds or Notes shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Bonds or Notes. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. All expenses in relation to the assignment and printing of CU SIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about NOVEMBER 27, 2018 (the "Closing Date"), to DTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name of DTC . Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Notes or the Bonds and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each, an "Issue Price Certificate") containing the following for each maturity of the Notes or the Bonds: (I) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-1 (t) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Notes or the Bonds for its own account in a 8 capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Notes or the Bonds for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Municipal Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Notes and the Bonds pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (I) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Notes or Bonds from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and ( 4) the Issuer anticipates awarding the sale of the Bonds and/or Notes, as applicable, to the bidder that provides a bid with the lowest NIC or TIC, as applicable, in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Notes or the Bonds as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms (I) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Notes or the Bonds, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Notes and the Bonds, and (2) that it has an established industry reputation for underwriting municipal securities such as the Notes and the Bonds. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. The Successful Bidder(s) shall promptly advise the Issuer on the Sale Date if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer wil l treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder(s) to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise the "hold-the-offering-price" option for determining the issue price of any remaining maturities, the Successful Bidder(s) shall execute and deliver to the Issuer a written acknowledgement specifying the maturities to which "hold-the-offering-price" option shall apply, and the Issuer will apply the initial offering price to the public provided in the bid as the issue price for such maturities. If the Successful Bidder(s) do not exercise the "hold-the-offering-price" option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price for the Obligations submitted in the bid of the Successful Bidder(s). Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated October 24, 2018, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Municipal Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder( s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32. Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information 9 necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2017 was $481,461,005. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold but excluding temporary notes to be redeemed with proceeds from the sale of the Obligations, is $73,070,000. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and Kansas income tax matters relating to the interest on the Obligations. Additional Information. Additional information regarding the Obligations may be obtained from the undersigned, or from the Municipal Advisor, at the addresses set forth below: DATED: October 22, 2018. CITY OF SALINA, KANSAS By Shandi Wicks, Clerk Written and Facsimile Bid and Good Faith Deposit Delivery Address: Mike Schrage, Interim City Manager City of Salina, Kansas 300 West Ash Room 202 Salina, Kansas 67402 Phone No.: (785) 309-5700 Fax No.: (785) 309-5711 Email: mike.schrage@salina.org Municipal Advisor: George K. Baum & Company 4801 Main Street, Suite 500 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 283-5137 Fax No.: (816) 283-5326 Email: arteberry@gkbaum.com 10 TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES November I, 2018 For $13,500,000* principal amount of General Obligation Temporary Notes, Series 2018-2, of the City of Salina, Kansas, to be dated November 27, 2018, as described in your Notice of Sale dated October 22, 2018 (the "Notice"), said Notes to bear interest as fol lows: Maturity November 15 2019 Principal Amount* $13,500,000 Interest Rate % ---- *Subject to change; see the Notice. the undersigned will pay the purchase price for the Notes set forth below, plus accrued interest to the date of delivery. Principal Amount ..................................................................................................................................................... $13,500,000.00* Less Discount (not to exceed $67,500 or 0.50%) .................................................................................... ~--------~ Plus Premium (if any) ............................................................................................................................. _________ _ Total Purchase Price ............................................................................................................................ $ _________ _ Total interest cost to maturity at the rate(s) specified .......................................................................... $ _________ _ Net interest cost.. .................................................................................................................................. $ _________ _ Average Annual Net Interest Cost ........................................................................................................................... _____ % This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in said Notice. A cashier's or certified check or a wire transfer in the amount of2.00% of the principal amount of the Notes payable to the order of the Issuer, submitted in the manner set forth in the Notice accompanies this proposal as an evidence of good faith. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule l 5c2-l 2 of the Securities and Exchange Commission and a note purchase agreement for purposes of the laws of the State of Kansas. (LIST ACCOUNT MEMBERS ON REVERSE) ACCEPTANCE Submitted by: --------------- By: --------------Telephone No. Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on November I, 2018. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal fonn shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITY®, at or prior to 12:00 p.m., Central Time, on November 1, 2018. Any bid received after such time will not be accepted or shall be returned to the bidder. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS November 1, 2018 For $2, 160,000* principal amount of General Obligation Internal Improvement Bonds, Series 2018-A, of the City of Salina, Kansas, to be dated November 27, 2018, as described in the Notice of Sale dated October 22, 2018 (the "Notice"), said Bonds to bear interest as follows: Stated Annual Stated Annual Maturity Principal Rate of Maturity Principal Rate of October 1 Amount• Interest October 1 Amount* Interest 2019 $125,000 % 2027 $145,000 % 2020 115,000 % 2028 150,000 % 2021 120,000 % 2029 155,000 % 2022 125,000 % 2030 165,000 % 2023 130,000 % 2031 170,000 % 2024 130,000 % 2032 175,000 % 2025 135,000 % 2033 180,000 % 2026 140,000 % % *Subject to change; see the Notice. the undersigned will pay the purchase price for the Bonds set forth below, plus accrued interest to the date of delivery. Principal Amount ......................................................................................................................................................... $2, 160,000.00* Plus Premium (if any) ............................................................................................................................... _________ _ Total Purchase Price .............................................................................................................................. $ _________ _ Total interest cost to maturity at the rates specified .............................................................................. $ _________ _ Net interest cost (adjusted for Premium) ................................................................................................ $ _________ _ True Interest Cost ..... .................................................................................................. .......... ..................................... % D The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM) [ ). Circle one or complete blank. D The Bidder elects to have the following Tenn Bonds: Maturity Date Years Amount* October 1, to $ _____ _ October I,__ to $ _____ _ *subject to mandatory redemption requirements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in said Notice. A cashier's or certified check or a wire transfer in the amount of2.00% of the principal amount of the Bonds payable to the order of the Issuer, submitted in the manner set forth in the Notice accompanies this proposal as an evidence of good faith. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule l 5c2-l 2 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. (LIST ACCOUNT MEMBERS ON REVERSE) Submitted by:--------------~ By: -------------- Telephone No. '---'--------------- ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on November I, 2018. Attest: Clerk NOTE: Mayor No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITY®, at or prior to 1 :00 p.m., Central Time, on November 1, 2018. Any bid received after such time will not be accepted or shall be returned to the bidder. Attachment 2 Bids Received PARJTY Bid Form Page 1of2 Upcoming Calendar Overview Result Excel Bernardi Securities, Inc. -Chicago , IL's Bid .:~~~IRf•rJt:·· Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2, 160,000.00, we will pay you $2 ,231,907.90, plus accrued interest from the date of issue to the d t f d I' Th B d t b · t t t th following rate(s): aeo e 1verv. e on s are o ear 1n eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 4.0000 10/01/2020 115M 4.0000 10/01/2021 120M 4.0000 10/01/2022 125M 4.0000 10/01/2023 130M 4.0000 10/01/2024 130M 4.0000 10/01/2025 135M 4.0000 10/01/2026 140M 4.0000 10/01/2027 145M 4.0000 10/01/2028 150M 4.0000 10/01/2029 155M 4.0000 10/01/2030 165M 3.1500 10/01/2031 170M 3.2500 10/01/2032 175M 3.3500 10/01/2033 180M 3.4000 Total Interest Cost: $664, 191.44 Premium: $71 ,907.90 Net Interest Cost: $592,283.54 TIC: 3.191699 Total Insurance Premium: $0.00 Time Last Bid Received On :11/01/2018 12:58:59 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Bernardi Securities, Inc., Chicago , IL Contact: Gineen Destefano Title: Telephone:312-281-2019 Fax: 312-281-2039 Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11 /20/2018 PARITY Bid Form Page 2of2 Date: Date: © 1981-2002 i-Deal LI C, /\II rights reserved, Trademarks https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11/20/2018 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview Result Excel Robert w. Baird & Co., Inc. -Milwaukee , Wl's Bid .=~~~!lflf'rl.f · Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2, 160,000.00, we will pay you $2 , 199,946. 70, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e 1ver1. e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 10/01/2020 115M 10/01/2021 120M 10/01/2022 125M 10/01/2023 130M 10/01/2024 130M 10/01/2025 135M 10/01/2026 140M 10/01/2027 145M 10/01/2028 150M 10/01/2029 155M 10/01/2030 165M 10/01/2031 170M 10/01/2032 175M 10/01/2033 180M Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: 5.0000 5.0000 5.0000 5.0000 5.0000 5.0000 3.0000 3.0000 3.0000 3.0000 3.2500 3.2500 3.3750 3.5000 3.6250 $643,392 .50 $39,946.70 $603,445.80 3.287238 Time Last Bid Received On :11/01/2018 12:47:51 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Robert W. Baird & Co., Inc., Milwaukee , WI Contact: Geoff Kuczmarski Title: Telephone:414-765-7331 Fax: Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parity... 11/20/2018 PARITY Bid Form Page 2 of2 Date: Date: © 1981-2002 i-IJeal 11 C, /\II rights reserved, Trademarks https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity. .. 11/20/2018 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview Result Excel Commerce Bank -Kansas City , MO's Bid :-O~•Rf1r":·· • ~• ,.141. • F.· Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2, 160,000.00, we will pay you $2, 176,422.97, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e 1ver . e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 10/01/2020 115M 10/01/2021 120M 10/01/2022 125M 10/01/2023 130M 10/01/2024 130M 10/01/2025 135M 10/01/2026 140M 10/01/2027 145M 10/01/2028 150M 10/01/2029 155M 10/01/2030 165M 10/01/2031 170M 10/01/2032 175M 10/01/2033 180M Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: 4.0000 4.0000 4.0000 4.0000 4.0000 4.0000 4.0000 3.0000 3.0000 3.0000 3.2500 3.3750 3.5000 3.5000 3.6250 $632,513.75 $16,422.97 $616,090.78 3.368821 Time Last Bid Received On :11/01/201811 :33:34 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Commerce Bank, Kansas City , MO Contact: Matthew Koch Title: Fixed Income Trader Telephone:816-234-2450 Fax: Issuer Name: City of Salina Company Name: Accepted By: Accepted By: https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11/20/2018 PARITY Bid Form Page 2 of2 Date: Date: © 1981-2002 i-Deal 11 C, /\II rights reserved, -1 rademarks https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11/20/2018 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview Result Excel Hutchinson, Shockey, Erley & Co. -Chicago, IL's Bid :.O~IRf1r-.,:·· .~:i ~· -••• Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2 , 160,000.00, we will pay you $2,254,784.80, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e 1verv. e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 5.0000 10/01/2020 115M 5.0000 10/01/2021 120M 5.0000 10/01/2022 125M 5.0000 10/01/2023 130M 5.0000 10/01/2024 130M 5.0000 10/01/2025 135M 5.0000 10/01/2026 140M 3.0000 10/01/2027 145M 3.2500 10/01/2028 150M 3.3750 10/01/2029 155M 4.0000 10/01/2030 10/01/2031 335M 4.0000 10/01/2032 10/01/2033 355M 4.0000 Total Interest Cost: $733,661.39 Premium: $94,784.80 Net Interest Cost: $638,876.59 TIC: 3.416124 Total Insurance Premium: $0.00 Time Last Bid Received On :11/01/2018 12:56:04 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Hutchinson, Shockey, Erley & Co., Chicago , IL Contact: Jim VanMetre Title: Telephone: 312-443-1555 Fax: 312-443-7225 Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity ... 11 /20/2018 PARITY Bid Form Page 2of2 Date: Date: © 1981-2002 i-Deal LI C, /\II rights reserved, l rademarks https://www .newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 1112012018 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview Result Excel UBS Financial Services Inc. -New York, NY's Bid :-G~IRf1rv.F.. :·· .~:r ,. • •• Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A For the aggregate principal amount of $2 , 160,000.00, we will pay you $2 , 197,554.00, plus accrued interest from the date of issue to the d t f d r Th B d t b · t t t th following rate(s): aeo e 1ver1• e on s are o ear in eres a e Maturity Date Amount$ Coupon% Bond Insurance 10/01/2019 125M 4.0000 10/01/2020 115M 4.0000 10/01/2021 120M 4.0000 10/01/2022 125M 4.0000 10/01/2023 130M 4.0000 10/01/2024 130M 4.0000 10/01/2025 135M 4.0000 10/01/2026 140M 4.0000 10/01/2027 145M 3.0000 10/01/2028 150M 3.2500 10/01/2029 155M 3.5000 10/01/2030 165M 3.5000 10/01/2031 170M 4.0000 10/01/2032 175M 4.0000 10/01/2033 180M 4.0000 Total Interest Cost: $686,884.44 Premium: $37,554.00 Net Interest Cost: $649,330.44 TIC: 3.520014 Total Insurance Premium: $0.00 Time Last Bid Received On:11/01/2018 12:51 :18 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: UBS Financial Services Inc., New York , NY Contact: Jerry Orellana Title: Executive Director Telephone:212-373-6466 Fax: Issuer Name: City of Salina Accepted By: Company Name: Accepted By: https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11 12012018 PARITY Bid Form Page 2 of2 Date: Date: © 1981-2002 i-Deal I IC. All rights reserved, -1 rademarks https://www .newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity... 11/20/2018 Attachment 3 Bid Comparison PARITY Result Screen j2:03:27 p.m. COST Upcoming Calendar Overview Compare Summary Bid Results Salina $2, 160,000 General Obligation Internal Improvement Bonds, Series 2018-A The following bids were submitted using PARITY® and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D Bernardi Securities Inc. 3.191699 D Robert W. Baird & Co . Inc. 3.287238 D Commerce Bank 3.368821 D Hutchinson Shockev Erlev & Co. 3.416124 D UBS Financial Services Inc. 3.520014 Page 1of1 *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. © 1981-2002 i-Deal LLC. All rights reserved. l rademarks https://www .newissuehorne.i-deal.com/Parity /asp/rnain.asp?frarne=content&page=parity .. . 11/20/2018 Series 2018-A Project Asset Description Grand Prairie Addition. Phase II River Trail Second Addition Beechcraft Road Less land costs Net costs. excluding land Avera~e. Reasonably Expected Economic Life: 120% of Ori~inal Economic Life • Improvement Fund Deposit excludes Costs oflssuance. 2018-A Note Proceeds Allocated to Project Costs Other Money Allocated to Project Costs** Total Proiect Costs Original Economic Life 20 40 20 120% EXHIBIT D TO FEDERAL TAX CERTIFICATE Description of Property Comprising the Financed Property Estimated Elapsed Estimated Placed in Time Remaining Service from Economic Asset Date Issue Date Life Type November-I? -1.06 18.94 Other July-17 -1.39 38.61 Other Au~ust-18 -0.32 19.68 Other 26.30 years 31.56 years Total Estimated Project Costs $335.058.35 $753,728.34 s 1.062.581.65 $2, 151,368.34 $2, 151,368.34 2,121.368 30,000 2.151.368 Total Costs Financed With 2018-A Bonds* $305.058.35 $753.728.34 s 1.062.581.65 $2, 121,368.34 S2, I 2 I ,368.34 98.61% 1.39% 100.00% Improvement Fund Deposit* New Money S0.00 $23.109.74 S0.00 $23,109.74 Redemption of 2018-1 Notes $305.058.35 $730.618.60 S0.00 s 1,035,676.95 Redemption of 2017-1 Notes S0.00 S0.00 s 1.062,581.65 $1,062,581.65 •• Other Money includes unspent proceeds from the Salina Airport Authority's Temporary Notes, Series 2017-1 which will be used to redeem a portion of the Series 2017-1 Notes, and prepayments of special assessments which were previously allocated to pay project costs. Salina KS 2018-A G.O. Bonds D-1 Other Monies Used to Redeem Temporary Notes or Pay Project Costs Special 2017-1 A"wssment Um.pent Proceeds Prepayments S0.00 $30.000.00 S0.00 S0.00 S396,4 I 0.00 S0.00 Economic Life x Financed Cost 0 5.777,805 29,101 ,451 20,911 ,607 55,790,863 November 27, 2018 EXHIBITE FORM OF ANNUAL COMPLIANCE CHECKLIST $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 ISSUE DATE: NOVEMBER 27, 2018 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for working with other Issuer officials, departments and administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the extent necessary to carry out the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete this checklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions or need assistance in completing the checklist, please contact Bond Counsel at the address below. A completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Bond Compliance Officer Name: Bond Compliance Officer Signature: Date of Report: [ ] Annual Period Covered by Report: ~[ -----~ **If the answers to any of the following questions identify any compliance deficiencies, the Bond Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax Compliance Procedure.** Item Question Response 1 Were all of the Financed Improvements owned by the Issuer during the 0Yes Ownership entire Annual Period? 0No If answer above was "No," was advice of Bond Counsel obtained prior 0Yes to the transfer? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. E-1 Item Question Response 2 During the Annual Period, was any part of the Financed Improvements 0Yes Leases & leased at any time pursuant to a lease or similar agreement for more 0No Other Rights than 50 days? to Possession If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the lease or other arrangement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 3 During the Annual Period, has the management of all or any part of the 0Yes Management operations of the Financed Improvements (e.g., cafeteria, plant 0No or Service operations, etc.) been assumed by or transferred to another entity? Agreements If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the management agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 4 Was any other agreement entered into with an individual or entity that 0Yes Other Use grants special legal rights to the Financed Improvements? 0No If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 5 Have any Gross Proceeds of the Bonds been invested in a Guaranteed 0Yes Proceeds & Investment Contract? 0No Investments Has the Issuer entered into an Interest Rate Swap Agreement with 0Yes respect to the Bonds? 0No Has any sinking or reserve fund for the payment of the Bonds been 0Yes established (other than funds and accounts created in the Bond 0No Resolution)? Have any of the Bonds been redeemed or refunded in advance of their 0Yes scheduled maturities? 0No If answer to any of the above questions was "Yes," notify Bond Counsel with such information and place a copy of documentation in the Tax- Exempt Bond File. E-2 Item 6 Arbitrage & Rebate Bond Counsel: Question Have all rebate and yield reduction calculations mandated in the Federal Tax Certificate or Compliance Agreement been prepared for the current year? If No, contact Rebate Analyst and incorporate report description ofresolution in the Tax-Exempt Bond File. Gilmore & Bell, P.C. 2405 Grand Blvd., Suite 1100 Kansas City, MO 64108 Phone: (816) 221-1000 Fax: (816) 221-1018 Attn: Gina Riekhof Email: griekhoj@gilmorebell.com E-3 or include Response 0Yes 0No EXHIBITF FORM OF FINAL WRITTEN ALLOCATION $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 ISSUE DATE: NOVEMBER 27, 2018 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain categories of assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. The Tax Compliance Procedure requires the Bond Compliance Officer to complete a Final Written Allocation of the proceeds of the Bonds, in substantially the following form, when all proceeds (including Investment earnings on proceeds) are expended, but not later than 18 months after the Financed Improvements are placed in service. A completed copy of this Final Written Allocation should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. The undersigned is the Bond Compliance Officer of the City of Salina, Kansas (the "Issuer") and in that capacity is authorized to execute federal income tax returns required to be filed by the Issuer and to make appropriate elections and designations regarding federal income tax matters on behalf of the Issuer. This allocation of the proceeds of the bond issue referenced above (the "Bonds") is necessary for the Issuer to satisfy ongoing reporting and compliance requirements under federal income tax laws. Purpose. This document, together with the schedules and records referred to below, is intended to memorialize allocations of Bond proceeds to expenditures for purposes of § § 141 and 148 of the Internal Revenue Code (the "Code"). All allocations are or were previously made no later than 18 months following the date the expenditure was made by the Issuer or, if later, the date the "Financed Improvements" were "placed in service" (both as defined below), and no later than 60 days following the 5th anniversary of the issue date of the Bonds. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Federal Tax Certificate, relating to the Bonds, dated November 27, 2018 (the "Issue Date"). Background. The Bonds were issued pursuant to the Bond Resolution in order to provide funds needed to finance the Financed Improvements and refund certain temporary notes of the Issuer. Proceeds of the Bonds were deposited into the Improvement Fund established under the Bond Resolution. Sources Used to Fund Improvements and Allocation of Proceeds to Costs of Financed Improvements. A portion of the costs of the Improvements were paid from sale and investment proceeds of the Bonds (and proceeds of the refinanced temporary notes) as shown on Schedule 1 to this Final Written Allocation. Identification of Financed Improvements. The Financed Improvements are listed on Schedule 2 to this Final Written Allocation. F-1 Identification and Timing of Expenditures for Arbitrage Purposes. For purposes of complying with the arbitrage rules, the Issuer allocates the proceeds of the Bonds and the temporary notes to the various expenditures described in the invoices, requisitions or other substantiation attached as Schedule 2 to this Final Written Allocation. In each case, the cost requisitioned was either paid directly to a third party or reimbursed the Issuer for an amount it had previously paid or incurred. Amounts received from the sale of the Bonds and retained as underwriter's discount are allocated to that purpose and spent on the Issue Date. Amounts allocated to interest expense are treated as paid on the Interest Payment Dates for the Bonds. Placed In Service. The Financed Improvements were "placed in service" on the date(s) set out on Schedule 2 to this Final Written Allocation. For this purpose, the assets are considered to be "placed in service" as of the date on which, based on all the facts and circumstances: (a) the constructing and equipping of the asset has reached a degree of completion which would permit its operation at substantially its design level; and (b) the asset is, in fact, in operation at that level. This allocation has been prepared based on statutes and regulations existing as of this date. The Issuer reserves the right to amend this allocation to the extent permitted by future Treasury Regulations or similar authorities. CITY OF SALINA, KANSAS By: This Final Written Allocation has been prepared in the manner required by the Tax Compliance Procedure: [Issuer Counsel/Bond Counsel] Date of review: F-2 Bond Compliance Officer SCHEDULE 1 TO FINAL WRITTEN ALLOCATION ALLOCATION OF SOURCES AND USES S-1-1 SCHEDULE2 TO FINAL WRITTEN ALLOCATION IDENTIFICATION OF FINANCED ASSETS FROM BONDS Actual Date Estimated Actual Amount Placed in Useful Actual Financed Description Service Life Total Cost From Bonds [coov categories from Ex DJ r month/year] r l years $r l $r l *note: exclude land costs DETAILED LISTING OF EXPENDITURES* Item No. Date Paid Amount Paid Catef(ory Payee Description Reference *or attach General Ledger or Project Ledger S-2-1 SCHEDULE I DEBT SERVICE SCHEDULE AND PROOF OF YIELD $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 S-1 Nov 20, 2018 4:20 pm Prepared by Gilmore & Bell, P.C. Sources: Sources and Uses of Funds City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Dated Date Delivery Date 11 /27/2018 11 /27/2018 Bond Proceeds: Par Amount Original Issue Discount Premium Other Sources of Funds: Airport Authority Unspent 2017-1 Note Proceeds Uses: Improvement Fund Deposits: Refund City's 2018-1 Notes Refund Airport Authority's 2017-1 Notes (2018-A Proceeds) Refund Airport Authority's 2017-1 Notes (Unspent Proceeds) City Project Cost Reimbursement Delivery Date Expenses: Cost of Issuance Underwriter's Discount 2,090,000.00 (3,606.90) 91,730.25 2,178,123.35 396,410.00 2,574,533.35 1,035,676.95 1,062,581.65 396,410.00 23.109. 74 2,517, 778.34 38,467.51 18,287.50 56.755.01 2,574,533.35 (Finance 8.000) Page I This information is provided based on the factual information and assumptions provided to Gilmore & Bell P .C. by e party to or a representative of fl party to the proposed transaction. This infonuation is intended to provide facrual infonnation only and is provided in conjunction with our legal representation. It is nor intended as financial ad\•ice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities Exchan~e Act of 1934, as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell, P.C. (Finance 8.000) Page 2 BOND DEBT SERVICE City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Period Annual Bond Total Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 11127/2018 2,090,000 2,090,000 04/01/2019 27,158.58 27, 158.58 2,090,000 2,090,000 10/01/2019 115,000 4.000% 39,423.75 154,423.75 181.582.33 1,975,000 1,975,000 04/01/2020 37, 123 .75 37, 123.75 1,975,000 1,975.000 10/01/2020 110,000 4.000% 37,123.75 147,123.75 184.247.50 1,865,000 1,865.000 04/01/2021 34,923.75 34,923.75 1,865,000 1,865,000 10/01/202 1 115,000 4.000% 34,923 .75 149,923.75 184,847.50 1,750,000 1,750,000 04/01/2022 32,623.75 32,623.75 1,750,000 1,750.000 10/01/2022 120,000 4.000% 32,623.75 152,623.75 185,247.50 1,630,000 1,630,000 04/01/2023 30,223.75 30,223.75 1,630,000 1,630.000 10/01/2023 120,000 4.000% 30,223.75 150,223.75 180,447.50 1,510,000 1,510,000 04/01/2024 27,823.75 27,823.75 1,510,000 1,510.000 10/01/2024 125,000 4.000% 27,823.75 152,823.75 180,647.50 1,385,000 1,385,000 04/01/2025 25,323.75 25,323.75 1,385,000 1,385.000 10/01/2025 130,000 4.000% 25,323.75 155,323.75 180,647.50 1,255,000 1,255.000 04/01/2026 22,723.75 22,723.75 1,255,000 1,255,000 10/01/2026 135,000 4.000% 22,723.75 157,723.75 180,447.50 1,120,000 1,120,000 04/0112027 20,023.75 20,023.75 1,120,000 1,120,000 10/01/2027 145,000 4.000% 20,023.75 165,023.75 185.047.50 975,000 975.000 04/01/2028 17,123.75 17,123.75 975,000 975,000 10/01 /2028 150,000 4.000% 17,123.75 167,123.75 184,247.50 825,000 825,000 04/01 /2029 14,123.75 14,123.75 825,000 825,000 10/01 /2029 155,000 4.000% 14,123.75 169,123.75 183.247.50 670,000 670.000 04/01 /2030 11 ,023.75 11 ,023.75 670,000 670,000 10/01 /2030 160,000 3.150% 11.023.75 171 ,023.75 182,047.50 510,000 510,000 04/01 /2031 8,503.75 8,503.75 510,000 510,000 10/01 /2031 165,000 3.250% 8,503.75 173,503.75 182,007.50 345,000 345,000 04/01 /2032 5,822.50 5,822.50 345,000 345,000 10/01 /2032 170,000 3.350% 5,822.50 175,822.50 181 ,645.00 175,000 175,000 04/01 /2033 2,975.00 2,975.00 175,000 175.000 I 0/01/2033 175,000 3.400% 2,975.00 177,975.00 180,950.00 2,090,000 647,307.33 2,737,307.33 2,737,307.33 This information is provided based on the facruaJ information and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed trnnsaction. This infonnation is intended to provide facnial infonnation only and is provided in conjunction '\Vitll our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell. P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell. P.C. BOND PRJCING City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Maturity Bond Component Date Amount Rate Serial Coupon: 10/01 /2019 115.000 4.000% 10/01 /2020 110,000 4 000% 10/01 /2021 115.000 4000% 10/01 /2022 120.000 4.000% 10/01/2023 120.000 4.000% 10/01 /2024 125,000 4000% 10/01 /2025 130.000 4.000% 10/01 /2026 135,000 4.000% 10/01 /2027 145,000 4.000% 10/01 /2028 150.000 4.000% 10/01 /2029 155,000 4 000% 10/01 /2030 160,000 3.150% 10/01 /2031 165.000 3.250% 10/01 /2032 170,000 3.350% 10/01 /2033 175.000 3.400% 2.090.000 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued lnterest Net Proceeds Yield 2.000% 2.150% 2.250% 2.350% 2.450% 2.550% 2.650% 2.700% 2.750% 2.800% 2.850% 3.200% 3.300% 3.400% 3.450% Price 101.664 103.325 104.793 106.028 107.037 107.824 108.397 108.07 1 c 107.747 c 107.424 c 107.102 c 99.507 99.477 99.448 99.419 11/27/2018 11/27/2018 04/01 /2019 2,090.000.00 88,123.35 2,178,123.35 (18,287.50) 2,159,835.85 2.159,835.85 Yield to Matu1ity 2.844% 2.996% 3.118% 3.219% 104.216428% (0.875000%) 103.341428% Call Date 10/01/2025 10/01/2025 10/01/2025 10/01/2025 Call Price 100.000 100.000 100.000 100.000 (Finance 8.000) Page 3 Premium (-Discount) 1,913.60 3,657.50 5,511.95 7,233.60 8,444.40 9,780.00 10,916.10 10,895.85 11,233.15 11,136.00 11,008.10 (788.80) (862.95) (938.40) (1.016.75) 88.123.35 This inform .. 'ltion is provided based on the facrual infon11ation and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction. This infonnation is intended to provide fact11al infonnation only and is pro·vided in conjunction wjth our legal representation. H is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a ''municipal ndvisor"' as defined in the Securities Exchan~e Act of 1934. as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell. P.C. BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Dated Date De livery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Weighted Average Maturity (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Bond Component Serial Coupon Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost of Issuance Expense -Other Amounts Target Value Target Date Yield Par Value 2,090,000.00 2,090,000.00 TIC 2,090,000.00 88,123.35 (18.287.50) 2, 159,835.85 11/27/2018 3.194039% Price 104.216 11/27/2018 11/27/2018 I 0/01 /2033 3.000333% 3.194039% 3.252465% 3.449345% 3.645798% 8.495 8.422 7.179 2,090,000.00 2,178,123.35 647,307.33 577,471.48 17, 754,888.89 17, 754,888.89 2,737,307.33 185,247.50 184,399.45 8.750000 8.750000 103.341428 Average Coupon 3.646% All-In TIC 2,090,000.00 88,123.35 (18,287.50) (38,467.51) 2, 121 ,368.34 11 /27/2018 3.449345% Average Life 8.495 8.495 Arbitrage Yield 2,090,000.00 88,123.35 2,178,123.35 11/27/2018 3.000333% (Finance 8.000) Page 4 This information is provided based on the factual information and assumptions provided to Gilmore & Bell. P .C. by R party to or a represeuta.tive of a party to the proposed transaction. This infonnation is intended to provide facn1al infonnation only and is provided in conjunction with our legal representation. It is not iutmded as financial advice or a financial recommendation to any party. Gilmore & Bell. P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities Exchange Act of 1934. as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell, P.C. PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Present Value PY to 11/27/2018 Date Debt Service Factor @ 3.0003330063% 04/01 /2019 27, 158.58 0.989794 70 I 26,881.42 I 0/01 /2019 154.423.75 0.975165594 150.588.73 04/01 /2020 37,123.75 0.960752703 35,666.74 10/01/2020 147, 123.75 0.946552835 139,260.40 04/01 /2021 34,923.75 0.932562840 32,568.59 10/01 /2021 149,923.75 0.918779616 137,746.89 04/01/2022 32,623.75 0.905200107 29,531 .02 I 0/01/2022 152,623.75 0.891821302 136,113.11 04/01 /2023 30,223.75 0.878640236 26,555.80 10/0112023 150,223.75 0.865653985 130,041.79 04/0112024 27,823.75 0.852859670 23,729.75 10/01 /2024 152,823.75 0.840254454 128,410.84 04/01 /2025 25,323.75 0.827835542 20,963.90 10/01/2025 740,323.75 0.815600182 603,808.18 04/01 /2026 11,023.75 0.803545659 8,858.09 10/01 /2026 11,023.75 0.791669301 8,727.16 04/01/2027 11,023.75 0.779968475 8,598.18 10101/2027 11,023.75 0.768440587 8,471.10 04/01/2028 11,023.75 0.757083080 8,345.89 I 0/01/2028 11.023.75 0.745893437 8,222.54 04/01/2029 11,023.75 0.734869175 8,101.01 10/01/2029 11 ,023.75 0. 724007852 7,981.28 04/01/2030 11,023.75 0.713307059 7,863.32 I 0/01/2030 171.023.75 0. 702764422 120.189.41 04/01/2031 8,503.75 0.692377605 5.887.81 I 0/01/2031 173,503.75 0.682144305 118,354.59 04/01/2032 5.822.50 0.672062252 3,913.08 I 0/01/2032 175,822.50 0.662129211 116,4 17.21 04/01/2033 2,975.00 0.652342981 1,940.72 10/01/2033 177,975.00 0.642701390 114,384.78 2,677,507.33 2, 178, 123.35 Proceeds Summary Delivery date Par Value Premium (Discount) Target for yield calculation 11/27/2018 2,090,000.00 88, 123.35 2.178,123.35 (Finance 8.000) Page 5 Tbis information is provided based on tbe factual information aud assumptions provided to Gilmore & Bell, P .C. by a party to or a represenrntive of a party to the proposed tnmsaction. This infonnation is intended to provide facnial infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a •·municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell, P.C. (Finance 8.000) Page 6 Bond Component SERJAL SERIAL SERJAL SERJAL Bond Maturity Component Date SERJAL 10/01 /2026 SERJAL 10/01 /2027 SERJAL I 0/01 /2028 SERJAL 10/01 /2029 PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Maturity Date I 0/01/2026 IO/OI/2027 10/01 /2028 10/01 /2029 Rate 4.000% 4.000% 4.000% 4.000% Assumed Call/Computation Dates for Premium Bonds Call Rate Yield Date 4.000% 2.700% I 0/01/2025 4.000% 2.750% 10/01/2025 4.000% 2.800% 10/01/2025 4.000% 2.850% 10/01/2025 Call Price 100.000 100.000 100.000 100.000 Yield To Call/Maturity 2.7009778% 2.7509572% 2.8009559% 2.8509733% Rejected Call/Computation Dates for Premium Bonds Call Call Yield To Increase Yield Date Price Call/Maturity to Yield 2.700% 2.8451921% 0.1442143% 2.750% 2.9967817% 0.2458245% 2.800% 3.1187570% 0.3178011% 2.850% 3.2193149% 0.3683415% This information is provided based on the facruaJ infonuation and Assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of e party to the proposed 1ransacrion. Tb.is infonnation is intended to provide factl1al infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financiftl recommendation to any party. Gilmore & Bell. P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell. P.C. FORM 8038 STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Dated Date Delivery Date 11/27/2018 11/27/2018 Bond Component Date Principal Coupon Price Serial Coupon: 10/01/2019 115,000.00 4.000% 101.664 10/01/2020 110,000.00 4.000% 103.325 I 0/01/2021 115,000.00 4.000% 104.793 10/01/2022 120,000.00 4.000% 106.028 10/01/2023 120.000.00 4.000% 107.037 10/01/2024 125,000.00 4.000% 107.824 10/01/2025 130.000.00 4.000% 108.397 10/01/2026 135,000.00 4.000% 108.071 I 0/01/2027 145.000.00 4.000% 107.747 10/01/2028 150,000.00 4.000% 107.424 10/01/2029 155.000.00 4.000% I 07.102 I 0/0112030 160,000.00 3.150% 99.507 10/01/2031 165.000.00 3.250% 99.477 10/01/2032 170,000.00 3.350% 99.448 10/01 /2033 175.000.00 3.400% 99.419 2,090,000.00 Stated Maturity Interest Issue Redemption Date Rate Price at Maturity Final Maturity I 0/01 /2033 3.400% 173,983.25 175,000.00 Entire Issue 2,178.123.35 2,090,000.00 Proceeds used for accrued interest Proceeds used for bond issuance costs (including underv.'l"iters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to currently refund prior issues Proceeds used to advance refund prior issues Remaining weighted average maturity of the bonds to be currently refunded Remaining weighted average maturity of the bonds to be advance refunded Issue Price 116,913.60 113,657.50 120.511.95 127,233 .60 128,444.40 134,780.00 140,916.10 145,895.85 156,233 .15 161 ,136.00 166,008.10 159,211.20 164.137.05 169,061.60 173.983.25 2, 178, 123.35 Weighted Average Maturity 8.4223 (Finance 8.000) Page 7 Redemption at Maturity 115 ,000.00 110,000.00 115 ,000.00 120,000.00 120,000.00 125,000.00 130,000.00 135,000.00 145,000.00 150,000.00 155,000.00 160,000.00 165,000.00 170,000.00 175,000.00 2,090,000.00 Yield 3.0003% 0.00 56,755.01 0.00 0.00 2,098,258.60 0.00 0.0597 0.0000 This information is provided based on the facruaJ information and assumptions provided to Gilmore & Bell, P.C. by a party to or a rep1·esenrn.tive of a pany 10 the proposed transaction_ This information is intended to provide facnial infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell. P.C. is not n financial advisor or a "municipal advisor" as defined in the Securities Exchan~e Act of 1934. as amended. Nov 20, 2018 4:15 pm Prepared by Gilmore & Bell. P.C. FORM 8038 STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2018-A Bond Component Date Refunded Bonds Principal Coupon Price Salina Airport Authority General Obligation Temporary Notes, Series 2017-1: SERIAL 01 /01 /2019 1,440,000.00 1.430% 100.000 General Obligation Temporary Notes, Series 2018-1: SERIAL 12/01 /2018 1.028,795.53 2,468. 795.53 Salina Airport Authority General Obligation Temporary Notes, Series 2017-1 General Obligation Temporary Notes. Series 2018-1 All Refunded Issues 1.990% 100.000 Last Call Date 11/30/2018 11/30/2018 (Finance 8.000) Page 8 Issue Price 1,440,000.00 1,028, 795.53 2,468.795.53 Remaining Weighted Issue Average Date Maturity 12/28/2017 0.0944 07/30/2018 0.0111 0.0597 This information is provided based on the facnutl infomut.tion and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed trn.nsaction. This infonnation is intended to provide facn1al infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendalion to any party. Gilmore & Bell, P.C. is not R financial advisor or a "municipal advisor" as defined in the Securities Exchan~e Act of 1934. as amended. CERTIFICATE OF MUNICIPAL ADVISOR $2,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2018-A DATED NOVEMBER 27, 2018 George K. Baum & Co., Kansas City, Missouri, is employed as municipal advisor to the City of Salina, Kansas (the "Issuer") with respect to the above captioned bonds (the "Bonds"). 1. Duties. The Municipal Advisor rendered certain professional services to the Issuer, including advising the Issuer with respect to the sale of the Bonds, and assisting the Issuer with the preparation of the Preliminary Official Statement dated October 24, 2018 and the Official Statement dated November 8, 2018, (both documents referred to collectively herein as the "Official Statement"). 2. Official Statement. The Municipal Advisor has read the Official Statement, but has not, however, independently verified the factual and financial information contained in the Official Statement, including the appendices attached thereto, nor have we participated in the drafting Appendices Band Cto the Official Statement. 3. Certification. Based on the foregoing, the Municipal Advisor certifies, to the best of our knowledge, information and belief, the information contained in the Official Statement (except for Appendices B and C attached to the Official Statement) are, as of its date and as of the date hereof, true and correct in all material respects, and the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact where necessary to make a statement not misleading in light of the circumstances under which it was made. DATED: November 27, 2018. GEORGE K. BAUM & CO. KANSAS CITY, MISSOURI By:~ J~ Title:4t:·.or v·.~ Governing Body City of Salina, Kansas Bernardi Securities, Inc. Chicago, Illinois & GILM01'_EBELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 / (816) 221-1018 FAX / gilmorebell.com November 27, 2018 Re: $2,090,000 General Obligation Internal Improvement Bonds, Series 2018-A, of the City of Salina, Kansas, Dated November 27, 2018 We have acted as Bond Counsel in connection with the issuance by the City of Salina, Kansas (the "Issuer"), of the above-captioned bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer prescribing the details of the Bonds. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3. The interest on the Bonds (including any original issue discount properly allocable to an owner of a Bond) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at Jaw or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, STATE OF KANSAS OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT ATIORNEY GENERAL The Honorable Jake LaTurner State Treasurer November 27, 2018 Landon State Office Building, Room 201 N Topeka, KS 66612 Dear Mr. LaTurner: MEMORIAL HALL 120 SW 1 OTH AvE .. 2ND FLOOR TOPEKA. KS 66612-1597 (785) 296-2215 • FAX (785) 296-6296 WWW AG KS.GOV Pursuant to K.S.A. 10-108, basic or supplemental transcript material is hereby approved and you may register the following: Municipality: City of Salina, Kansas Description: General Obligation Internal Improvement Bond Series: 2018-A Dated: November 27, 2018 Aggregate Amount: $2,090,000.00 Date of First Payment: April 1, 2019 Fiscal Agent: Kansas State Treasurer NLU:sb cc: Shandi Wicks, Clerk Gilmore & Bell-Kansas City Numbered: Registered Sincerely, OFFICE OF THE ATIORNEY GENERAL DEREK SCHMIDT ~~.~;<a-- Nancy L. Ulrich Special Assistant Attorney General TO : SEE DISTRIBUTION LIST FROM: DAVID ARTE BERRY ROGER EDGAR George K. Baum & Company ll\\t:.:~·r Mt.7''1 BA:>.:Kt.K~ Sll\ll=. 19:i!rl November 20, 2018 MEMORANDUM RE: BOND ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER: City of Salina, Kansas AMOUNT, NAME AND DATE OF ISSUE: TIME AND DATE OF CLOSING: SETILEMENT NUMBERS: METHOD OF FUNDS TRANSFER: $2,090,000 City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2018-A Dated November 27, 2018 10:00 a.m. Tuesday, November 27, 2018 Via telephone Par Amount of Bonds Add: Bid Premium Less: Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds $2,090,000.00 69,835.85 (43,200.00) $2, 116,635.85 4801MainStreet • Suite500 • KansasCity,Missouri64112 • 816.474.1100 TRANSFER INSTRUCTIONS: (Bernardi Securities -Wire #1) (Bernardi Securities -Wire #2) (Salina Airport Authority) DISPOSITION OF BOND PROCEEDS: (City of Salina) (State Treasurer) DELIVERY OF TRANSCRIPT AND LEGAL OPINION : BOND DELIVERY INSTRUCTIONS: PAYMENT OF COSTS OF ISSUANCE: On Tuesday, November 27, 2018 Bernardi Securities will wire transfer an amount of $18,377.25 to Sunflower Bank, ABA #1011 -0062-1, AC #10218 7275 for credit to the City of Salina, Attn: Kayleen Chaput. On Tuesday, November 27, 2018, Bernardi Securities will wire transfer an amount of $2,098,258.60 to U.S. Bank N.A., ABA #1010-0018-7, for credit to State Treasurer Operating Account #145592399581, for further credit to the City of Salina, Attn: Shauna Wake. On Monday, November 26, 2018, the Salina Airport Authority will wire transfer an amount of $396,410.00 to U.S. Bank N.A., ABA #1010-0018-7, for credit to State Treasurer Operating Account #145592399581, for further credit to the City of Salina, Attn: Shauna Wake. The City shall deposit the $18,377.25 received from Bernardi Securities along with the $43,200.00 Good Faith Deposit previously received from Bernardi ($61,577.25 total) into Improvement Fund for General Obligation Internal Improvement Bonds, Series 2018-A. The State Treasurer shall apply the $396,410.00 received from the Salina Airport Authority to redeem the Airport's Series 2017-1 Notes on November 30, 2018. The State Treasurer shall apply the $2,098,258.60 received from Bernardi Securities as follows: Redeem City's Series 2018-1 Notes on 12/1/18 Redeem of Airport's Series 2017-1 Notes on 11/30/18 $1,035,676.95* 1,062,581.65 Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal opinion to the City, Bernardi Securities and George K. Baum & Company. Original signed legal opinions and transcripts will be mailed when completed. Bonds will be delivered to the offices of the Depository Trust Company at least one day prior to closing. All reimbursable costs associated with the issuance of the Bonds will be paid after closing by the City upon presentation of the proper invoices. *Additional funds in the amount of $5,004,455.96 should be received by the State Treasurer from Oppenheimer & Company to provide sufficient funds to pay the City's Series 2018-1 Notes at maturity on December 1, 2018.For details related to the transfer of funds from Oppenheimer & Company, please reference the Closing Memorandum for the City's $13,500,000 General Obligation Temporary Notes, Series 2018-2. Engelman, Heather (G&B} From: bondreg@treasurer.ks.gov Sent: To: Thursday, November 01, 2018 3:17 PM Engelman, Heather (G&B) Subject: Bondreg: Updated Bond Registration November 1, 2018, 15:17:11 This bond issue has been updated in the KST Bond Registration System. Below is the updated information: Registration #: 0322-085-112718-483 Municipality: Salina Bond Counsel: Gilmore Bell: Heather Engelman Paying Agent: State Purpose & Series: General Obligation Bonds, Series 2018-A Book Entry: Yes Principal: $2,090,000.00 Closing Date: November 27, 2018 The issue was updated by Jill Schell. 1