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Audit - 1987 CITY OF SALINA Salina, Kansas FINANCIAL STATEMENTS AND AUDITORS' REPORTS December 31, 1987 KENNEDY AND COE Certified Public Accountants Salina, Kansas Exhibit A Exhibit B Schedule 1 Schedule 2 Schedule 3 CITY OF SALINA Salina, Kansas CONTENTS AUDITORS'REPORTS REPORT ON FINANCIAL STATEMENTS REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS A PART OF AN EXAMINATION OF THE BASIC FINANCIAL STATEMENTS REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS THAT MAY HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE REPORT ON INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SCHEDULE OF FINDINGS FINANCIAL STATEMENTS SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUM- BRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS Supplemental Information Composition of Ending Cash Balances Comparison of Gross Cash Balances with Depository Security Schedule of Federal Financial Assistance Page 1 2-3 4 5 6-8 9-10 11 12-13 14-31 32-40 41 42 43 Contents Exhibit A Exhibit B Exhibit C Exhibit D CITY OF SALINA Salina, Kansas CONTENTS (CONTD.) SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT AUDITORS'REPORT BALANCE SHEETS STATEMENTS OF INCOME STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENTS OF CHANGES IN FINANCIAL POSITION NOTES TO FINANCIAL STATEMENTS Page 44 45 46 47 48 49-52 Contents HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO AUDITORS' REPORT ON FINANCIAL STATEMENTS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the year ended December 31, 1987, included herein on included all funds and account groups except (1) Saline County-City Building Authority, Salina-Saline County Board of Health, and Salina Public Library, which we examine and report on separately. (2) Firemen's Relief Association, Salina Recreation Commission, Arts Commission, Salina Housing Authority, and the Salina Authority, which are examined by other auditors who issue separate reports. Our examination was made in accordance with generally accepted auditing standards and the Minimum Standard Audit Program approved by the State Municipal Accounting Board and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. City of Salina, Kansas, for the pages 12 to 40. Our examination Salina Airport their As discussed in Note 1, the City maintains its accounting records and prepares its financial statements on the cash basis, modified by recording encuITlbrances. This basis of accounting and presentation differs in some respects from generally accepted accounting principles. Accordingly, the accompanying financial statements are not intended to present financial position and results of operations in conformity with generally accepted accounting principles. In our opinion, the accompanying financial statements present fairly the cash and unencumbered cash balances of the City of Salina, Kansas, at December 31, 1987, and its receipts and expenditures for the year then ended in accordance with the method of accounting described in the preceding paragraph, which method ha.s been applied in a manner consistent with that of the preceding year. Our examination was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental information presented on pages 41 to 43 is presented for purposes of additional analysis and is not a required part of the financial statements. This information has been subjected to the auditing procedures applied in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, Salina, Kansas June 14, 1988 I{~~c~ ~~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. -1- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO AUDITORS' REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS PART OF AN EXAMINATION OF THE BASIC FINANCIAL STATEMENTS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1987, and have included our report thereon on page 1. As part of our examination, we made a study and evaluation of the system of internal accounting control of the City of Salina, Kansas, to the extent we considered necessary to evaluate the system as required by generally accepted auditing stand- ards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the standards for financial and compliance audits contained in the U.S. General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities, and Functions. For the purpose of this report, we have classified the significant internal accounting controls in the following categories: 1. 2. 3. 4. Receipts Purchases/disbursements Cash and investment balances Financial reporting Our study included all of the control categories listed above. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the City's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole or on any of the categories of controls identified above. The management of the City of Salina, Kansas, is responsible for establishing and maintaining a system of internal accounting control. In fulfilling that responsi- bility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with the method of accounting described in Note 1 to the financial statements. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless Occur and not be detected. Also, projection of any evaulation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -2- Our study and evaluation made for the limited purpose described in the first para- graph would not necessarily disclose all material weaknesses in the system. Accord- ingly, we do not express an opinion on the system of internal accounting control of the City of Salina, Kansas, taken as a whole or on any of the categories of controls identified in the first paragraph. However, our study and evaluation disclosed no condition that we believe to be a material weakness. This report is intended solely for the use of management of the City of Salina, Kansas, and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which, upon acceptance by the City of Salina, Kansas, is a matter of public record. Respectfully submitted, Salina, Kansas June 14, 1988 /{~ ~ ~ -3- HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS THAT MAY HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1987, and have included our report thereon on page 1. Our examination was made in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management of the City of Salina, Kansas, is responsible for the City's com- pliance with laws and regulations. In connection with our examination referred to above, we selected and tested transactions and records to determine the City's compliance with laws and regulations noncompliance with which could have a material effect on the financial statements of the City. The results of our tests indicate that for the transactions tested the City of Salina, Kansas, complied with those laws and regulations referred to above, except as described in Note 8 to the financial statements. Those instances of noncompliance were considered by us in evaluating whether the financial state- ments are presented fairly in conformity with the method of accounting described in Note 1 to the financial statements. With respect to the transactions not tested, nothing came to our attention to indicate that the City of Salina, Kansas, had not complied with laws and regulations other than those laws and regulations for which we noted violations in our testing referred to above. Respectfully submitted, Salina, Kansas June 14, 1988 /(~ ~ ~ MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -4- HOME OFFICE: P.o. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1987, and have included our report thereon on page 1. Our examination of such financial statements was made in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Municipal Accounting Board, and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Our examination was made for the purpose of forming an opinion on the financial statements taken as a whole. The included Schedule of Federal Financial Assistance, Schedule 3, is presented for purposes of additional analysis and is not a required part of the financial statements of the City of Salina, Kansas. The information in that schedule has been subjected to the auditing procedures applied in the examin- ation of the City's financial statements and, in our opinion, is fairly stated in accordance with the City's method of accounting described in Note 1 to the financial statements, in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, Salina, Kansas June 14, 1988 ~~ ~ ('~ MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -5- KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 AUDITORS' REPORT ON INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1987, and have included our report thereon on page 1. As part of our examination, we made a study and evaluation of the internal con- trol systems, including applicable internal administrative controls, used in admin- istering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, Audits of State and Local Governments. For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Accounting Controls 1. Receipts 2. Purchases/disbursements 3. Cash and investment balances 4. Financial reporting Administrative Controls 1. General requirements Political activity Civil rights Cash management Relocation assistance and Federal financial reports real property acquisition 2. Specific requirements Types of services Matching level of effort Reporting Special requirements MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -6- The management of the City of Salina, Kansas, is responsible for establishing and maintaining internal control systems used in administering federal financial assis- tance programs. In fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in adrŒinistering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, main- tained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and admini- strative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, pro- jection of any evaluation of the systems to future periods is subj€~ct to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories listed above. During the year ended December 31, 1987, the City of Salina, Kansas, expended substantially all of its total federal financial assistance under major federal financial assis- tance programs. With respect to internal control systems used in administering major federal financial assistance programs, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. With respect to the internal control systems used solely in administering the non- major federal financial assistance programs of the City of Salina, Kansas, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions through the accounting system. Our study and evaluation of the internal control systems used solely in administering the nonmajor federal financial assistance programs of the City of Salina, Kansas, did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance programs of the City of Salina, Kansas. Accordingly, we do not express an opinion on the internal control systems used in administering the federal finan- cial assistance programs of the City of Salina, Kansas. Further, w'e do not express an opinion on the internal control systems used in administering the major federal financial assistance programs of the City of Salina, Kansas. Also, our examination, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems used solely in administering nonmajor federal financial assistance programs. -7- However, our study and evaluation and our examination disclosed no condition that we believe to be a material weakness in relation to a federal financial assistance program of the City of Salina, Kansas. This report is intended solely for the use of management of the City of Salina, Kansas, the cognizant federal agency, and other applicable federal audit agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the City of Salina, Kansas, is a matter of public record. Respectfully submitted, Salina, Kansas June 14, 1988 ¡f~ ~ ~ -8- HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1987, and have included our report thereon on page 1. Our examination was made in accordance with generally accepted audi~ting standards; the Minimum Standard Audit Program approved by the State Municipal Accounting Board; the standards for financial and compliance audits contained in the Stand- ards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office; the Single Audit Act of 1984; and the provisions of OMB Circular A-128, Audits of State and Local Governments and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management of the City of Salina, Kansas, is responsible for the City's com- pliance with laws and regulations. In connection with the examination referred to above, we selected and tested transactions and records from each major federal financial assistance program and a nonmajor federal financial assistance program. The purpose of our testing of transactions and records from those federal financial assistance programs was to obtain reasonable assurance that the City of Salina, Kansas, had, in all material respects, administered major programs, and executed the tested nonmajor program transaction, in compliance with laws and regulations, including those pertaining to financial reports and claims for advances and reim- bursements, noncompliance with which we believe could have a material effect on the allowability of program expenditures. Our testing of transactions and records selected from major federal financial assistance programs disclosed instances of noncompliance with those laws and regulations. All instances of noncompliance that we found and the programs to which they relate are identified in the accompanying schedule of findings. In our opinion, subject to the effect, if any, of the ultimate resolution of those instances of noncompliance referred to in the preceding paragraph, for the year ended December 31, 1987, the City of Salina, Kansas, administered each of its major federal financial assistance programs in compliance, in all material respects, with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements, noncompliance with which we believe could have a material effect on the allowability of program expendi- t ures. MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -9- The results of our testing of the transaction and records selected from nonmajor federal financial assistance programs indicate that for the transaction and records tested the City of Salina, Kansas, complied with the laws and regulations referred to in the second paragraph of our report. Our testing was more limited than would be necessary to express an opinion on whether the City of Salina, Kansas, administered those programs in compliance in all material respects with those laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures; however, with respect to the trans- actions and records that were not tested by us, nothing came to our attention to indicate that the City of Salina, Kansas, had not complied with laws and regulations other than those laws and regulations for which we noted violations in our testing referred to above. Respectfully submitted, Salina, Kansas June 14, 1988 I(~ ~ (í~- -10- AUDITORS' FINDINGS CITY OF SALINA Salina, Kansas SCHEDULE OF AUDITORS' FINDINGS Year Ended December 31, 1987 Community Development Block Grant/Small Cities Program Grant Number Finding/Noncompliance 86-BF-18l Compliance Requirement - The government is to submit Quarterly Progress and Financial Reports for this program during the period of performance. Auditors' findings indicate that no Quarterly Progress and Financial Report was submitted for the period ended December 31, 1986. Findings also indicate that the quarterly report for the period ended June 30, 1987, was due no later than July 10, 1987, but was not submitted until July 16, 1987. 85-BF-280 Compliance Requirement - The government is to submit Quarterly Progress and Financial Reports for this program during the period of performance. Auditors' findings indicate that no Quarterly Progress and Financial Report was submitted for the periods ended September 30, 1986 and December 31, 1986. Findings also indicate that the quarterly reports for the periods ended June 30,1987, September 30,1987, and December 31,1987, were due no later than the 10th of the month following the period ended, but were not submitted until July 16, 1987, October 13, 1987, and January 21, 1988, respectively. Compliance Requirement - All activities assisted by this grant shall be completed on December 31, 1987 and any amounts of cash in excess of a $5,000 limit shall be expended within 3 days of receipt of funds in the depository account. Auditors' findings indicate that $395,000 of the $400,000 grant funds received were loaned by the City to a private company as specified in the grant agreement within the 3-day require- ment. It appears this loan agreement between the Ci ty and the private company revises the period of performance to be completed on June 30, 1989. The $395,000 loan of grant funds was not yet expended by the private company as of the end of audit fieldwork, June 14, 1988, which does not appear to comply with the 3-day expenditure rule. -See Auditors' Report on Compliance with Laws and Regulations Applicable to Federal Financial Assistance Programs- -11- CITY OF SALINA Salina, Kansas SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES Year Ended December 31, 1987 Fund Unencumbered Cash Balance January 1, 1987 General Fund $1,768,266.19 Special Revenue Funds Emergency Preparedness Street Machinery Special Gasoline Tax Tourism and Convention Promotion Employee Benefit Fund Utility Fund Special Parks and Recreation Special Alcohol Programs Special Liability Fund Fair Housing Assistance Program Business Improvement District Equipment Reserve 807.30 106,586.97 69,771.75 64,644.61 375,917.27 180,092.04 131,608.33 (6,000.09) 7,412.04 Debt Service Fund Bond and Interest 326,439.99 Capital Projects Fund Construction Fund 1,236,321.94 Enterprise Funds Golf Course Sanitation Parking Meters Bicentennial Center Solid Waste Disposal Water and Sewerage Bicentennial Center Data Processing 5,876.48 299,146.35 1,140.54 116,175.87 315,716.86 184,418.58 13,409.00 38,238.55 Events Fund (Note 5) Water and Sewerage Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and Combined Water and Sewage System Revenue Bonds, Series of 1987 357,744.63 Receipts $ 9,124,976.15 25,138.44 782,789.53 146,836.76 1,507,219.88 590,447.77 45,769.64 45,769.63 204,168.65 20,236.09 17,001.10 208,000.00 1,942,213.08 7,131,869.72 362,035.22 713,986.98 40,000.00 585,978.42 345,847.57 7,724,298.73 726,176.04 143,411. 84 387,571.14 Exhibit A Unencumbered Cash Balance Encumbrances Cash Balance Expenditures December 31, 1987 December 31, 1987 December 31, 1987 $ 8,619,603.79 $2,273,638.55 $ 276,061. 41 $ 2,549,699.96 807.30 68,345.10 63,380.31 63,380.31 780,111. 68 72,449.60 3,569.73 76,019.33 210,000.00 1,481.37 1,481.37 1,605,911. 76 277,225.39 277,225.39 581,804.39 188,735.42 188,735.42 45,769.64 45,000.00 769.63 769.63 283,401. 22 52,375.76 52,375.76 12,116.61 2,119.39 2,119.39 2,328.24 22,084.90 22,084.90 77,469.71 130,530.29 130,530.29 1,964,408.81 304,244.26 304,244.26 7,489,930.89 878,260.77 2,010.86 880,271.63 312,895.51 55,016.19 55,016.19 686,974.40 326,158.93 324.50 326,483.43 40,457.65 682.89 682.89 542,108.56 160,045.73 952.19 160,997.92 247,824.97 413,739.46 413,739.46 6,740,533.22 1,168,184.09 1,886,531. 75 3, 054, 715. 84 706,560.85 33,024.19 33,024.19 133,053.95 48,596.44 1,655.00 50,251. 44 380,177.50 365,138.27 365,138.27 -12- CITY OF SALINA Salina, Kansas SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES Year Ended December 31, 1987 Fund Unencumbered Cash Balance January 1, 1987 Water and Sewerage Reserve Accounts for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 Revenue Bonds, Series of 1987 Depreciation and Emergency Replacement Extension and Bond Retirement $ 615,314.60 628,352.72 760,632.03 Intragovernmental Funds Central Garage Risk Management (6,246.79) Trust and Agency Funds Citizenship Trust HUD Community Development Cemetery Endowment Mausoleum Endowment Fire Insurance Proceeds 13,685.81 19,347.44 89,811.74 17,624.17 Totals (Memorandum Only) $7.732.256.92 The accompanying notes are an integral part of this financial statement. Receipts $ 43,224.06 265,000.00 79,432.99 21,147.67 468,737.82 632,455.00 998.00 893,975.77 6,955.02 2,800.00 $35.236.468.71 Expenditures $ 357,785.71 59,021.50 490,705.72 544,765.65 865,373.07 ~33,895,247.40 Unencumbered Cash Balance December 31, 1987 $ 658,538.66 265,000.00 350,000.00 722,758.20 (28,214.69) 87,689.35 14,683.81 47,950.14 96,766.76 17,624.17 2,800.00 $9,073.478.23 Encumbrances December 31, 1987 $ 84.90 23.00 $2.171.213.34 Exhibit A (Contd.) Cash Balance December 31, 1987 $ 658,538.66 265,000.00 350,000.00 722,758.20 (28,129.79) 87,712.35 14,683.81 47,950.14 96,766.76 17,624.17 2,800.00 $11.244.691.57 -13- FINANCIAL STATEMENTS CITY OF SALINA Salina, Kansas STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 GENERAL FUND Receipts Current tangible tax Vehicle tax Delinquent taxes Local sales tax Bingo gross receipts tax City liquor tax Local ad valorem tax reduction State shared taxes Auto dealers tax stamps Highway maintenance Licenses, fees and permits Municipal court fines Franchise taxes Rents and concessions Interest from investments Engineering fees Services and sales Ambulance fees Fire protection - Outside city Reimbursement of expenditures Transfers from other funds Total Receipts Expenditures Department City Commission City Manager City Clerk City Attorney Municipal Court City Building Engineering Fire Inspection Park Police Street Human Relations Emergency Medical Services Traffic Swimming Pools Administration and Planning Contingencies Actual $1,629,184.47 427,461. 08 35,467.95 3,259,355.46 10,996.10 45,769.63 266,025.59 200,171.16 13,694.56 limits 196,346.70 333,308.88 1,115,406.79 6,538.00 433,699.56 50,000.00 230,275.94 148,422.23 129,214.22 397,868.19 195,769.64 9,124,976.15 413,786.51 84,611. 89 211,892.23 72,891. 80 70,404.00 102,421. 02 134,199.80 1,655,955.74 99,891.24 455,613.77 1,788,010.19 601 , 671. 54 78,012.33 405,266.57 85,393.76 48,350.81 112,446.53 233,586.55 Budget $1,643,730.00 357,800.00 22,000.00 3,250,000.00 16,000.00 46,000.00 266,800.00 203,400.00 14,000.00 3,100.00 206,550.00 365,000.00 1,240,000.00 8,100.00 670,000.00 50,000.00 200,900.00 154,000.00 156,000.00 371,800.00 196,000. OC~ 9,441,180.00~ 388,590.00 74,610.00 202,300.00 56,460.00 60,450.00 108,000.00 144,110.00 1,715,780.00 101,100.00 437,940.00 1,782,620.00 592,640.00 74,470.00 436,400.00 84,290.00 43,850.00 123,200.00 165,360.00 Exhibit B (Over) Under Budget $ 14,545.53 (69,661. 08) 03,467.95) (9,355.46) 5,003.90 230.37 774.41 3,228.84 305.44 3,100.00 10,203.30 31,691.12 124,593.21 1,562.00 236,300.44 (29,375.94) 5,577.77 26,785.78 (26,068.19) 230.36 316,203.85 (25,196.51) 00,001.89) (9,592.23) 06,431.80) (9,954.00) 5,578.98 9,910.20 59,824.26 1,208.76 07,673.77) (5,390.19) (9,031.54) (3,542.33) 31,133.43 0,103.76) (4,500.81) 10,753.47 (68,226.55) -14- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 GENERAL FUND (CONTD.) Expenditures (Contd.) Department (Contd.) Arts Commission Cemetery General Improvement Museum Floodworks Neighborhood Centers Capital Improvements Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 EMERGENCY PREPAREDNESS (NOTE 2) Receipts Expenditures Contractual serV1ces Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 STREET MACHINERY (NOTE 2) Receipts Interest from investments Transfers from General Fund Total Receipts Expenditures Capital outlay Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual $ 118,532.28 60,592.75 55,517.03 154,448.10 59,520.25 79,203.52 1,437,383.58 8,619,603.79 505,372.36 1,768,266.19 ~2.273.638.55 $ 807.30 (807.30) 807.30 $ $ 138.44 25,000.00 25,138.44 68,345. 10 (43,206.66) 106,586.97 $ 63,380.31 Budget $ 11 7 , 860.00 ($ 57,720.00 58,900.00 153,200.00 60,980.00 79,450.00 3,320,000.00 10,440,280.00 (Over) Under Budget 672.28) (2,872.75) 3,382.97 0,248.10) 1,459.75 246.48 1,882,616.42 1,820,676.21 (999,100.00) (1,504,472.36) 999,100.00 $ (769,166.19) ($2.273.638.55) -15- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 (Over) Under Actual Budget Budget SPECIAL GASOLINE TAX Receipts Special gasoline tax $ 782,789.53 $ 780,000.00 ($ 2,789.53) Expenditures Personal services 68,007.58 69,390.00 1,382.42 Contractual services 398,864.07 400,000.00 1,135.93 Materials and supplies 146,511.39 165,350.00 18,838.61 Transfers to General Fund 150,000.00 150,000.00 Capital outlay 16, 728.64 17,000.00 271.36 Total Expenditures 780,111.68 801,740.00 21,628.32 Receipts Over (Under) Expenditures 2,677.85 (21,740.00) (24,417.85) Unencumbered Cash Balance, January 1 69,771.75 59,829.00 (9,942.75) Unencumbered Cash Balance, December 31 $ 72.449.60 $ 38.089.00 ($ 34.360.60) TOURISM AND CONVENTION PROMOTION Receipts Transient guest tax $ 146,836.76 $ 185,000.00 $ 38,163.24 Expenditures Contractual serV1ces 210,000.00 210,000.00 Receipts Over (Under) Expenditures (63,163.24) (25,000.00) 38,163.24 Unencumbered Cash Balance, January 1 64,644.61 63,161.00 (1,483.61) Unencumbered Cash Balance, December 31 $ 1.481.37 $ 38. 161. O(~ $ 36.679.63 EMPLOYEE BENEFIT FUND Receipts Current tangible taxes $ 978,008.46 $ 990,818.00 $ 12,809.54 Delinquent taxes 26,451.89 15,000.00 01,451.89) Interest on investments 17,990.45 18,000.00 9.55 Social security contributions 12,843.98 15,000.00 2,156.02 Employees retirement contributions 5,747.74 12,000.00 6,252.26 Unemployment insurance contributions 633.82 1,000.00 366.18 Reimbursement of expenditures 104,222.91 103,000.00 0,222.91) Vehicle tax 321,320.63 271,100.00 (50,220.63) Transfers from General Fund 40,000.00 40,000. O(~ Total Receipts 1,507,219.88 1,465,918.0(~ (41,301.88) -16- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 (Over) Under Actual Budget Budget EMPLOYEE BENEFIT FUND (CONTD.) Expenditures Public officials and employee liability insurance $ 50,459.00 $ 50,000.00 ($ 459.00) Social security 209,482.90 225,000.00 15,517.10 Police and fire retirement 627,124.71 638,000.00 10,875.29 Employees retirement 98,514.87 150,000.00 51,485.13 Group insurance 424,826.62 470,000.00 45,173.38 Unemployment 1nsurance 25,493.46 25,000.00 (493.46) Workman's compensation 122,000.00 122,000.00 Earned leave 46,859.15 40,000.00 (6,859.15) Other 1,151.05 (1,151.05) Total Expenditures 1,605,911.76 1,720,000.00 114,088.24 Receipts Over (Under) Expenditures (98,691.88) (254,082.00) 055,390.12) Unencumbered Cash Balance, January 1 375,917.27 254,082.00 (121,835.27) Unencumbered Cash Balance, December 31 $ 277.225.39 $ ($ 277.225.39) UTILITY FUND Receipts Current tangible taxes $ 445,724.11 $ 451,571.00 $ 5,846.89 Delinquent taxes 9,886.72 5,000.00 (4,886.72) Interest on investments 2,005.92 2,000.00 (5.92) Vehicle taxes 120,831.02 102,800.00 08,031. 02) Transfers from General Fund 12,000.00 15,000.00 3,000.00 Total Receipts 590,447.77 576,371.00 (14,076.77) Expenditures Gas service 37,335.95 80,000.00 42,664.05 Light and power serV1ce 214,362.25 210,000.00 (4,362.25) Water service 36,770.34 43,000.00 6,229.66 Traffic control signals 41,539.67 38,000.00 0,539.67) Street lighting 251,796.18 300,000.00 48,203.82 Total Expenditures 581,804.39 671,000.00 89,195.61 Receipts Over (Under) Expenditures 8,643.38 (94,629.00) 003,272.38) Unencumbered Cash Balance, January 1 180,092.04 94,629.00 (85,563.04) Unencumbered Cash Balance, December 31 $ 188,735.42 $ ($ 188,735.42) -17- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 Actual SPECIAL PARKS AND RECREATION Receipts City liquor tax $ 45,769.64 Expenditures Transfer to General Fund 45,769.64 Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ SPECIAL ALCOHOL PROGRAMS Receipts City liquor tax $ 45,769.63 Expenditures Contractual serV1ces 45,000.00 Receipts Over (Under) Expenditures 769.63 Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ 769.63 SPECIAL LIABILITY FUND Receipts Current tangible taxes Delinquent tangible taxes Vehicle taxes Total Receipts $ 193,760.31 800.52 9,607.82 204,168.65 Expenditures Professional services Liability insurance Total Expenditures 22,308.22 261,093.00 283,401.22 (79,232.57) Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 131,608.33 Unencumbered Cash Balance, December 31 $ 52,375.76 Budget $ 45,662.00 ($ 46,000.00 (338.00) 338.00 $ $ 45,663.00 ($ 46,000.00 (337.00) 337.00 $ $ 196,284.00 600.00 8,300.00 205,184.00 293,920.00 293,920.00 (88,736.00) 88,736.00 $ (Over) Under Budget 107.64) 230.36 (338.00) 338.00 $ 106.63) 1,000.00 0,106.63) 337.00 ($ 769.63) $ 2,523.69 (200.52) (1,307.82) 1,015.35 (22,308.22) 32,827.00 10,518.78 (9,503.43) (42,872.33) ($ 52,375.76) -18- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 (Over) Under Actual Budget Budget FAIR HOUSING ASSISTANCE PROGRAM (NOTE 2) Receipts Reimbursement of expenditures $ 20,236.09 Expenditures Personal services 4,570.72 Contractual serV1ces 6,229.52 Materials and supplies 1,316.37 Total Expenditures 12,116.61 Receipts Over Expenditures 8,119.48 Unencumbered Cash Balance (Deficit), January 1 (6,000.09) Unencumbered Cash Balance, December 31 $ 2.119.39 BUSINESS IMPROVEMENT DISTRICT Receipts Assessment fees $ 17,001.10 $ 20,000.00 $ 2,998.90 Transfers from other funds 15,000.00 15,000.00 Total Receipts 17,001.10 35,000.00 17,998.90 Expenditures Personal serV1ces 24,000.00 24,000.00 Contractual serV1ces 2,320.09 8,650.00 6,329.91 Materials and supplies 8.15 1,600.00 1,591.85 Sundry expenditures 350.00 350.00 Capital outlay 500.00 500.00 Total Expenditures 2,328.24 35,100.00 32,771.76 Receipts Over (Under) Expenditures 14,672.86 000.00) 04,772.86) Unencumbered Cash Balance, January 1 7,412.04 6,673.00 (739.04) Unencumbered Cash Balance, December 31 $ 22,084.90 $ 6,573.0(l ($ 15,511.90) -19- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 EQUIPMENT RESERVE FUND Receipts Interest from investments Transfers from General Fund Total Receipts Expenditures Capital outlay Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 BOND AND INTEREST Receipts Current tangible taxes Delinquent tangible taxes Current special assessment taxes Delinquent special assessment taxes Interest from investments Accrued interest on bonds sold Special assessments Transfers from other funds Vehicle taxes Total Receipts Expenditures General bond principal General bond interest Curb, gutter and paving principal (City share) Curb, gutter and paving principal (Property owner share) Curb, gutter and paving interest (City share) Curb, gutter and paving interest (Property owner share) Fiscal agency commission and postage Estimated interest - Bonds to be issued Special assessment refund Total Expenditures (Over) Under Actual Budget Budget $ 8,000.00 $ 8,000.00 $ 200,000.00 200,000.00 208,000.00 208,000.00 77 ,469. 71 86,000.00 8,530.29 130,530.29 122,000.00 (8,530.29) $ $ 122,000.00 ($ 8,530.29) 130,530.29 $ 774,524.03 $ 784,686.00 $ 10,161.97 18,670.60 15,000.00 0,670.60) 641,260.86 625,000.00 06,260.86) 124,418.93 40,000.00 (84,418.93) 12,643.26 20,000.00 7,356.74 12,701.10 2,000.00 (10,701.10) 2,829.07 6,000.00 3,170.93 126,000.00 126,000.00 229,165.23 200,000.00 (29,165.23) 1,942,213.08 1,818,686.00 (123,527.08) 635,000.00 635,000.00 246,988.00 247,000.00 12.00 135,134.40 132,000.00 0,134.40) 582,865.60 502,900.00 (79,965.60) 55,413.00 51,400.00 (4,013.00) 301,394.29 195,700.00 005,694.29) 801.96 1,000.00 198.04 275,000.00 275,000.00 6,811.56 (6,811.56) 1,964,408.81 2,040,000.00 75,591.19 -20- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 Actual Budget BOND AND INTEREST (CONTD.) Receipts Over (Under) Expenditures ($ 22,195.73)($ 221,314.00)($ Unencumbered Cash Balance, January 1 326,439.99 221,314.00 Unencumbered Cash Balance, December 31 $ $ 304,244.26 CONSTRUCTION FUND (NOTE 2) Receipts Temporary notes Issuance of general obligation internal improvement bonds Transfers from other funds Other Total Receipts $1,800,000.00 5,000,000.00 100,000.00 231,869.72 7,131,869.72 Expenditures Payment of temporary notes and interest Transfers to other funds Construction and capital outlay Total Expenditures 4,809,494.38 70,000.00 2,610,436.51 7,489,930.89 Receipts Over (Under) Expenditures (358,061.17) Unencumbered Cash Balance, January 1 1,236,321. 94 Unencumbered Cash Balance, December 31 $ 878,260.77 GOLF COURSE Receipts Membership and green fees Cart rental Cart storage Cart user fees Oil well lease Sales Total Receipts $ $ 186,000.00 ($ 53,000.00 5,500.00 5,000.00 5,000.00 40,000.00 294,500.00 214,077.00 75,700.04 5,670.00 5,079.00 3,027.15 58,482.03 362,035.22 (Over) Under Budget 199,118.27) (105,125.99) ($ 304,244.26) 28,077.00) (22,700.04) 070.00) (79.00) 1,972.85 (18,482.03) (67,535.22) -21- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 Actual GOLF COURSE (CONTD.) Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures $ 128,733.36 46,570.26 63,086.07 44,334.18 30 , 171 . 64 312,895.51 Receipts Over (Under) Expenditures 49,139.71 Unencumbered Cash Balance, January 1 5,876.48 Unencumbered Cash Balance, December 31 $ 55.016.19 SANITATION Receipts Interest from investments Miscellaneous sales and services Service fees Reimbursement of expenditures Total Receipts $ 3,000.00 1,119.97 709,165.00 702.01 713,986.98 Expenditures Personal services Contractual services Materials and supplies Transfer to Bond and Interest Fund Capital outlay Total Expenditures 281,274.37 155,706.11 83,710.32 134,000.00 32,283.60 686,974.40 Receipts Over (Under) Expenditures 27,012.58 Unencumbered Cash Balance, January 1 299,146.35 Unencumbered Cash Balance, December 31 $ 326,158.93 Budget $ 124,400.00 ($ 46,900.00 50,200.00 54,460.00 34,570.00 310,530. O(~ 06,030.00) 40, 730.0(~ $ 24, 700.0(~ ($ $ 3,000.00 2,000.00 704,000.00 1 ,000 . O(~ 710,000.00 301,500.00 164,130.00 91,180.00 134,000.00 47 ,250.0(~ 738,060.0(~ (28,060.00) $ 317,248.0(~ 289,188.0(~ ($ (Over) Under Budget 4,333.36) 329.74 02,886.07) 10,125.82 4,398.36 (2,365.51) (65,169.71) 34,853.52 30,316.19) $ 880.03 (5,165.00) 297.99 (3,986.98) 20,225.63 8,423.89 7,469.68 14,966.40 51,085.60 (55,072.58) 18,101.65 36,970.93) -22- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 Actual PARKING METERS Receipts Parking meter permits Transfers from General Fund Total Receipts $ 40,000.00 40,000.00 Expenditures Personal services Contractual services Materials and supplies Total Expenditures 35,078.40 5,379.25 40,457.65 Receipts Over (Under) Expenditures (457.65) Unencumbered Cash Balance, January 1 1,140.54 Unencumbered Cash Balance, December 31 $ 682.89 BICENTENNIAL CENTER Receipts Rent Concessions Reimbursement of expenditures Transfers from General Fund Total Receipts $ 149,006.88 235,775.15 1,196.39 200,000.00 585,978.42 Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures 321,906.08 62,278.22 44,321.92 88,068.12 25,534.22 542,108.56 Receipts Over (Under) Expenditures 43,869.86 Unencumbered Cash Balance, January 1 116,175.87 Unencumbered Cash Balance, December 31 $ 160,045.73 Budget $ 38,300.00 38,300.00 35,000.00 800 00 5,600.00 41 ,400. 00 0,100.00) 3,152.0(~ $ 52.0(2 ($ $ 130,000.00 ($ 215,000.00 3,000.00 200,000.00 548,000 . O(~ 324,050.00 64,600.00 44,200.00 86,600.00 25,290.00 544,740. OC~ 3,260.00 44, 931. OC~ $ 48 , 191. OC~ ($ (Over) Under Budget $ 38,300.00 (40,000.00) (1,700.00 ) (78.40) 800.00 220.75 942.35 (2,642.35) 2,011 .46 630.89) 19,006.88) (20,775.13) 1,803.61 (37,978.42) 2,143.92 2,321.78 021. 92) 0,468.12) (244.22) 2,631.44 (40,609.86) (71,244.87) 111 , 854. 73) -23- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 (Over) Under Actual Budget Budget $ 5,472.06 $ 100.00 ($ 5,372.06) 320,286.68 265,000.00 (55,286.68) 20,088.83 (20,088.83) 345,847.57 265,100.0(~ (80,747.57) 82,240.09 86,000.00 3,759.91 30,725.75 34,420.00 3,694.25 54,859.13 77,240.00 22,380.87 80,000.00 60,000 . O(~ (20,000.00) 247,824.97 257 ,660. O(~ 9,835.03 98,022.60 7,440.00 (90,582.60) 315,716.86 276,281.0C~ 09,435.86) $ 413,739.46 $ 283, 721.0(~ ($ 130,018.46) SOLID WASTE DISPOSAL Receipts Income from leased land Service fees Reimbursement of expenditures Total Receipts Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 WATER AND SEWERAGE FUND Receipts Water Sewerage Sanitation fees Tapping and front footage service Service charge - Sanitation department Meter repair and service line revenue Interest income Miscellaneous income Sales tax collections Meter deposits Sale of assets Issuance of Combined Water and Sewage System Revenue Bonds, Series of 1987 Reserve for Extension and Bond Re- tirement Reserve for Depreciation and Emergency Total Receipts $3,261,160.80 741,419.56 708,406.61 18,768.44 13,085.81 10,945.86 13,153.89 114,600.97 61,420.08 37,040.00 1,511. 00 2,650,000.00 92,785.71 7,724,298.73 $2,989,200.00 ($ 730,400.00 704,000.00 10,000.00 12,500.00 15,000.00 93,900.00 30,000.00 46,000.00 34,000.00 271,960.80) 01,019.56) (4,406.61) (8,768.44) (585.81) 4,054.14 80,746.11 (84,600.97) 05,420.08) (3,040.00) 0,511.00) (2,650,000.00) 400,000.00 400,000.00 400,000 . OC~ 5,465,000.OO~ 307,214.29 (2,259,298.73) -24- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 WATER AND SEWERAGE FUND (CONTD.) Expenditures Water supply Softening and treatment Pumping Distribution Customer accounting and collection Administrative and general Sewage treatment and collection Bond ordinance requirements Transfer to Sanitation Department - Service fees Capital expenditures Sales tax remitted Meter deposits refunded Bond issue costs Transfer to Reserve for Extension and Bond Retirement Reserve for Depreciation and Emergency Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 BICENTENNIAL CENTER EVENTS FUND (NOTE 5) Receipts Expenditures Transfer of net rental fees to Bicentennial Center Fund Special events expenditures Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 (Over) Under Actual Budget Budget $ 118,059.30 $ 97,400.00 ($ 20,659.30) 867,633.44 852,950.00 04,683.44) 189,864.08 215,990.00 26,125.92 371,922.05 364,240.00 0,682.05) 332,157.50 323,350.00 (8,807.50) 737,479.35 743,720.00 6,240.65 599,539.80 645,200.00 45,660.20 372,342.75 389,600.00 17,257.25 709,165.00 704,000.00 (5,165.00) 2, 319, 121. 64 400,000.00 0 , 919, 121. 64) 61,420.08 42,000.00 09,420.08) 34,690.00 20,000.00 04,690.00) 27,138.23 (27,138.23) 400,000.00 400,000.00 400,000. OC~ 400,000.00 6,740,533.22 5,598,450.0C~ (1,142,083.22) 983,765.51 033,450.00) 0,117,215.51) 184,418.58 329,863.0C~ 145,444.42 $1,168,184.09 $ 196,413.0q ($ 971,771. 09) $ 726,176.04 58,363.77 648,197.08 706,560.85 19,615.19 13 ,409.00 $ 33,024.19 -25- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 DATA PROCESSING Receipts Sale of commodities $ 1,108.34 $ 750.00 ($ 358.34) Fees 140,450.00 159,500.00 19,050.00 Computer programm1ng serV1ce 1,853.50 4,000.00 2,146.50 Total Receipts 143,411.84 164,250.00 20,838.16 Expenditures Personal services 75,585.36 75,600.00 14.64 Contractual services 53,917.35 112,100. DO 58,182.65 Materials and supplies 3,551.24 5,000. O(~ 1,448.76 Total Expenditures 133,053.95 192,700.00 59,646.05 Receipts Over (Under) Expenditures 10,357.89 (28,450.00) (38,807.89) Unencumbered Cash Balance, January 1 38,238.55 50,042 . OC~ 11 ,803.45 Unencumbered Cash Balance, December 31 $ 48,596.44 $ 21,592.0(~ ($ 27,004.44) Budget (Over) Under Budget Actual PRINCIPAL AND INTEREST ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 AND COMBINED WATER AND SEWAGE SYSTEM REVENUE BONDS, SERIES OF 1987 (NOTE 2) Receipts Interest from investments Transfers from Water and Sewerage Fund Total Receipts $ 15,228.39 372 , 342. 75 387,571.14 210,000.00 170,177 . 50 380,177.50 7,393.64 357,744.63 $ 365,138.27 Expenditures Bond principal Bond interest Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 -26- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 (NOTE 2) Re ceipts Interest from investments Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REVENUE BONDS, SERIES OF 1987 (NOTE 2) Receipts Transfer from Reserve for Depreciation and Emergency Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM DEPRECIATION AND EMERGENCY REPLACEMENT (NOTE 2) Receipts Transfer from Reserve for and Bond Retirement Interest from investments Total Receipts Extension Expenditures Transfer to Water and Sewerage Fund Transfer to Reserve for Revenue Bonds, Series of 1987 Total Expenditures Actual (Over) Under Budget Budget $ 43,224.06 43,224.06 615,314.60 $ 658,538.66 $ 265,000.00 265,000.00 $ 265,000.00 $ 59,021.50 20,411.49 79,432.99 92,785.71 265,000.00 357,785.71 -27- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM DEPRECIATION AND EMERGENCY REPLACEMENT (NOTE 2) (CONTD. ) Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM EXTENSION AND BOND RETIREMENT (NOTE 2) Receipts Interest from investments Expenditures Transfer to Reserve for Depreciation and Emergency Replacement Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 CENTRAL GARAGE (NOTE 2) Receipts Reimbursement of expenditures Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures Actual (Over) Under Budget Budget ($ 278,352.72) 628,352.72 $ 350,000.00 $ 21,147.67 59,021.50 (37,873.83) 760,632.03 $ 722,758.20 $ 468,737.82 101,197.35 15,864.91 349,888.48 19,339.71 4,415.27 490,705.72 -28- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 CENTRAL GARAGE (NOTE 2) (CONTD.) Budget (Over) Under Budget Actual Receipts Over (Under) Expenditures ($ 21,967.90) (6,246.79) ($ 28,214.69) Unencumbered Cash Balance (Deficit), January 1 Unencumbered Cash Balance (Deficit), December 31 RISK MANAGEMENT Receipts Reimbursement of expenditures $ 632,455.00 $ ($ 632,455.00) Transfers from Other Funds 611,970.0(~ 611,970.00 Total Receipts 632,455.00 611,970. OC~ (20,485.00) Expenditures Personal serV1ces 34,180.56 36,000.00 1,819.44 Contractual services 500,120.29 87,000.00 (413,120.29) Materials and supplies 3,290.59 2,000.00 0,290.59) Sundry expenditures 542.36 485,720.00 485, 177. 64 Capital outlay 6,631.85 1,250.00~ (5,381. 85) Total Expenditures 544,765.65 611,970.00~ 67,204.35 Receipts Over (Under) Expenditures 87,689.35 (87,689.35) Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ 87,689.35 $ ($ 87,689.35) CITIZENSHIP TRUST (NOTE 2) Receipts Interest from investments $ 998.00 Expenditures Contractual serV1ces Receipts Over Expenditures 998.00 Unencumbered Cash Balance, January 1 13,685.81 Unencumbered Cash Balance, December 31 $ 14,683.81 -29- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 HUD COMMUNITY DEVELOPMENT (NOTE 2) Receipts Interest from investments Collection of housing and winteri- zation loans - Principal and interest Community Development Block Grants Reimbursement of expenditures Total Receipts Budget (Over) Under Budget Actual $ 1,228.88 17,724.35 868,150.00 6,872.54 893,975.77 Expenditures Personal services Contractual services Materials and supplies Economic development loans Total Expenditures 17,402.82 57,967.10 3.15 790,000.00 865,373.07 Receipts Over Expenditures 28,602.70 Unencumbered Cash Balance, January 1 19,347.44 Unencumbered Cash Balance, December 31 $ 47,950.14 CEMETERY ENDOWMENT (NOTE 2) Receipts Perpetual care deposits $ 6,955.02 Expenditures Receipts Over Expenditures 6,955.02 Unencumbered Cash Balance, January 1 89,811.74 Unencumbered Cash Balance, December 31 $ 96,766.76 MAUSOLEUM ENDOWMENT (NOTE 2) Receipts $ Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 17,624.17 Unencumbered Cash Balance, December 31 $ 17,624.17 -30- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1987 Actual Budget (Over) Under Budget FIRE INSURANCE PROCEEDS (NOTE 2) Receipts Reimbursement of expenditures $ 2,800.00 Expenditures Receipts Over Expenditures 2,800.00 Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ 2,800.00 The accompanying notes are an integral part of this financial statement. -31- CITY OF SALINA Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 1987 1. Summary of Significant Accounting Policies The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restric- tions placed on the use of resources available. This is the procedure by which resources are classified for accounting and reporting into funds estab- lished according to their nature and purposes. The City of Salina maintains its accounting records for all funds on the cash basis, except that expenditures incurred but not paid and purchase commitments at December 31 are recorded as encumbrances at that date. This method serves to develop information relative to compliance with the budget, cash basis, and other statutes applicable to municipalities within the State of Kansas. The method is not, however, in accordance with generally accepte~d accounting principles for municipalities. Generally accepted accounting principles require: a. Certain accounts receivable and loans receivable relating to Federal Funds to be recorded in the financial statements. The City does not record these receivables until they are collected in cash. b. Expenditures to be recorded generally on the accrual basis. The City records purchase commitments as encumbrances at year-end, and any loss from loss contingencies is not recorded until the amount of the loss is payable. c. The General Fixed Assets and the General Long-Term Debt Account Groups to be maintained. The City does not maintain these account groups. d. Transfers between funds to be recorded as reductions to fund balance of the fund making the transfers and as additions to fund balance of the fund receiving the transfer. The City records such transfers as expenditures of the fund making the transfer and as receipts of the fund receiving the transfer. e. The annual financial statements to include a combined balance sheet for all fund types and account groups; a combined statement of revenues, expenditures, and changes in fund balance for all governmental fund types and expendable trust funds; and a combined statement of revenues, expendi- tures, and changes in fund balance and combined comparison with budget for all governmental fund types. These required financial statements are not included in this report. The City has, by charter ordinance, elected to exempt itself from the Kansas statutory requirement to maintain fixed asset records, and has requested the Director of Accounts and Reports to waive the requirements of K.S.A. 75-l120a as related to the preparation of financial statements in conforITlity with gener- ally accepted accounting principles. -32- 2. Budgets Applicable Kansas statutes require that unless exempted by a specific statute. contain several funds for which budgets omitting certain budget comparisons are budgets be legally adopted for all funds The accompanying financial statements were not prepared. The reasons for described below. Special Revenue Funds - Certain of the special revenue funds are not budgeted since their revenues are designated for a special purpose or the fund represents a clearing account. Capital Projects Fund - The capital projects fund is not budgeted since provision for payment of expenditure is from the issuance of bonds, temporary notes, and special assessments and charges. Water and Sewerage Bond Fund and Reserve Accounts - These funds are not budgeted since receipts and expenditures are in accordance with requirements of applicable bond 1ssues. Central Garage - The fund is an intragovernmental fund whose expenditures are reimbursable by other funds. Trust and Agency Funds - The individual trust and agency funds are not subject to the budget law since the assets do not belong to the City of Salina. 3. Cash Balances Kansas municipalities, such as the City of Salina, are authorized by Kansas statutes to invest funds in: (2 ) (3) (4) (5 ) (1) Temporary notes or no-fund warrants issued by the investing governmental unit, Time deposit, open accounts or certificates of deposit, Time certificates of deposit, Repurchase agreements, and United States Treasury bills or notes with maturities not exceeding six months. Deposits or investments with qualifying financial institutions are to be secured by a bond or by the pledge of certain types of securities specified by statute. Cash and investments of the City of Salina were 100% insured or collateralized by securities provided by depository financial institutions at December 31, 1987. Cash and investments were comprised of the following as of December 31, 1987. Petty cash funds Cash in checking and temporarily invested in repurchase agreements Cash in savings Certificates of deposit $ 4,000.00 508,299.79 31,391.78 10,701,000.00 Total $11,244,691.57 -33- 4. Long-Term Obligations a. Changes in Long-Term Debt The following is a summary of bond transactions of the City for the year ended December 31, 1987: General Obligation Revenue Total Outstanding bonds at January 1, 1987 New bonds issued: 1987 Internal improvement 1987 Water and Sewerage Bonds retired $ 8,703,000.00 $1,970,000.00 $10,673,000.00 5,000,000.00 5,000,000.00 2,650,000.00 2,650,000.00 (1,353,000.00) (210,000.00) (1,563,000.00) Outstanding Bonds at December 31, 1987 $12,350.000.00 $4,410,000.00 ß16,760,OOO.00 Outstanding bonds at December 31, 1987, are comprised of the following indi- vidual issues: General Obligation Bonds: $8,115,000 General Obligation Refunding Bonds, Series 1985, due in semi-annual installments of $160,000 to $520,000 through April 1, 1996, interest at 7.0% to 9.0%. :;; 5,450,000.00 $1,983,000 General Obligation Internal Improvement Bonds, Series 1986, due in annual installments of $120,000 to $270,000 through December 1, 1996, interest at 5.2% to 5.7%. 1,900,000.00 $5,000,000 General Obligation Internal Improvement Bonds, Series 1987, due in annual installments of $500,000 through December 1, 1997, interest at 6.10% to 6.65%. 5,000,000.00 Total ~n2,350,000.00 Revenue Bonds: $2,770,000 Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, due in annual install- ments of $160,000 to $345,000 through February 15, 1994, interest at 8.50% to 9.75%. ~; 1,760,000.00 $2,650,000 Combined Water and Sewage System Revenue Bonds, Series of 1987, due in annual installments of $70,000 to $230,000 through October 1, 2007, interest at 7.0% to 9.5%. 2,650,000.00 Total 3: 4,410,000.00 -34- The annual requirements to amortize all bonds outstanding as of December 31, 1987, are as follows: Payable in Year Ended December 31, Principal 1988 1989 1990 1991 1992 Thereafter Total Principal Interest 1988 1989 1990 1991 1992 Thereafter Total Interest Total Principal and Interest General Obligation Revenue Total $ 1,640,000.00 $ 300,000.00 $ 1,940,000.00 1,580,000.00 325,000.00 1,905,000.00 1,465,000.00 355,000.00 1,820,000.00 1,335,000.00 275,000.00 1,610,000.00 1,240,000.00 400,000.00 1,640,000.00 5,090,000.00 2,755,000.00 7,845,000.00 12,350,000.00 4,410,000.00 16,760,000.00 835,327.50 361,112.50 1,196,440.00 726,275.00 333,750.00 1,060,025.00 618,868.75 303,687.50 922,556.25 519,240.00 275,772.50 795,012.50 429,081. 25 245,237.50 674,318.75 892,120.00 1,659,857.50 2,551,977.50 4,020,912.50 3,179,417.50 7,200,330.00 $16,370.912.50 $7,589,417.50 ill,960,330.00 The City's share and property owner's share of the general obligation bonds outstanding is $9,410,279.12 and $6,960,633.38, respectively. b. General Obligation and Special Assessment Bonds The City issued its General Obligation Refunding Bonds, Series 1985 (the 1985 Bonds), dated October 15, 1985, for the purpose of refunding all the City's then outstanding General Obligation and Special Assessment Bonds (the Refunded Bonds). Cash and bond proceeds were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agreement dated as of October 15, 1985, to provide the necessary funds for refunding of the Refunded Bonds. Funds transferred to the Refunding Escrow Trust Account were invested in United States Government obligations, and the investments and interest earned on such investments will be sufficient to pay all principal and interest on the Refunded Bonds as they become due. The principal amount of $6,121,000.00 of the Refunded Bonds ]remains outstanding at December 31, 1987. Neither the assets deposited with the escrow agent for the retirement of the Refunded Bonds nor the outstanding Refunded Bonds are reflected in the accompanying financial statements. -35- c. Revenue Bonds The City has outstanding an issue of Combined Water and Sewer System Revenue Bonds, Series of 1977, of which the principal amount: of $2,830,000.00 remains outstanding at December 31, 1987, and an issue of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978, of which the principal amount of $4,385,000.00 remains out- standing at December 31, 1987. The City has provided for the payment of all principal and interest on the bonds by depositing United States Government obligations in escrow accounts at a local bank pursuant to certain escrow trust agreements. Neither the assets deposited with the escrow agent for retirement of the 1977 and 1978 bonds nor the outstanding 1977 and 1978 obligations, are reflected in the accompanying financial statements. The City has established certain reserve accounts pursuant to bond ordinances authorizing the issuance of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and the Combined Water and Sewage System Revenue Bonds, Series of 1987, to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Water and Sewerage Department are pledged to secure payment of the bonds; however, the pledge is subordinate to a similar pledge to secure payment of the 1977 and 1978 bonds. The amounts required to be maintained in the reserve accounts estab- lished by the bond ordinances authorizing issuance of the 1984 and 1987 bonds have been provided and the total revenues of the water and sewerage system appear sufficient to meet the requirements of the ordinance. 5. Bicentennial Center Events Fund The Bicentennial Center Events Fund is used as a clearing account for special events when the City acts as the promotor's agent. Receipts from special events are deposited in the fund and related expenses are disbursed from the fund. The City's rental fees from such events are transferred from the fund to the Bicentennial Center Fund. 6. Capital Projects Fund The Capital Projects Fund is used to account for the purchase or construction of capital facilities, equipment, and public improvements. A summary of the fund's unencumbered cash balance at December 31" 1987, follows: Cash balance resulting from Capital projects completed Capital projects in process Special assessments projects Reserves for future capital projects $739,727.25 13,793.79 007,837.96) 232,577.69 Total $878,260. i'7 -36- The deficit resulting from special assessments projects will be funded by issuance of temporary notes or general obligation bonds 1n a later period. 7. Financing of Deficit Cash Balance Expenditures of the Central Garage are reimburseable by other funds. revenues of the fund exceed the unencumbered cash deficit at December 1987; accordingly, such deficit is not a violation of the Kansas cash law pursuant to K.S.A. 10-1116(b)(3). 8. Compliance with Kansas Statutes Accrued 31, basis A summary of statutory violations related to 1987 follows. Expenditures of the Golf Course exceeded budgeted expenditures for the year ended December 31, 1987, by $2,365.51, which appears to be a violation of the Kansas budget law (K.S.A. 79-2935). a. b. The assets pledged by a bank to secure cash deposits of the City were not sufficient to meet the requirements of K.S.A. 9-1402 during the month of October, 1987. 9. Fund Transfers Following is a schedule of transfers between funds for the year 1987. From Special Parks and Recreation Special Gasoline Tax General Fund - Street General Fund - Contingencies General Fund Contingencies Sanitation Water and Sewerage - Administrative and general Water and Sewerage General Fund - Capital improvements General Fund - Police Bicentennial Center Events Fund Water and Sewerage - Bond Ordinance requirements General Fund - Museum General Fund - Capital Improvements To Amount General Fund General Fund Street Machinery Parking meters Employee Benefit Fund Bond and Interest $ 45,769.64 150,000.00 25,000.00 40,000.00 40,000.00 114,000.00 Bond and Interest Sanitation - Service Fees 12,000.00 709,165.00 Equipment Reserve Equipment Reserve Bicentennial Center - Rent 150,000.00 50,000.00 58,363.77 Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and Com- bined Water and Sewage System Revenue Bonds, Series of 1987 Ut il ity Fund 372,342.75 12,000.00 Bicentennial Center 200,000.00 -37- From Sanitation Solid Waste Solid Waste - Equipment Replacement Construction Fund Construction Fund Reserve Account for Combined Water and Sewage System Depreciation and Emergency Replacement Reserve Account for Combined Water and Sewage System Depreciation and Emergency Replacement Reserve Account for Combined Water and Sewage System Extension and Bond Retire- ment 10. Defined Benefit Pension Plan To Construction Construction Construction General Fund - Enginering fees Solid Waste Water and Sewerage - Reserve for Deprecia- tion and Emergency Reserve Account for Com- bined Water and Sewage System Revenue Bonds, Series of 1987 Reserve Account for Com- bined Water and Sewage System Depreciation and Emergency Replacement Amount $ 20,000.00 40,000.00 40,000.00 50,000.00 20,000.00 92,785.71 265,000.00 59,021.50 Substantially all full-time employees of the City of Salina participate in the Kansas Public Employees Retirement System (the System), a multiple-employer public employee retirement system. A group of employees participate in the Kansas Police and Firemen System (KP&F), a separate program administered by the System. Following is a summary of covered payroll and contributions to the System for the year ended December 31, 1987. Covered Payroll General employees Police and firemen $3,764,415.75 3,074,140.74 Totals $6,838,556.49 Employer Contributions Employee Total $: 297,388.92 821,463.60 $146,857.36 627,124.71 $150,531. 56 194,338.89 ~1,118,852.52 The total payroll for the City of Salina was $7,433,379.45 for the year ended December 31, 1987. $773,982.07 $344,870.45 Substantially all general employees of the City of Salina are eligible to par- ticipate in the System after one year of employment. Employees who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1 percent of their final average salary for each year of "prior" ser- vice and 1.25 to 1.5 percent for each year of "participating" service depending upon the number of years of service. Final average salary is the employee's average salary over the highest four years of credited service. Benefits fully vest on reaching 10 years of service. Vested employees may retire at age 55 to 60 with 15 years of credited service and receive reduced retirement benefits. Vested employees may retire at age 60 to 65 with 10 or more years of credited service, also at reduced benefits. The system also provides death and disability benefits. Benefits are established by State statute. -38- Covered general employees are required by State statute to contribute 4% of their salary to the plan. The employer is required by the same statute to contribute the remaining amounts necessary to pay benefits when due. The employer's contribution was 3.9% of covered payroll for 1987. The retirement benefits for participants in KP&F are different from those described above for other participants in the System. Normal retirement for KP&F participants is at age 55. They can retire at age 50 with 20 years of service, but with reduced benefits. The contribution rate was 3% to 7% for employees and 20.4% for the employer for 1987. The "penson benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on a going-concern basis and assess progress made in accumulating sufficient assets to pay benefits when due. The System does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligation at June 30, 1986, for the System as a whole, determined through an actuarial valuation performed as of that date, was $3.74 billion. The System's net assets available for benefits on that date were estimated to be $2.91 billion, leaving an unfunded pension benefit obligation estimated at $830 million. Nine-year historical trend information showing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's 1987 comprehensive annual financial report, Page 52, "Solvency Test" table. 11. Water and Sewerage Fund Capital expenditures of the Water and Sewerage Fund for renovating the water and sewerage system were funded by the issuance of the Combined Water and Sewage System Revenue Bonds, Series of 1987, in the total amount of $2,650,000. Accordingly, expenditures of the Water and Sewerage Depart- ment are not in violation of the Kansas budget law (K.S.A. 79-2935) for the year 1987. 12. Special Assessments Projects Special assessments projects cumulative expenditures through December 31, 1987, are compared to project authorizations as follows: Project Name Project Authorization Cumulative Expenditures Street and Drainage Improvements and Water Line and Sanitary Sewer Extensions Downtown Redevelopment $ 758,910.88 6,500,000.00 $ 577,889.35 5,035,634.34 -39- 13. Temporary Notes The following is a summary of temporary note transactions of the City for the year ended December 31, 1987: Outstanding debt at January 1, 1987 Temporary notes issued Temporary notes paid $3,000,000.00 1,800,000.00 (4,500,000.00) Outstanding Debt at December 31, 1987 $ 300,000.00 Outstanding debt at December 31, 1987, is comprised of a $300,000 temporary note issued on November 1, 1987, at an interest rate of 6.9%, maturing on November 1, 1989. -40- Supplemental Information Cash in Depositories Bank IV, Salina, Kansas National Bank of America, Salina, Kansas First National Bank and Trust Comp any, Sa 1 ina, Kansas First Bank and Trust Co., Salina, Kansas Peoples Heritage Federal Savings and Loan Association, Salina, Kansas Total Cash in Depositories CITY OF SALINA Salina, Kansas Schedule 1 COMPOSITION OF ENDING CASH BALANCES December 31, 1987 Cash in Cash in Certificates Checking Savings of Deposit Total $ 88,934.140) $ $ 1,306,000.00 $ 1,394,934.14 150.00 3,330,000.00 3,330,150.00 396,662.46(2) 31,241. 78 10,000.00 437,904.24 22,703.19 1,615,000.00 1,637,703.19 4,440,000.00 4,440,000.00 $508,299.79 $31,391.78 $10,701,000.00 11,240,691.57 Petty Cash Water and Sewerage Department Bicentennial Center Total Petty Cash Total 0) 2,500.00 1,500.00 4,000.00 Includes Repurchase Agreement balance of $885,000.00. $11,244,691.57 (2) Includes Repurchase Agreement balance of $455,000.00. -41- CITY OF SALINA Salina, Kansas Schedule 2 COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY December 31, 1987 Gross Cash Balances Cash in checking Cash in savings Certificates of depos it Federal funds Totals Less FDIC or FSLIC coverage Balances Securable by Co 11ateral Security required 000%) Security provided by depositories Amount Undersecured by Statute $ Peoples Heritage Federal First National First Bank Savings Bank IV National Bank Bank and and Trust and Lo an -Salina of America Trust Company Co. Association 7,509.66 $ 2,833.75 $ 8,694.71 $ 24,279.99 $ 150.00 31,241. 78 1,306,000.00 3,330,000.00 10,029.70 1,615,000.00 4,440,702.74 885,000.00 455,000.00 2,198,509.66 3,332,983.75 504,966.19 1,639,279.99 4,440,702.74 107,509.66 102,833.75 49,966.19 124,279.99 100,000.00 $2,091,000.00 $3,230,150.00 $ 455,000.00 $1,515,000.00 $4,340,702.74 $2,091,000.00 $3,230,150.00 $ 455,000.00 $1,515,000.00 $4,340,702.74 4,253,105.79 5,006,281.67 990,984.00 3,571,638.00 5,367,463.41 $ $ $ $ $ -42- CITY OF SALINA Salina, Kansas Schedule 3 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Year Ended December 31, 1987 Federal Grantor/ Unencumbered Unencumbered Pass Through Federal Cash Balance Cash Balance Grantor/ CFDA January 1, December 31, Program Title Number 1987 Receipts Expenditures 1987 U.S. Department of the Treasury - Revenue Sharing Program 21. 300 $ $ 8,128.00 $ 8,128.00 $ u.s. Department of Housing and Urban Development - Fair Housing Assistance Program 14.401 (6,000.09) 20,236.09 12,116.61 2,119.39 U.S. Department of Housing and Urban Development - Community Development Block Grant/Small Cities Program (Passed Through Kansas Department of Commerce) 14.219 868,000.00 858,000.00 10,000.00 Total Federal Assistance ($ 6,000.09) $896,364.09 $878,244.61 $12,119.39 -43- SEPARATE FINANCIAL STATEMENTS WATER AND SEWERAGE DEPARTMENT CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT FINANCIAL STATEMENTS AND AUDITORS' REPORT December 31, 1987 and 1986 KENNEDY AND COE Certified Public Accountants Salina, Kansas HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO To the Mayor and The Board of City Commissioners: We have examined the balance sheets of the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1987 and 1986, and the related state- ments of income, contributed capital and retained earnings, and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered nec- essary in the circumstances. In our opinion, the financial statements referred to above present fairly the finan- cial position of the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1987 and 1986, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Respectfully submitted, Salina, Kansas June 14, 1988 I(~~(I~ ~.~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -44- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT Current Assets Cash and investments Accounts receivable, net of doubtful accounts - 1987, Accrued interest receivable Total Current Assets BALANCE SHEETS ASSETS allowance for $36,224; 1986, $34,361 Restricted Assets Construction fund Cash and investments System sinking fund Cash and investments Plant reserve fund Cash and investments System reserve fund Cash and investments Total Restricted Assets Property, Plant, and Equipment Land Water plant and equipment Sewerage plant and equipment Furniture and office equipment Construction in progress (Notes 4 and 6) Less accumulated depreciation Total Property, Plant, and Equipment Other Assets Prepaid supplies Deferred bond issuance costs, net accumulated amortization - 1987, 1986, $44,196 Total Other Assets Totals of $61,923; December 31, 1987 1986 $ 698,781 $ 395,128 321,117 69,766 1,089,664 294,256 55,465 744,849 2,355,935 365,138 357,745 923,539 615,314 1,072,758 1,388,985 4,717,370 2,362,044 291,939 116,263 15,237,405 15,055,951 10,430,057 10,100,761 205,473 169,182 330,523 275,322 26,495,397 25,717,479 13,834,463 13,238,701 12,660,934 12,478,778 235,173 229,469 133,315 123,904 368,488 353,373 $18,836,456 ,$15,939,044 The accompanying notes are an integral part of these financial statements. LIABILITIES Current Liabilities Accounts payable Customers' meter deposits Accrued interest payable Accrued liability for compensated absences Long-term obligations due within one year (Note 3) Total Current Liabilities Long-Term Obligations Revenue bonds due after one year (Note 3) Reserves, Contributed Capital Reserves System sinking fund Plant reserve fund System reserve fund Total Reserves and Retained Earnings Contributed capital and retained earn1ngs (Exhibit C) Total Reserves, Contributed Retained Earnings Exhibit A December 31, 1987 1986 $ 148,615 $ 132,595 62,840 60,490 112,911 67,065 133,067 124,615 300,000 210,000 757,433 594,765 4,110,000 1,760,000 365,138 923,539 1,072,758 2,361,435 357,745 615,314 1,388,985 2,362,044 11,607,588 11,222,235 Capital and 13,969,023 13,584,279 $18,836,456 $15,939,044 Totals -45- CITY OF SALINA Salina, Kansas Exhibit B WATER AND SEWERAGE DEPARTMENT STATEMENTS OF INCOME Operating Revenues Water revenue Sewerage revenue Tapping service and frontage charges Meter repair and service line revenue Service charge - Sanitation department Miscellaneous income Total Operating Revenues Year Ended December 31, 1987 1986 $3,289,884 $2,927,062 741,420 701,997 18,768 17,620 10,946 15,093 13,086 12,780 20,737 25,184 4,094,841 3,699,736 118,059 99,553 869,243 856,154 190,566 191,586 367,811 411,754 333,842 321,147 729,962 698,632 601,783 608,397 631,667 612,085 3,842,933 3,799,308 251,908 (99,572) 127,466 148,555 93,864 93,874 221,330 242,429 164,258 181,843 17,388 17,388 26,676 8,253 208,322 207,484 $ 264,916 ($ 64,627) Operating Expenses Water supply Softening and treatment Pumping Distribution Customers' accounting and collection Administrative and general (Note 5) Sewage treatment and collection Depreciation Total Operating Expenses Operating Income (Loss) Other Income Interest on investments Miscellaneous Total Other Income Other Expenses Interest on revenue bonds (Note 4) Amortization of deferred bond 1ssuance costs Loss on retirement of assets Total Other Expenses Net Income (Loss) The accompanying notes are an integral part of these financial statements. -46- CITY OF SALINA Salina, Kansas Exhibit C WATER AND SEWERAGE DEPARTMENT STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS Balance, Beginning of Year, as previously reported Prior Period Adjustments (Note 8) Balance, Beginning of Year, as restated Year Ended December 31, 1987 1986 $11,189,269 $11,292,958 32,966 44,901 11 ,222,235 11,337,859 264,916 (64,627) 119,828 380,178 501,547 357,786 114,114 1, 122, 70E~ 551,034 Additions Net income (loss) for the year (Exhibit B) Contributions of property, plant and equipment Transfers from System sinking fund reserve System reserve fund Total Additions Deductions Transfers to restricted System sinking fund Plant reserve fund System reserve fund Total Deductions reserves 387,571 308,225 41,55Ç~ 737,35:~ 524,691 46,348 95,619 666,658 Balance, End of Year $11,607,58t~ $11,222,235 The accompanying notes are an integral part of these financial statements. -47- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT Exhibit D STATEMENTS OF CHANGES IN FINANCIAL POSITION Sources of Working Capital From Operations Net income (loss) (Exhibit B) Charges against net income not affecting working capital Depreciation Amortization of deferred bond issuance costs Loss on dispositions of property, plant, and equipment Working capital provided by operations Decrease in prepaid supplies Increase in long-term obligations Proceeds from sale of property, plant, and equipment Total Sources of Working Capital Applications of Working Capital Decrease in long-term obligations Increase in bond issuance costs Additions to property, plant, and equipment (net of contributions - 1987, $119,828; 1986, $-0-) Increase in restricted assets Increase in prepaid supplies Total Applications of Working Capital Increase (Decrease) in Working Capital Changes in Components of Working Capital Increase (Decrease) in Current Assets Cash and investments Accounts receivable Accrued interest Total Increase (Decrease) in Current Assets Increase (Decrease) in Current Liabilities Accounts payable Customers' meter deposits Accrued expenses Long-term obligations due within one year Total Increase (Decrease) in Current Liabilities Increase (Decrease) in Working Capital Year Ended December 31, 1987 1986 $ 264,916 ( $ 64, 627) 631,667 612,085 17,388 17,388 26,676 8,253 940,647 573,099 1,797 2,650,000 1,511 11,500 3,592,158 586,396 300,000 210,000 27,138 721,843 423,371 2,355,326 50,997 5,704 3,410,011 684,368 $ 182,147 ($ 97,972) $ 303,653 ($225,593) 26,861 42,819 14,301 (6,581) 344,815 (189,355) 16,020 8,137 2,350 4,135 54,298 0,655) 90,000 (100,000) 162,668 (91,383) $ 182,147 ($ 97,972) The accompanying notes are an integral part of these financial statements. -48- 1. 2. CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1987 and 1986 Summary of Significant Accounting Policies a. Fund Accounting: The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restrictions placed on the use of resources available. Resources are classified for accounting and reporting into funds established according to their nature and purposes. The Water and Sewerage Department of the City of Salina is a separate fund of the City which is supported by user charges from its customers rather than by tax monies. The Department uses the accrual method of accounting in the preparation of its financial statements. Revenue is recorded as earned and expenses as incurred. b. Deferred Issuance Costs: Deferred issuance costs are amortized to expense over the term of the related revenue bonds. c. Property, Plant, and Equipment and Depreciation: Property, plant, and equipment are stated at cost. Assets acquired prior to 198]l have been adjusted to reflect cost as determined by a firm of professional appraisers. Depreciation is determined using the straight-line method over the estimated useful life of each asset. d. Investments: Investments are stated at cost which approximates market. Cash and Investments Kansas municipalities, such as the City of Salina, are authorized by Kansas statutes to invest funds in: (1) Temporary notes or no-fund warrants issued by the investing governmental unit, Time deposit, open accounts or certificates of deposit, Time certificates of deposit, Repurchase agreements, and United States Treasury bills or notes with maturities not exceeding six months. (2 ) 0) (4) (5 ) Deposits or investments with qualifying financial institutions are to be secured by a bond or by the pledge of certain types of securities specified by statute. Cash and investments of the City of Salina were 100% insured or collateralized by securities provided by depository financial institutions at December 31, 1987. Cash and investments of the Water and Sewerage Department are pooled with other funds of the City for deposit and investment purposes. Cash and investment balances of the City included petty cash, cash in checking and savings accounts, repurchase agreements and certificates of deposit as of December 31, 1987. -49- 3. Long-Term Obligations Long-term obligations consist of the following: December 31, 1987 1986 Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 (the 1984 Bonds), matures serially each February 15 through 1994, remaining maturities bear interest at rates varying from 8 1/2% to 9 3/4% per annum. $1,760,000 $1,970,000 Combined Water and Sewage System Revenue Bonds, Series of 1987 (the 1987 Bonds), mature serially each October 1 through 2007, maturities bear interest at rates varying from 7% to 9 1/2% per annum. 2,650,000 4,410,000 300,000 1,970,000 210,000 Less amounts due within one year Amounts Due After One Year $4,110,000 §l,760,000 Aggregate maturities of the above obligations in subsequent years are as follows: Year Amount 1988 1989 1990 1991 1992 Thereafter $ 300,000 325,000 355,000 275,000 400,000 2,755,000 Total Bonds Outstanding, December 31, 1987 $4.410,000 The City issued the 1987 Bonds as of October 1, 1987, for the purpose of finan- cing certain improvements to the water and sewerage system. The City issued the 1984 Bonds as of June 15, 1984, for the purpose of refunding its Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978 (the 1978 Bonds). The proceeds of the 1984 Bonds, cash and certain investments were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agreement dated as of June 15, 1984, and were invested in United States Government obligations. The investments and interest earned on such investments will be sufficient to pay all principal and interest on the 1978 Bonds as they become due. The City issued the 1978 Bonds for the purpose of refunding its Combined Water and Sewage System Revenue Bonds of 1961 and 1977. Proceeds of the 1978 Bonds were invested in United States Government obligations deposited with a local bank, pursuant to an escrow trust agreement dated May 1, 1978. Total funds deposited and interest earned on such funds will be sufficient to pay all principal and interest on the 1961 and 1977 bonds as they become due. The final maturity of the 1961 Bonds was retired in 1986. -50- Neither the assets deposited with the escrow agent nor the outstanding 1977 and 1978 obligations totaling $7,215,000 are reflected in the accompanying financial statements as of December 31, 1987. The City has established certain reserve accounts pursuant to the 1984 and 1987 bond ordinances to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Department are pledged to secure payment of the bonds; however, the pledge is subordinate to a similar pledge to secure payment of the 1977 and 1978 bonds. The amounts required to be maintained in the reserve accounts established by the 1984 and 1987 bond ordinances have been provided and the total revenues of the system for 1987 appear sufficient to meet the requirements of the ordinances. 4. Interest Cost A summary of interest cost follows: Interest Expense Year Ended December 31, 1987 1986 $208,459 $181,843 (44,201) $164,258 ill 1 , 843 $ 44,201 $ (29,327) $ 14,874 L - Total interest cost Capitalized interest cost Capitalized interest cost Related interest earned on unexpended bond proceeds whose use is limited Net Interest Cost Capitalized 5. Defined Benefit Pension Plan Substantially all full-time employees of the City of Salina participate in the Kansas Public Employees Retirement System ("System"), a multiple-employer public employees retirement system. The payroll for employees of the Water and Sewerage Department covered by the System for the year ended December 31, 1987 was $1,005,890; the total payroll for the Department was $1,132,385. Substantially all employees of the City of Salina are eligible to participate in the System after one year of employment. Employees who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1 percent of their final average salary for each year of "prior" service and 1.25 to 1.5 percent for each year of "participating" service depending upon the number of years of service. Final average salary is the employee's average salary over the highest four years of credited service. Benefits fully vest on reaching 10 years of service. Vested employees mélY retire at age 55 to 60 with 15 years of credited service and receive reduced retire- ment benefits. Vested employees may retire at age 60 to 65 with 10 or more years of credited service, also at reduced benefits. The systenl also provides death and disability benefits. Benefits are established by State statute. -51- Covered employees are required by State statute to contribute /~% of their salary to the plan. The employer is required by the same statute to contribute the remaining amounts necessary to pay benefits when due. The Water and Sewerage Department's contribution requirement for the year ended December 31, 1987 was $80,005, which consisted of $39,770 from the employer and $40,235 from employees; these contributions represented 3.9% and 4% of covered payroll, respectively. The "penson benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on a going-concern basis and assess progress made in accumulating sufficient assets to pay benefits when due. The System does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligation at June 30, 1986, for the System as a whole, determined through an actuarial valuation performed as of that date, was $3.74 billion. The System's net assets available for benefits on that date were estimated to be $2.91 billion, leaving an unfunded pension benefit obligation estimated at $830 million. Nine-year historical trend information showing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's 1987 comprehensive annual financial report, Page 52, "Solvency Test" table. 6. Commi tments The Department has entered into contractual commitments totaling $1,726,000 to complete certain projects included in construction in process at December 31, 1987. 7. Related Party Transactions The Department reimbursed the City of Salina, Data Processing Fund $54,500 in both 1987 and 1986 for data processing services. 8. Prior Period Adjustments The contributed capital and retained earnings of the Department have been restated as of January 1, 1986, to reflect prior period adjustments as follows: Record accrued interest receivable, not recorded in prior years Record accrued liability for vacation and vested sick leave, not recorded in prior years Adjustment to increase prepaid supplies for a prior period error $ 62,046 019,261) 102,116 Total Prior Period Adjustments $ 44,901 Prepaid supplies have been reclassified to Other Assets as of January 1, 1986. The effect of the above adjustments and reclassification was to decrease working capital by $186,365 as of January 1, 1986. -52-