Audit Report - 2002\...R
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COMPREHENSIVE ANNUAL FINANCIAL REPORT
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of the
SALINA AIRPORT AUTHORITY
A Component Unit of the
City of Salina, Kansas
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For the Fiscal Year Ended December 31, 2002
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Prepared by the Management
of the
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Salina Airport Authority
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SALINAAMport
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SALINA AIRPORT AUTHORITY
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TABLE OF CONTENTS
....................... 44 -45
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COMPREHENSIVE ANNUAL FINANCIAL REPORT
-47
For the Fiscal Year Ended December 31, 2002
.............................48
General Obligation Bonds - Series 1993 -B .........................
.............................49
General Obligation Bonds - Series 1998 -A .........................
Page
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INTRODUCTORY SECTION
.............................51
.............................52
Letterof Transmittal .............................................................. ...........................1
-14
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Principal Officers .................................................................... .............................16
.............................54
.............................55
AuthorityStaff Members ........................................................ .............................17
.............................56
OrganizationalChart ............................................................... .............................18
.............................57
Certificate of Achievement ..................................................... .............................19
Salina Municipal Airport Aerial View .................................... .............................20
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FINANCIAL SECTION
Independent Auditors' Report .............................................. ..........................21 -22
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Financial Statements
Comparative Balance Sheet .............................................. ..........................24
-25
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Comparative Statement of Revenues, Expenses and
Changes in Retained Earnings ........................................ .............................26
Comparative Statement of Cash Flows (Direct Method) .. ..........................27
-28
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Notes to Financial Statements, December 31, 2002 and 2001 ...................29
-41
Supplemental Information
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Schedule of Operations and Changes in Retained Earnings
....................... 44 -45
CapitalExpenditures ......................................................... ..........................46
-47
General Obligation Bonds - Series 1993 -A .........................
.............................48
General Obligation Bonds - Series 1993 -B .........................
.............................49
General Obligation Bonds - Series 1998 -A .........................
.............................50
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General Obligation Refunding Bonds - Series 1999- B ........
General Obligation Improvement Bonds - Series 2001- A ...
.............................51
.............................52
General Obligation Improvement Bonds - Series 2002- A ...
.............................53
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Leasehold Revenue Bonds - Series 1991 .............................
KDOCH Loan Payable ........................................................
.............................54
.............................55
Special Assessment Debt - Street and Utility Improvement ..
.............................56
Insurancein Force ................................................................
.............................57
STATISTICAL SECTION
OperatingRevenue History ..................................................... .............................59
OperatingExpense History ..................................................... .............................60
Federal Financial Assistance History ...................................... .............................61
Capital Expenditure History ................................................... .............................62
RevenueBond Coverage ......................................................... .............................63
PrincipalCustomers ................................................................ .............................64
Local Government Property Tax Rates, Direct & Overlapping ..........................65
PropertyTax Revenue ............................................................. .............................66
Air Traffic, Fuel Flowage, Enplanement Trends .................... .............................67
MajorEmployers .................................................................... .............................68
Saline County Population, Demographic and Labor Statistics ............................69
Saline County Employment Data ........................................... .............................70
OTHER INDEPENDENT AUDITORS' REPORTS
Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards ..............71 -72
INTRODUCTORY SECTION
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On November 16, 2002 at 7:00 a.m., this new $5.2 million Federal Aviation
Administration Air Traffic Control Tower entered service. The new air traffic
control tower rises 96 feet above the Salina Municipal Airport.
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June 18, 2003
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Chairman
Donald E. Morris
Salina Airport Authority Board of Directors
vice - Chairman
3237 Arnold Ave.
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Robert H. Miller
Salina, KS 67401
Secretary
Dr. Randy D. Hassler
To the Board of Directors of the Salina Airport Authority:
Treasurer
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Stephen C. Ryan
The Comprehensive Annual Financial Report (CAFR) of the Salina Airport Authority
Past Chairman
John K. Vanier, it
(the "Authority ") for the fiscal year ended December 31, 2002 is hereby submitted in
accordance with the Kansas Statutes Annotated (K.S.A. 27 -324). As required by the
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Executive Director
statute, the City of Salina will be furnished copies of the Authority's 2002 CAFR.
Timothy F. Roger, A.A.E.
Responsibility for both the accuracy of the data presented and the completeness and
Mgr. of Administration
fairness of the presentation, including all disclosures, rests with the Executive Director
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and Finance
Michelle R. Swanson
of the Authority. To the best of my knowledge and belief, the data as presented is
Mgr. of Operations,
accurate in all material aspects, that it is presented in a manner designed to fairly set
Maintenance and ARFF
forth the fiscal position and results of the operation of the Authority as measured by its
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cha
Ryan E. Rocha
financial activity, and that all disclosures necessary to enable the reader to gain
Board Attorney
Greg A. Bengtson
maximum understanding are included in the report.
ORGANIZATION OF THE REPORT
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The Authority applies the standards for preparation of local government financial reports
recommended by the Government Finance Officers of the United States and Canada
(GFOA). The Authority's 2002 Comprehensive Annual Financial Report is presented in
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four sections:
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Introductory Section - contains this letter of transmittal, a list of the
Authority's principal officers, a listing of Authority staff members, an
organizational chart, the GFOA Certificate of Achievement for
Excellence in Financial Reporting for fiscal year 2001, and an aerial
photo of the Salina Municipal Airport and Airport Industrial Center.
Financial Section - includes the independent Auditors' report, the
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Authority's 2002 financial statements and supplemental schedules.
Statistical Section - includes selected financial and demographic
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information which highlights economic and demographic trends.
Other Independent Auditors' Reports Section - includes a report
concerning the Authority's internal control structure and compliance
with Comptroller General of the United States government auditing
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standards.
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ALINAApi,-4 I NAA
3237 Arnold / Salina, KS 67401 -8190 / 785 - 827 -3914 / Fax: 785 - 827 -2221 / www.salair.org
REPORTING ENTITY
The Salina Airport Authority is a body corporate and politic. The Authority was created by the City
of Salina in April, 1965 (Sec. 4 -16, Salina City Code) pursuant to the authority granted by the City
by the surplus property and public airport authority act of the State of Kansas (K.S.A. 27 -315 et seq.)
The Authority was created for the purpose of accepting as surplus property portions of the former
Schilling A.F.B. which was closed by the United States Department of Defense in June, 1965. By
quitclaim deed the Authority received over 2,700 acres of land and numerous buildings for the
purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial
Center. The Authority is managed and controlled by a five - member Board of Directors appointed
by the Salina City Commission.
The Board appoints the Executive Director, who is the chief executive and administrative officer of
the Authority. The Executive Director hires the remaining employees of the Authority. The
Executive Director and his staff of eleven employees manage and operate the Salina Municipal
Airport and the Salina Airport Industrial Center.
The Salina Municipal Airport is the only commercial service airport serving Salina/Saline County
and the 22 -county area which comprises North Central Kansas. The Airport also services the
corporate, business, private aviation and flight training needs of industry, business and individuals in
the area. The Airport is also used by Kansas State University - Salina College of Technology and
Aviation. The campus of K -State Salina is located adjacent to the airport. The K -State Salina
College of Technology and Aviation offers degrees in professional flight training, airframe and
power plant maintenance, and avionics technology.
The Salina Airport Industrial Center is home for 76 businesses and organizations. Forty-two of the
businesses and organizations are tenants of the Authority. One of the primary functions of the
Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center.
The Authority works in partnership with the City of Salina, Saline County and the Salina Area
Chamber of Commerce for the retention of existing business and industry and the recruitment of
new business and industry.
ECONOMIC CONDITIONS AND OUTLOOK
Local Economy
The Salina/Saline County economy has continued to demonstrate economic strength, as compared to
other regions of the state. Growth in the areas of manufacturing, transportation, finance, real estate,
insurance, services and retail trade, confirm Salina's position as one of Kansas' strongest regional
economic centers.
According to the April 2003 Strength Index report published by K State Research and Extension
Department of Agricultural Economics, Saline County ranked third out of the 105 counties in
"strength index" for 2001 -2002, following only Johnson and Miami counties. The index is a
measure of economic prosperity in Kansas counties, and is made up of three components including
wealth, personal income and employment indices. The three components are given equal weight. In
this report only six of the 105 counties have SI numbers of 3.00 or higher with Saline County
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arriving at 3.16. The state average SI is 2.45. The Bureau of the Census, the Kansas Department of
Revenue, the Kansas Department of Human Resources, and the Kansas Governor's Economic and
Demographic Report, 2002 -2003, provided the source for the strength index data.
Economic Condition of the Airport and Airport Industrial Center
As of December 31, 2002, over 70 businesses and organizations at the Airport Industrial Center
employed an estimated 4,500 employees. Total payroll was an estimated $120 million.
Future Economic Outlook
The future economic outlook for both Salina and the Authority continues to look favorable.
Continued growth in service, retail and manufacturing sectors is expected. The Salina Area
Chamber of Commerce forecasts that approximately 700 new jobs per year will be added to the
economy over the next five years. Airport Industrial Center businesses and organizations such as
Schwan's Food Manufacturing, Inc., Two Rivers Vending, Inc., Salina Vortex Corporation,
Aerospace Systems and Technologies, Inc., Kansas State University - Salina College of Technology
and Aviation, and the Federal Aviation Administration, continue to work on facility expansion
plans. These expansions will result in additional jobs and payroll.
INITIATIVES AND DEVELOPMENT
Salina Municipal Airport
• Air Traffic
The Salina Air Traffic Control Tower traffic count exceeded 95,000 operations for the
first time since 1978. The total of 95,801 operations ranks fourth on the list of most
active years for air traffic. It is very encouraging that the wide variety of operations,
including general aviation, air carrier, military and flight training, continue to keep pace
or increase over prior years. When comparing the traffic counts to other airports in
Kansas, and the nation, the Salina Airport is doing well.
• Aircraft Fuel Sales
With increased air traffic comes more demand for aircraft fuel. The two FBOs on the
field, Midway Aviation and Flower Aviation, along with K -State Salina delivered a total
of 4,695,093 gallons of fuel. This is a record number for fuel delivered on the Airport
and marks the third consecutive year fuel sales have surpassed the 4 million gallon level.
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• Air Service Development
If you can put a positive spin on 2002 Commercial Air Service out of Salina, as with rural
community air service throughout the country, the theme would have to be "The Fight to
Stay Alive ". Late in 2002 Air Midwest abruptly cancelled the late afternoon flight out of
Salina leaving passengers upset and the Airport with only 2 daily flights. Shortly after
the cut in flights, Air Midwest filed their 90 -day Notice to Terminate Service with the
Department of Transportation (DOT). In an effort to retain service, the Mesa Air Group
subsidiary submitted a proposal to the DOT applying for a subsidy to support three daily
flights out of Salina to the Kansas City International Airport. In addition to the Salina
Airport Authority Board, several other local government agencies passed resolutions
supporting the three- nonstop flight option. The Salina area responded very well by
submitting over 60 letters of support for Mesa's proposal to the DOT.
During 2002 the SAA continued to meet with the local air service focus group in addition
to maintaining involvement with the Regional Aviation Partners group to discuss new
ideas for improving air service.
To end the year on a positive note, even though the DOT had yet to negotiate an Essential
Air Service (EAS) subsidy for Mesa, the airline announced it would be adding a third
flight to Salina's schedule effective January 6, 2003.
• FAA Airport Certification Inspection
As required by Federal Aviation Regulation (FAR) Part 139, the FAA Central Region
annually conducts an inspection of the airport. In March, the inspection resulted in only
two minor items of correction. In addition, during 2002, SAA staff published a runway
incursion brochure designed to alert airport users to potential areas where vehicle /aircraft
collisions could occur on the airport. The inspection noted improvements to Aircraft
Rescue and Fire Fighting (ARFF) training that had been made by the SAA staff.
• Emergency Preparedness Table Top Exercise
On December 5, 2002, the SAA conducted the required annual FAR Part 139 emergency
preparedness tabletop exercise. This exercise is in preparation for the full -scale
emergency exercise scheduled for May 2003. The exercise tested participants on
response and communications following an aircraft emergency. Representatives from the
SAA staff, Salina Police Department, Saline County Sheriffs Department, Saline County
Emergency Management, American Red Cross, and the Salina Air Traffic Control Tower
participated in addition to local airport users.
• Airport Tenants Meeting
Quarterly meetings were held with airport users during 2002 to discuss issues such as
upcoming runway construction projects, new air traffic control tower progress and airport
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' activity. This time is also available for airport users to express their concerns and share
ideas about improving the Salina Airport. The informal, around the table get together
during lunch has proved to be an excellent forum for these meetings.
• SAFECON Event
For one week during October, the SAA and Kansas State University Salina hosted a
National Intercollegiate Flying Association SAFECON regional air meet. Over nine
' schools participated and spent the week at the Salina Airport with over 27 aircraft.
' Airfield Maintenance and Improvements
During 2002, SAA staff maintained a vigorous schedule for airfield maintenance, which
' included vegetation control, crack sealing and airfield marking improvements.
1 • Aircraft Rescue and Fire Fighting (ARFF) Services Training and Improvements
The SAA hosted the Mobile Aircraft Firefighting Trainer (MAFT) on April 2, 3, and 4.
' The MAFT is a mobile aircraft simulator that utilizes propane burners for training
firefighters in aircraft firefighting tactics. A total of 51 Firefighters from Salina,
Manhattan, Garden City, Hays, and Dodge City fire departments participated. Feedback
' from the participants was very good. The Salina Airport was the first to host such an
event with the trainer and will again host the event in 2003.
During the first week of every month throughout 2002, the SAA provided Aircraft
Rescue and Fire Fighting training for our seven firefighters as well as personnel from the
Salina Fire Department. The training included fire truck tactics, application of fire
' retardant, and passenger rescue.
The SAA ARFF crew also acquired an Automated External Defibrillator (AED) to allow
' them to respond and provide assistance to a cardiac arrest on the airfield.
• Airport Security
The SAA staff has fully implemented a new Airport Security Program, which is in
compliance with all local, state and federal regulations as mandated by law.
' In early November, the Transportation Security Administration (TSA) assumed all
passenger and baggage security screening functions at the Salina Airport.
• Equipment Acquisition
' The SAA was able to purchase and repair several pieces of equipment during 2002,
which included the purchase of a 1994 and 1996 AGCO tractor, a 1986 dump truck, and a
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new tractor attachment rotary broom. Improvements were made to the airport's forklift,
front -end loader and runway inspection vehicles. The used equipment was acquired by
means of SAA staff screening surplus property and working with used equipment dealers.
By extending the life of existing equipment and the acquisition of the used equipment,
the SAA's maintenance crew is able to efficiently maintain the Airport and Airport
Industrial Center.
Air Traffic Control
Construction on Salina's new Air Traffic Control Tower (ATCT) began in late 2000 by
the M.A. Mortenson Company. Mortenson finished construction in early 2002. FAA
engineers and technicians then began to install the tower's new air traffic control
equipment. The tower features the latest in safety and technology for a FAA air traffic
control tower.
The new state -of -the -art control tower replaces a former U.S. Air Force structure
constructed in 1955. The new tower's control cab is located 96 feet above ground level
and provides air traffic controllers with an improved view of runways, taxiways, and
aircraft parking aprons. The old tower was 65 feet high at the tower cab.
On November 16, 2002, the Federal Aviation Administration's new $5.2 million air
traffic control tower opened for business at the Salina Municipal Airport and efforts of
the SAA that had begun nearly 10 years ago came to fruition.
Also during 2002, the FAA approved the expanded ATCT hours of operation. Airport
tenants and users will benefit from two additional hours of ATCT operation per day. The
expanded hours will extend the closing time from 9:00 p.m. to 11:00 p.m. local time.
With this approval, FAA will also be adding one more controller to the Salina ATCT
staff.
• Rwy 18/36 - New Parallel Runway
During 2002, the SAA completed a feasibility study for a project that was identified in
the SAA's 1991 Airport Master Plan Update. The feasibility study clearly concluded the
time and need for an additional runway at Salina had come. Peak operating hour
statistics indicate that the airport has experienced aircraft operations in excess of 90 per
hour. Annual flight operations have increased to more than 90,000 aircraft takeoffs and
landings; a 50 percent increase since 1996. Salina is a popular fuel stop for pilots flying
cross - country and for military training missions.
The SAA's engineering firm completed the project design and a contract was awarded in
November. The new 4,300 -foot runway, to be designated 18/36, is scheduled to be
complete by July 2003. It will be utilized primarily for flight training, relieving current
congestion on the Salina Airport's primary runway. Professional flight students attending
the Kansas State University- Salina College of Technology & Aviation will benefit from
having a traffic pattern separate from corporate jet and military training flights. Other
airport users such as flight operations departments at Wichita's major aircraft
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manufacturers will also benefit from the parallel runway construction when conducting
production test flights at Salina.
• Federal Aviation Administration Airport Improvement Program Projects
Throughout the year, the SAA staff was busy working on two Airport Improvement
Program Projects (AIP). All projects are funded by FAA grants.
AIP 20- Primary Runway Rehabilitation Design and Snow Removal Equipment
Acquisition
In 2002 the SAA awarded an engineering contract for the design of the rehabilitation of
the airport's primary runway. The project design including the complete rehabilitation of
12,300 feet of runway, the micro-surfacing of all adjoining taxiways and a new electrical
system, progressed significantly during 2002 and is expected to reach final design by
early 2003. The airport improvement planning work anticipated having the parallel
runway open for traffic prior to the close down of the airport's primary runway for
rehabilitation.
During 2002 the SAA staff prepared the specifications for the procurement of two new
' snowplows and awarded the contract. The snowplow acquisition is also part of AIP 20.
The vehicles were delivered on January 15, 2003.
• AIP 21- Airport Layout Plan Update
' At the end of 2002, the SAA's Airport Layout Plan (ALP) update project neared
completion. The SAA's latest airport layout plan was updated in 1997 and with the
construction of a new parallel runway and the rehabilitation of the primary runway; the
need for the update was essential. The ALP consists of a series of documents used in all
aspects of airport planning in addition to airspace protection.
I• Pumphouse 305 Improvements
' The SAA made over $19,000 in improvements to the airport's fuel farm. The
improvements included new input/output fuel flowage meters, low voltage relays for the
emergency shutoff controls, and new emergency shutoff valves for the fuel dispensers
' and surge protection for the leak detection equipment. All tanks are in compliance with
the Kansas Department of Health and Environment requirements.
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Salina Airport Industrial Center
0 Land/Facility Sales
On May 1, 2002, the SAA closed on the sale of Lot la, Block 1 of the Airport Industrial
Center Subdivision to Schwan's Sales Enterprises, Inc. The 4.93 -acre tract resulted in
$89,385 in net proceeds to the SAA. Schwan's has completed the construction of a new
depot for their home delivery service at the site, which is located between the new
Ovation Cabinetry facility and the Federal Express Distribution Center.
• Facility Improvement Projects
In the fall of 2001, the SAA issued $1,385,000 in Facility Improvement General
Obligation Bonds to fund improvements to over eight facilities within the Airport and
Airport Industrial Center. In addition, the scope of the project included the demolition of
six former United States Air Force structures that no longer served a purpose within the
industrial complex. During 2002, work progressed on all of the projects and by the end
of the year, six of the building renovations were completed with three having new tenants
occupying the properties and generating additional revenue for the SAA. Two of the
projects were for existing leasehold improvements and new lease agreements were
executed in consideration of the renovations. The building demolition projects were at
80% completion by the end of the year.
• Long -Term Airport Industrial Center Development
During the first part of 2002, the SAA completed the preliminary platting of 80 acres of
undeveloped land owned by the SAA and located to the south of the existing Airport
Industrial Center Subdivision. This step was important because of the rapid growth of
the existing subdivision to the north and to ensure available development property as the
complex continues to grow. In addition, the SAA began work on a development plan for
property located to the southwest of the Airport. With both expansion tracts, it is
estimated the growth of the Airport and Industrial Center can continue on pace 10 -20
years into the future.
Financial Affairs
• FAA Airport Improvement Program Grants (AIP)
During 2002, the SAA received two Airport Improvement Program Grant offers from the
Federal Aviation Administration. These grants will fund the acquisition of snow removal
equipment, the design of the rehabilitation of the airport's primary runway and the update
to the airport's layout plan. Combined, the two grant offers were $588,359.
' SALINAAirport
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' • DBE Program
' In March, 2002, the SAA established a Disadvantaged Business Enterprise (DBE)
program in accordance with regulations of the U.S. Department of Transportation (DOT),
49 CFR Part 26. The DBE program sets goals and methodology for including qualified
' socially and economically disadvantaged businesses in upcoming airport improvement
projects that will be funded by FAA grant funds.
• Cafeteria Benefits Plan Program Manual
' Early 2002 marked the completion of the SAA's Cafeteria Benefits Plan Summary Plan
Description. This document provides SAA employees with the necessary information
regarding eligibility, operation, contributions and benefits for participating in the IRS 125
' program that allows eligible employees the ability to pay certain health and dependent
care expenses with pre -tax dollars resulting in a direct savings for both the employee and
the SAA.
• 2002 - Series A Bond Issue
1 On August 21, 2002, the SAA sold $2,635,000 in General Obligation Bonds to fund the
design and construction of the airport's new 4,300 ft. parallel runway and provide FAA
' grant matching funds for the airports $5.6 million primary runway rehabilitation project.
The SAA received an unprecedented 12 bids on the bond issue with the low bid at 3.27 %,
a favorable rate considerably under budget.
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• Moody's Rating Upheld
' In conjunction with the above bond issue, Moody's Investor Service issued an Al rating
to the newly issued bonds and affirmed the Al rating on the existing debt of the SAA. A
Moody's rating represents Moody's opinion about the debt service repayment capacity of
a government entity.
' • Comprehensive Marketing Communication Plan for the Runway Improvement
Program
' The SAA worked to develop and implement a Comprehensive Marketing
Communication Plan for the upcoming runway improvement projects. The goal of the
program is to communicate to specifically targeted constituent audiences through
developed messages to comprehensively and efficiently communicate the planned airport
improvements. The plan will include a minimum of 14 news releases over the duration
' of the projects in addition to utilizing other methods of communication including limited
cooperative advertising, posters, web postings, direct mail and e-mail. By the end of
2002, the SAA had compiled over 6 groups of constituents equaling over 80 members
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representing aviation media, Salina and North Central Kansas media, Wichita media,
airport users and airport development contacts. This list will continue to grow throughout
2003 as work continues to insure all of the appropriate constituents receive timely and
thorough information during the runway improvement projects.
• Marketing Available Buildings and Land
Throughout 2002, the SAA utilized several resources in marketing available land and
buildings including advertising in business journals and local newspapers, promoting
through photos and data sheets available over the internet, running radio ads, utilizing
direct mail through the Chamber of Commerce and presenting to community
organizations.
• Auditor Procurement
In early fall, the SAA developed and sent out a solicitation requesting proposals from
local accounting firms to audit the SAA's December 31, 2002 financial statements. The
RFP included the scope of work to be performed, auditing standards to be followed,
reports to be issued and critical timeline elements. In November, the SAA approved a
proposal and began work on the negations of an audit contract with the successful firm.
Environmental
• During the month of August 2002, the U.S. Army Corps of Engineers, Kansas City
district office completed a geophysical anomaly investigation in the former storage area
used by the United States Air Force (USAF) prior to the closing of the Schilling Air
Force Base in 1965. The purpose of the field work was to further investigate the
possibility of the existence of USAF low -level radiological disposal vaults.
No evidence of disposal sites were found and no elevated radionuclide levels were
encountered in any of the areas investigated according to the Corps October, 2002 report.
The Corps of Engineers continued to work on a new work plan for additional sampling
efforts at the former Schilling Air Force Base. The focus of the sampling and data
collection effort is to better identify the extent of groundwater contamination and define
the Corps of Engineers remedial alternatives.
The Corps of Engineers would do actual fieldwork during calendar year 2003.
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' INTERNAL CONTROL STRUCTURE AND BUDGETARY CONTROLS
The Authority follows generally accepted accounting principles applicable to governmental unit
enterprise funds. Accordingly, the financial statements are prepared on the accrual basis.
Management of the Authority is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the Authority are protected from loss, theft, or misuse
and to ensure that adequate accounting data is compiled to allow for the preparation of financial
statements in conformity with generally accepted accounting principles. The internal control
' structure is designed to provide reasonable, but not absolute, assurance that these objectives are met.
The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the
benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and
' judgments by management.
An annual budget is prepared in accordance with the Authority's By -laws. However, the Authority
is specifically exempt from the budget laws of the State of Kansas (K.S.A. 27 -322) and the
Authority is not required to demonstrate statutory compliance with its annual operating budget.
Accordingly, budgetary data is not included in the accompanying financial statements.
RESULTS OF OPERATIONS
' Revenues
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The operating revenues of the Authority decreased 7.02% from the previous year. A significant
portion of the decrease can be attributed to the industrial building renovations as discussed above.
During renovations, four of the facilities could not be occupied, however, by the end of 2002, two of
the facilities had new tenants. In addition, the gain on sale of assets decreased by 66% in 2002
following the heels of a year in which we sold four tracts of ground totaling over 10 acres. Fuel
flowage fees increased over ten percent as a result of the increase in total fuel delivered at the airport
over the prior year.
A summary of operating revenues follows:
Operating Revenues
Rental revenues
Fuel Flowage Fees
Landing fees
Gain (loss) on sale of assets
Other operating revenues
Total
2002 2001
$1,034,989
$1,111,662
278,948
252,942
4,514
7,250
29,455
86,719
39,173
33,162
$1,387,079 $1,491,735
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Increase
(Decrease)
From 2001
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($76,673)
$26,006
($2,736)
($57,264)
$6,011
($104,656)
Percentage
Change
-6.90%
10.28%
- 37.74%
- 66.03%
18.13%
-7.02%
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Expenses
Total operating expenses before depreciation decreased 1.66 %. Office and administrative expenses
decreased .30% due to decreases in airport promotion, computer /network administration, office
supplies, postage, property appraisals, property taxes, travel and meetings and other administrative
expenses. Maintenance expenses decreased 3.94% due to decreases in airfield maintenance, airport
security, equipment, gas oil & repairs, maintenance salaries, and other maintenance expenses. A
significant portion of the decrease in maintenance expenses was a result of the reduction in terminal
building custodial staff and reduced maintenance crew overtime.
A summary of operating expenses follows:
Operating Expenses
Office and Administration
Maintenance
Total
DEBT ADMINISTRATION
Increase
(Decrease)
2002 2001 From 2001
$751,734
$754,003
($2,269)
430,530
448,189
($17,659)
$1,182,264
$1,202,192
$19,928
Percentage
Change
-0.30%
-3.94%
-1.66%
The outstanding long -term debt of the Authority was $8,282,183 at December 31, 2002. This debt
consists of general obligation bonds, leasehold revenue bonds, a HUD Community Development
Block Grant loan and City of Salina special assessments. Maturities range from 2003 through 2016.
Both principal and interest are payable from proceeds of a direct financing lease and the general
revenues of the Authority. Details are shown in Note III (E): Long -Term Liabilities.
CASH MANAGEMENT
All cash temporarily idle during 2002 was invested by the Executive Director of the Authority in
short-term investments to attain the highest possible return consistent with the Authority's liquidity
needs. All investments are in compliance with K.S.A. 12 -1675 which controls the investment of
public funds by Kansas governmental units.
RISK MANAGEMENT
The Authority is exposed to risks of loss associated with the operation of a public use airport and the
operation of an airport industrial center. To handle the associated risks of loss, the Authority uses
available tort liability legislation and purchases the appropriate types of insurance coverage. It is the
policy of the Authority to eliminate or transfer risk of loss where possible.
The Kansas Tort Claims Act (K.S.A. 75 -6101 et seq.) generally limits tort liability for Kansas
governmental entities. The maximum liability for claims as specified by the Act is $500,000 for any
12
QLA r` Curt SALINAAirport SALINAA7
0
number of claims arising out of a single occurrence or accident. For wrongful acts, Kansas
governmental entities or their employees are exempted from liability.
The Authority carries $500,000 of comprehensive general liability insurance which matches the
limit established by the Kansas Tort Claims Act. During 2002 the Authority carried $8,360,232 of
insurance on airport commercial properties.
The Authority's commercial property insurance included $1,198,602 in loss of rents coverage. All
contractors and lessees are required to carry amounts of property insurance with limits and
deductibles approved by the Authority. A schedule of insurance in force at December 31, 2002 is
included in this report.
In addition, the Authority uses various risk management techniques. All contracts and leases are
reviewed by the Authority's legal counsel. All contractors and subcontractors are required to submit
evidence of insurance coverage naming the Salina Airport Authority and the City of Salina as named
additional insured.
' INDEPENDENT AUDIT
Pursuant to K.S.A. 27 -324, an audit of the books, accounts and financial statements has been
' completed by the Authority's independent certified public accountants, Clubine and Rettele,
Chartered. The independent audit is in accordance with the Kansas Municipal Audit Guide and the
Government Auditing Standards issued by the Comptroller General of the United States.
' GFOA CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
' Certificate of Achievement for Excellence in Financial Reporting to the Salina Airport Authority for
its comprehensive annual financial report (CAFR) for the fiscal year ended December 31, 2001.
This was the tenth consecutive year that the Salina Airport Authority has achieved this prestigious
' award. In order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report (CAFR). This
report must satisfy both generally accepted accounting principles and applicable legal requirements.
' A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
' MILL LEVY
As provided for in the Authority's Enabling Statue (K. -S.A. 27 -315 et seq.), the Authority is able to
use a property tax mill levy to fund matching funds for federal grants or general obligation bond
' debt service. During 2002, with the consent of the Salina City Commission, the Authority adopted a
2.806 mill levy in order to provide matching funds for Federal Aviation Administration Airport
' 13
SALINAAirport
' S N� Ai rt ���� SALI�NA A�
Improvement Program grant funds and to provide debt service funds for the Authority's Series 1998 -
A and 2002 -A general obligation improvement bonds and airfield improvements.
Of the total 2.806 levy, 1.039 mills are for Federal Aviation Administration Airport Improvement
Program matching funds, airfield improvements and 2002 -A general obligation debt service, which
will generate an estimated $327,735 in calendar year 2003. The remaining 1.767 mills are for debt
service related to the 1998 -A series general obligation bonds and will provide the Authority an
estimated $557,375 in calendar year 2003.
ACKNOWLEDGEMENTS
The support of the Authority's Board of Directors has been instrumental in the preparation of this
report. The Board has been actively involved in the preparation and review of this report and is
committed to responsible and progressive financial reporting.
Also acknowledged is the assistance of the Authority's auditor, Clubine and Rettele, Chartered, the
Authority's accounting advisors, Harrison & Arnett, Chartered, Saline County Clerk's Office, Gerald
Cook, President of the Salina Area Chamber of Commerce, Rod Franz, Director of Finance for the
City of Salina, former Salina Airport Authority Board of Directors Chariman, R. Michael Beatty, the
University of Kansas Institute for Public Policy and Business Research and the Kansas Department
of Human Resources Labor Market Information Services, in the preparation of this report.
Respectfully submitted,
2Timothy F. ogers, A.E.
Executive Director
Salina Airport Authority
M/ i M/ , / My
Michelle R. Swanson
Manager of Administration and Finance
Salina Airport Authority
cc: The City of Salina Board of Commissioners
14
SA LINA A irport
NA
5 irport
FINANCIAL SECTION
A 66,000 square foot manufacturing facility stands ready for a new tenant.
During 2002, the SAA completed significant renovations to the building.
The project was financed with the proceeds of the SANS General
Obligation Improvement Bonds, Series 2001 -A.
7
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15
SALINA AIRPORT •-
BOARD OF DIRECTORS
John K. Vanier, II
Chairman
Donald E. Morris
Vice Chairman
Robert H. Miller
Secretary
Dr. Randy D. Hassler
Treasurer
Pat Bolen
Asst. Secretary/Treasurer
AUTHORITY'S COUNSEL
Greg A. Bengtson
Clark, Mize & Linville, Chartered
Salina, Kansas
--
AUTHORITY'S BOND COUNSEL
Gilmore & Bell
Kansas City, Missouri
AUTHORITY'S FINANCIAL ADVISOR
George K. Baum & Company
Kansas City, Missouri
AUTHORITY'S AUDITOR
Leslie M. Corbett, C.P.A.
Clubine & Rettele, Chartered
Salina, Kansas
16
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SALINA AIRPORT AUTHORITY
ADMINISTRATION STAFF
Timothy F. Rogers, A.A.E.
Executive Director
Ryan E. Rocha
Manager of Operations, Maintenance & ARFF
Michelle R. Swanson
Manager of Administration & Finance
Donald C. Kneubuhl
Manager of Special Projects
Cathy Lentz
Administrative Assistant
OPERATIONS, MAINTENANCE, AIRCRAFT RESCUE & FIRE FIGHTING STAFF
Loren Carleton
Operations, Maintenance & ARFF
Kim Colby
Operations, Maintenance & ARFF
Gary Hansen
Operations, Maintenance & ARFF
Dale Mattison
Operations, Maintenance & ARFF
David Nease
Operations, Maintenance & ARFF
Rob Pejsha
Operations, Maintenance & ARFF
Jason Pinnick
Operations, Maintenance & ARFF
17
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Salina Airport Authority,
Kansas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2001
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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Independent Auditors' Report
Flower Aviation refuels a coprorate jet using the Salina Municipal Airport
as a mid - continent fuel stop. During 2002, over 4.7 million gallons of
aviation fuel was delivered to a wide variety of aircraft at Salina.
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Robert I. Clubine, C.P.A.
David A. Rettele, C.P.A.
Jay D. Langley, C.P.A.
Jon K. Bell, C.P.A.
Leslie M. Corbett, C.P.A.
Stacy J. Osner, C.P.A.
Marci K. Fox, C.P.A.
Delores K. Longenecker, C.P
Linda A. Suelter, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Salina Airport Authority
We have audited the accompanying general purpose financial statements of Salina
Airport Authority, a component unit of the City of Salina, Kansas, as of and for the
year ended December 31, 2002, as listed in the table of contents. These general
purpose financial statements are the responsibility of Salina Airport Authority,
management. Our responsibility is to express an opinion on these general purpose
financial statements based on our audit. The financial statements of Salina Airport
Authority as of December 31, 2001, were audited by other auditors whose report
dated May 15, 2002, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States and the Kansas Municipal Audit Guide, prescribed by the
Director of Accounts and Reports, Department of Administration of the State of
Kansas. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the general purpose financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the general purpose financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
general purpose financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present
fairly, in all material respects, the financial position of Salina Airport Authority, as
of December 31, 2002, and the results of its operations and the cash flows of its
proprietary fund types for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated May 7, 2003, on our consideration of Salina Airport Authority's internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was performed for the purpose of forming an opinion on the general
purpose of financial statements taken as a whole. The accompanying schedules and
additional information listed in the supplemental information of the Financial
21
218 South Santa Fe
'
P.O. Box 2267
Salina, Kansas
67402 -2267
Salina
785 / 825 -5479
'
Salina Fax
785 / 825 -2446
'
Ellsworth
785 / 472 -3915
Ellsworth Fax
785 / 472 -5478
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Salina Airport Authority
We have audited the accompanying general purpose financial statements of Salina
Airport Authority, a component unit of the City of Salina, Kansas, as of and for the
year ended December 31, 2002, as listed in the table of contents. These general
purpose financial statements are the responsibility of Salina Airport Authority,
management. Our responsibility is to express an opinion on these general purpose
financial statements based on our audit. The financial statements of Salina Airport
Authority as of December 31, 2001, were audited by other auditors whose report
dated May 15, 2002, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States and the Kansas Municipal Audit Guide, prescribed by the
Director of Accounts and Reports, Department of Administration of the State of
Kansas. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the general purpose financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the general purpose financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
general purpose financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present
fairly, in all material respects, the financial position of Salina Airport Authority, as
of December 31, 2002, and the results of its operations and the cash flows of its
proprietary fund types for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated May 7, 2003, on our consideration of Salina Airport Authority's internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.
Our audit was performed for the purpose of forming an opinion on the general
purpose of financial statements taken as a whole. The accompanying schedules and
additional information listed in the supplemental information of the Financial
21
Section and the Statistical Section of the table of contents are presented for purposes of additional analysis and
are not a required part of the general purpose financial statements. Such information, except for the Statistical
Section as listed in the table of contents on which we express no opinion, has been subjected to the auditing
procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a whole. --
May 7, 2003
CLUBWE AND RETTELE, CHARTERED
22
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Financial Statements
Oairbp
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Midway Aviation fuel trucks stand ready to deliver fuel. Midway Aviation
is a contract provider of fuel for government and military aircraft.
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23
SALINA AIRPORT AUTHORITY
COMPARATIVE BALANCE SHEETS
ASSETS
CURRENT ASSETS:
Cash
Accounts receivable
Prepaid expenses
Taxes receivable
Total Current Assets
RESTRICTED ASSETS:
Cash and cash equivalents
NET INVESTMENT IN FINANCING LEASE
NET INVESTMENT IN CAPITAL ASSETS
OTHER ASSETS:
Bond issue costs, less accumulated amortization
of $124,449 and $104,597 respectively
TOTAL ASSETS
December 31
2002
2001
$ 3,386,102
$ 1,877,628
80,591
97,949
4,315
4,804
977,990
750,398
4,448,998
2,730,779
85,000
85,000
1,050,764
1,126,305
23,700,563
22,559,358
117,048 110,782
$29,402,373 $26,612,224
(continued)
See notes to financial statements.
24
SALINA AIRPORT AUTHORITY
COMPARATIVE BALANCE SHEETS
(continued)
LIABILITIES AND EQUITY December 31
2002 2001
CURRENT LIABILITIES:
Accounts payable- operations
$ 17,168
$ 17,907
Accounts payable - capital purchases
69,467
34,479
Accrued payroll and expenses
21,700
20,517
Accrued property tax
51 ,187
68,145
Accrued special assesments
25,047
-
Deferred tax revenue
977,990
750,398
Deferred maintenance agreement
5,176
37,092
Deferred rent
31,277
15,110
Accrued interest payable
105,752
79,401
Deferred interest - financing lease
56,953
59,889
Current maturities of long -term debt
1,046,750
680,966
Total Current Liabilities
2,408,467
1,763,904
LONG -TERM LIABILITIES:
Bonds and note payable, less current maturities
7,235,433
5,110,622
Total Liabilities
9,643,900
6,874,526
EQUITY:
Net contributed capital, Federal Grants
8,488,854
8,927,372
Retained earnings
11,269,619
10,810,326
Total Equity
19,758,473
19,737,698
TOTAL LIABILITIES AND EQUITY
$29,402,373
$26,612,224
See notes to financial statements.
25
SALINA AIRPORT AUTHORITY
COMPARATIVE STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
NON - OPERATING REVENUE (EXPENSE):
Mill levy 817,499 795,404
Interest on investments and financing lease 147,763 145,447
Interest expense (319,167) (249,959)
Net Non - Operating Income 646,095 690,892
NET INCOME (LOSS) (123,230) 46,165
ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH
FEDERAL CONTRIBUTIONS 582,523 583,135
INCREASE (DECREASE) IN RETAINED EARNINGS 459,293 629,300
RETAINED EARNINGS, January 1 10,810,326 10,181,026
RETAINED EARNINGS, December 31 $11,269,619 $10,810,326
See notes to financial statements.
26
January 1 to December 31
2002
2001
OPERATING REVENUES:
Rental revenues
$ 1,034,989
$ 1,111,662
Fuel flowage fees
278,948
252,942
Gain on sale of assets
29,455
86,719
Landing fees
4,514
7,250
Other operating revenues
39,173
33,162
Total Operating Revenues
1,387,079
1,491,735
OPERATING EXPENSES BEFORE DEPRECIATION
Office and administration
751,734
754,003
Maintenance
430,530
448,189
Total Operating Expenses Before Depreciation
1,182,264
1,202,192
OPERATING INCOME BEFORE DEPRECIATION
204,815
289,543
DEPRECIATION EXPENSE
974,140
934,270
OPERATING LOSS
(769,325)
(644,727)
NON - OPERATING REVENUE (EXPENSE):
Mill levy 817,499 795,404
Interest on investments and financing lease 147,763 145,447
Interest expense (319,167) (249,959)
Net Non - Operating Income 646,095 690,892
NET INCOME (LOSS) (123,230) 46,165
ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH
FEDERAL CONTRIBUTIONS 582,523 583,135
INCREASE (DECREASE) IN RETAINED EARNINGS 459,293 629,300
RETAINED EARNINGS, January 1 10,810,326 10,181,026
RETAINED EARNINGS, December 31 $11,269,619 $10,810,326
See notes to financial statements.
26
1
1
1
1
1
1
� I
SALINA AIRPORT AUTHORITY
COMPARATIVE STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
January 1 to December 31
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from sales, commissions, fees and rents $ 1,503,652 $ 1,668,782
Cash paid to employees for services (450,013) (463,501)
Cash paid to suppliers for goods and services (748,272) (750,913)
Net Cash Provided (Used) in Operating Activities
305,367 454,368
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of property, plant and equipment
(2,176,229)
Purchases in satisfaction of direct finance lease agreement
(19,095)
Proceeds from capital grants
144,005
Proceeds from property tax
817,499
Principal payments on debt
(694,761)
Proceeds of new borrowing
3,200,235
Principal received on financing lease
75,541
Interest received on financing lease
113,905
Bond issue costs paid
(26,119)
Interest paid on long -term debt
(262,795)
Net Cash Provided (Used) in Capital and Related
Financing Activities 1,172,186
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on deposits 30,921
INCREASE (DECREASE) IN CASH 1,508,474
CASH BALANCE - January 1
1,962,628
CASH BALANCE - December 31
$ 3,471,102
CASH AT END OF YEAR
CONSISTS OF:
Unrestricted cash
$ 3,386,102
Restricted cash
85,000
$ 3,471,102
(continued)
See notes to financial statements.
27
(571,068)
795,403
(674,963)
1,385,000
69,668
1 19,778
(21,266)
(221,762)
::1 '1
30,740
1,365,898
596,730
$ 1,962,628
$ 1,877,628
85,000
$ 1,962,628
SALINA AIRPORT AUTHORITY
COMPARATIVE STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
(continued)
RECONCILIATION OF OPERATING LOSS TO NET
CASH FLOWS FROM OPERATING ACTIVITIES
OPERATING LOSS
ADJUSTMENTS RECONCILING OPERATING LOSS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation
Basis of assets sold
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable - operations
Increase (decrease) in accrued payroll expenses
Decrease (increase) in prepaid expense
Increase (decrease) in accrued property tax
Increase (decrease) in deferred rent
NET CASH PROVIDED BY OPERATING ACTIVITIES
Jan u= 1 to December 31
2042 2001
$(769,325) $(644,727)
974,140
83,048
17,358
(735)
1,183
489
(16,958)
16,167
$ 305,367
934,270
169,194
28,253
(5,914)
(10,033)
(4,302)
8,027
(20,400)
$ 454,368
PRINCIPAL AND INTEREST PAID
The Authority has exercised the option provided by the collecting agency to pay the principal
and interest on its special assessment debt for 2002 in two equal payments. The deferred amount
$25,047 consists of $10,168 interest and $14,879 principal.
See notes to financial statements.
28
ISalina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
' The Salina Airport Authority was established by the City of Salina, pursuant to Chapter 27, Article 3,
of the Kansas Statutes Annotated for the purpose of acquiring surplus federal government property,
1 specifically the Schilling Air Force Base, located near the City of Salina. The Authority administers
the airport commercial development and rental of associated real estate. The Authority is controlled
by a five- member Board of Directors appointed by the Salina City Commission and, in accordance
with Governmental Accounting Standards Board (GASB) Statement No. 14, the Authority is
considered to be a component unit of the City of Salina. The Authority is discreetly presented in the
City's comprehensive annual financial reports.
' B. Measurement Focus, Basis of Accounting and Basis of Presentation
The Authority consists of an enterprise fund. Enterprise funds are classified as proprietary funds by
' the GASB and are accounted for using a total economic resource measurement focus. The enterprise
fund is used to account for operations that are financed and operated in a matter similar to private
business enterprises. The intent of the Authority is that the costs of providing services on a continuing
basis be recovered through user fees and rents. The financial statements are prepared on the accrual
basis of accounting. Under the accrual basis, revenues are recognized as earned and expenses as
incurred. It is the Authority's policy to follow all Financial Accounting Standards Board (FASB)
standards issued after November 30, 1989, for its proprietary activities unless those new FASB
pronouncements conflict with GASB guidance.
' C. Assets, Liabilities and Equity
1. Cash and Investments
The Authority's cash and cash equivalents are considered to be cash on hand, demand deposits and
short-term investments with original maturities of three months or less from date of acquisition. The
' Authority held no investments during these years.
2. Receivables
Accounts Receivable. The Authority records revenues when services are provided. All receivables
are shown net of an allowance for uncollectibles.
Property taxes receivable. The determination of assessed valuations and the collections of property
taxes for all political subdivisions in the State of Kansas is the responsibility of the various counties.
The office of the County Appraiser annually determines assessed valuations and the County Clerk
spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all
taxing entities within the county. In accordance with state statutes, property taxes are levied
' November 1 of the current year and are a revenue source to be used to finance the budget of the
1 29
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002, and 2001
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued
C. Assets, Liabilities and Equity — continued
2. Receivables - continued
ensuing year. One -half of the property taxes are due December 20, prior to the fiscal year for which
they are budgeted, and the second half is due the following June 20.
Collection of current year property tax by the County Treasurer is not completed, apportioned nor
distributed to the various subdivisions until the succeeding year, such procedure being in conformity
with governing state statutes. Consequently, current year property taxes receivable are not available as
a resource that can be used to finance the current year operations of the Authority. It is the Authority's
practice to record uncollected current year property tax as an account receivable and to record the same
amount as deferred revenue. It is not practicable to apportion delinquent taxes held by the County
Treasurer and, further, the amounts thereof are not material in relationship to the financial statements
taken as a whole.
3. Inventories
The Authority maintains no significant inventory of office and maintenance supplies. These items are
expensed as purchased and no inventory is recorded in these financial statements.
4. Prepaid items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items.
5. Restricted Assets
Certain proceeds of leasehold revenue bonds are classified as restricted assets on the balance sheet
because their use is limited by applicable bond covenants.
6. Fixed Assets
Fixed assets purchased or constructed are recorded at cost. The cost of normal maintenance and
repairs that do not add to the value of the assets or materially extend assets' lives are not included in
fixed assets cost. Fixed assets donated to the Authority are recorded at their estimated fair value at the
date of donation. Donated assets include property and equipment transferred to the Authority from the
United States of America, September 9, 1966 and recorded at fair value at that date.
30
ISalina Airport Authority
t NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
C. Assets, Liabilities and Equity — continued
' 6. Fixed Assets - continued
' Fixed assets are depreciated using the straight -line method over the following estimated useful lives:
Assets Years
' Buildings 5-50
Equipment 5-10
Vehicles 7-10
' Airfield 10-30
Depreciation applicable to certain property and equipment which have been funded by or contributed
to the Authority by the federal government, is charged against the respective capital grant equity
balance. This charge is effected by transferring the applicable depreciation from retained earnings and
has no effect on income.
' 7. Compensated Absences
Substantially all full -time employees receive compensation for vacations, holidays, illness and certain
' other qualifying absences. The number of days compensated for various categories of absence is
generally based on length of service. Liabilities relating to these absences are recognized as incurred
and included in accrued expenses. The amount accrued for such liabilities at December 31, 2002 and
' 2001 was $16,123 and $14,591 respectively.
H. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
' The Authority is specifically exempt from Kansas Budget Law. The Authority is not required to
demonstrate statutory compliance with its annual operating budget. Accordingly, budgetary data is not
included in the financial statements.
B. Compliance With Bond Reserve Requirements
The Leasehold Revenue Bonds Series 1991 proceeds were used to construct a building that is leased to
a state university. The lease is a financing lease that transfers ownership of the building at the end of
the lease. The bond agreement established an $85,000 reserve requirement which the Authority has
' met.
1 31
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
III. DETAILED NOTES
A. Deposits
The bank balance as of December 31, 2002 and 2001 were entirely insured or collateralized with
securities held by third party banks in the Authority's name.
At December 31, 2002 and 2001, the carrying amount of the deposits were $3,470,437 and $1,962,578
plus $665 and $50 cash on hand respectively, and the bank balance was $3,639,134 and $1,998,515
respectively. The difference between the carrying amount and the bank balance is outstanding checks.
Of the bank balance, $320,537 and $200,000 respectively was covered by federal deposit insurance
and the remaining $3,318,597 at December 31, 2002 was collateralized by pledged securities held
under joint custody receipts issued by a third -party bank in the Authority's name. The third -party bank
holding the pledged securities is independent of the pledging bank. The pledged securities are held
under a tri-party custodial agreement signed by all three parties: the Authority, the pledging bank, and
the independent third -party bank holding the pledged securities.
SALINA AIRPORT AUTHORITY
COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY
Gross Cash Balances
Cash in checking
Cash in savings
Add uncleared checks
Bank Balance
Less FDIC Coverage
Balances Securable by Collateral
Security Required
(100 %)
Security Provided by Depositories
Amount Under - secured by Statute
December 31, 2002
UMB-
National Bank Sunflower
of America Bank Total
32
$ 47,022 $ 104,423 $ 151,445
20,537 3,298,455 3,318,992
130,059 38,638 168,697
197,618 3,441,516 3,639,134
120,537 200,000 320,537
77,081 JLaI8 597
$ 77,081 $3,241,516 $3,318,597
86,372 3,727,134 3,813,506
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
III. DETAILED NOTES - continued
B. Receivables
Receivables as of year -end, including the applicable allowance for uncollectible accounts, are as
follows:
Activity in net investment in financing leases was as follows:
Year Ended December 31
2002 2001
Beginning Balance $1,126,305 $1,195,973
Less: Collected principal 75,541 69,668
Ending Balance IU26 305
33
December 31
2002
2001
Receivables:
Accounts
$ 82,341
$100,394
Less: allowance for uncollectibles
(1,750
(2,445)
80,591
97,949
Taxes
977,990
750,398
Total
1 058 581
848 347
C. Net Investment in Financing Lease
Net investment in financing lease is as follows:
December 31
2002
2001
Total lease payments receivable
$1,705,014
$1,894,460
Less: Unearned income
654,250
768,155
Net investment in financing leases
JLU6 305
Activity in net investment in financing leases was as follows:
Year Ended December 31
2002 2001
Beginning Balance $1,126,305 $1,195,973
Less: Collected principal 75,541 69,668
Ending Balance IU26 305
33
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
III. DETAILED NOTES - continued
D. Fixed Assets
The following is a summary of the changes in the general fixed assets account group during the current
year.
Land
Buildings and improvements
Airfield and improvements
Equipment
Construction in progress
Balance
Balance
January 1,
December 31,
2001
Additions
Dispositions
2002
$ 8,464,938
$ 616,474
$ 46,262
$ 9,035,150
6,798,672
1,067,221
51,602
7,814,291
17,109,402
9,385
-
17,118,787
1,513,709
125,318
30,615
1,608,412
-
392,816
-
392,816
33,886,721
2,211,214
128,479
35,969,456
Less: Accumulated
depreciation 11,327,363 974,140 32,610 12,268,893
Total $ 22,559,358 $ 1,237,074 $ 95,869 $ 23,700,563
The following is a summary of proprietary fund -type fixed assets at December 31, 2002 and 2001:
December 31
2002 2001
Land $ 9,035,150 $ 8,464,938
Buildings and improvements 7,814,291 6,798,672
Airfield and improvements 17,118,787 17,109,402
Equipment 1,608,412 1,513,709
Construction in progress 392,816 -
35,969,456 33,886,722
Less: Accumulated
depreciation 12,268,893 11,327,363
Net Fixed Assets $ 23,700,563 $ 22,559,358
34 _
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
III. DETAILED NOTES - continued
E. Long -Term Liabilities
Following is a summary of changes in long -term liabilities for year 2002:
Balance
Balance
January 1,
December 31,
2002 Additions
Reductions
2002
General obligations bonds
$5,090,000 $2,635,000
$ 565,000
$7,160,000
Revenue bonds
380,000 -
65,000
315,000
KDOCH loan payable
321,588 -
50,968
270,620
Special assessment debt
- 565,235
28,672
536,563
Total
$5,791,588 $3,200,235
709,640
$8,282,183
The following is a detailed listing of the Authority's long -term debt including general obligation
bonds, revenue bond, loan payable, and special assessment debt.
Original
Interest
Bonds
Issue
Rates
Outstanding
General Obligation Bonds
General Obligation 1993 -A
$ 375,000
3.40% to 5.00%
$ 45,000
General Obligation 1993 -B
275,000
3.85% to 4.75%
35,000
General Obligation 1998
4,440,000
4.05% to 5.50%
2,660,000
General Obligation 1999 -B
555,000
3.90% to 5.20%
400,000
General Obligation 2001 -A
1,385,000
4.45% to 5.60%
1,385,000
General Obligation 2002 -A
2,635,000
2.45% to 3.70%
2,635,000
7,160,000
Revenue Bonds
Leasehold revenue 1991 $ 850,000 5.00% to 7.25% 315,000
Kansas Department of Commerce
and Housing Loan $ 468,543 2% 270,620
Special assessment debt $ 565,235 3.19% 536,563
Total 8 282 183
35
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002, and 2001
III. DETAILED NOTES - continued
E. Long -Term Liabilities - continued
Interest expense in 2002 is as follows:
General Obligation Bonds $ 250,686
Revenue Bonds 21,284
Loan 5,922
Special assessment debt 21,422
299,314
Add: Amortization of bonds costs 19,853
Total 319 167
In prior years, the Authority defeased certain general obligation bonds by placing funds in an
irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the
trust account assets and the liability for the defeased bonds are not included in the Authority's financial
statements. On December 31, 2002, $495,000 of bonds outstanding are considered defeased.
Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies
and rental revenues:
Annual debt service requirements to maturity for revenue bonds to be paid with rental revenues:
Bonds
Interest
Year
Outstanding
Due
Total
2003
$ 895,000
$ 290,690
$ 1,185,690
2004
830,000
253,762
1,083,762
2005
850,000
220,434
1,070,434
2006
850,000
186,866
1,036,866
2007
885,000
154,858
1,039,858
To maturity
2,850,000
327,883
3,177,883
7 160 000
1 434 4
8 594 493
Annual debt service requirements to maturity for revenue bonds to be paid with rental revenues:
36
Bonds
Interest
Year
Outstanding
Due
Total
2003
$ 70,000
$ 22,510
$ 92,510
2004
75,000
17,610
92,610
2005
80,000
12,285
92,285
2006
90,000
6,525
96,525
$315,000
58 930
373 930
36
' Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
'
III. DETAILED NOTES - continued
E. Long -Term Liabilities - continued
Annual debt service requirements to maturity for Kansas Department of Commerce and Housing Loan
to be paid from rental revenues:
'
Loan
Year Principal
Interest
Due
Total
'
2003 $ 51,990
2004 53,036
$ 5,154
4,109
$ 57,144
57,145
2005 54,109
3,043
57,152
'
2006 55,185
2007 56,300
1,955
846
57,140
57,146
270 620
15 107
285 727
'
Annual debt service requirement to maturity for Special
Assessment Debt to be paid from rental
revenue:
n
91
� I
I I
Wji
I'
Year
2003
2004
2005
2006
2007
Thereafter
Loan
Principal
$ 29,758
30,886
32,056
33,271
34,533
376,059
536 563
F. Retained Earnings and Contributed Capital
Interest
Due
$ 20,336
19,209
18,038
16,824
15,562
74,791
164 760
Total
$ 50,094
50,095
50,094
50,095
50,095
450,850
701 323
Under the provision of bond agreements, certain assets are restricted for specific uses. Retained
earnings which have been reserved relating to these restricted assets consist of the following:
December 31
2002 2001
Retained earnings:
Reserved under leasehold bond Series 1991 $ 85,000 $ 85,000
Unreserved retained earnings 11,184,619 10,725,326
Total retained earnings 11.269,619 10.810.326
On
IV.
01
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
DETAILED NOTES — continued
F. Retained Earnings and Contributed Capital — continued
Changes in grants and contributions are summarized as follows:
Balance January 1, 2001
Depreciation on property and equipment acquired by government grants
Balance December 31, 2001
Federal grant contributions
Depreciation on property and equipment acquired by government grants
Balance December 31, 2002
OTHER INFORMATION
A. Defined Benefit Pension Plan
Federal Grants
$ 9,510,507
(583,135)
8,927,372
144,005
(583,135)
$ 8.488,854
Plan description — The Authority participates in the Kansas Public Employees Retirement System
( KPERS). The plan is a cost - sharing multiple - employer defined benefit pension plan as provided by
Kansas statutes (KSA 74 -4901 et seq). KPERS provides retirement benefits, life insurance, disability
income benefits and death benefits. Kansas law establishes and amends benefit provisions. KPERS
issues a publicly available financial report that includes financial statements and required
supplementary information. Those reports may be obtained by writing to KPERS (611 S. Kansas
Avenue, Suite 100, Topeka, Kansas 66603 -3803) or by calling 1- 800 - 228 -0366.
Funding policy — KSA 74 -4919 establishes the KPERS member - employee contribution rate at 4% of
covered salary. The employer collects and remits member - employee contributions according to the
provision of section 414(h) of the Internal Revenue Code. State law provides that the employer
contribution rates be determined annually based on the results of an annual actuarial valuation.
KPERS is funded on an actuarial reserve basis. State law sets a limitation on annual increases in the
employer contribution rates. The KPERS employer rate established for calendar year 2002 is 2.92 %.
The Authority employer contributions to KPERS for the years ending December 31, 2002, 2001, and
2000 were $12,919, $11,005, and $11,821 respectively, equal to the required contributions for each
year.
B. Deferred Compensation Plan
The Authority offers its employees a deferred compensation plan ( "Plan ") created in accordance with
Internal Revenue Code Section 457. The Plan, available to all Authority employees, permits them to
defer a portion of their salary until future years. The deferred compensation is not available to
employees until termination, retirement, death, or unforeseeable emergency. Plan assets are
transferred to a plan agent in a custodial trust and are not available to the claims of the Authority's
general creditors.
38
J
ISalina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
' IV. OTHER INFORMATION — continued
C. Flexible Benefit Plan (I.R.C. Section 125)
' The Authority has adopted by resolution a salary- reduction flexible benefit plan ( "Plan ") under Section
125 of the Internal Revenue Code. All Authority employees working more than 20 hours per week are
' eligible to participate in the Plan beginning after thirty days of employment. Each participant may
elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through
the Plan include various insurance and disability benefits.
' D. Risk Management
The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of
' assets; errors and omissions; and natural disasters for which the Authority carries commercial
insurance. Settlements of claims did not exceed coverage for the years ended December 31, 2002 and
2001.
' E. Contingent Liabilities
' The Authority receives significant financial assistance from numerous federal and state governmental
agencies in the form of grants and state pass- through aid. The disbursement of funds received under
these programs generally requires compliance with terms and conditions specified in the grant
' agreements and is subject to audit. Any disallowed claims resulting from such audits could become a
liability of the Authority. However, in the opinion of management, any such disallowed claims would
not have a material effect on any of the financial statements of the Authority at December 31, 2002.
' F. Environmental Matter
' The Authority has been involved in discussions with the Corps of Engineers, Environmental Protection
Agency, and the Kansas Department of Health and Environment relative to the former Schilling Air
Force Base (the "Base ") in Salina, Kansas. The Base was operational from 1942 to 1965 when it was
' decommissioned and became the current Salina Municipal Airport and Salina Airport Industrial
Center. During its period of operation, the Base was used for large aircraft including B -17's, B -29's,
B -47's and the refueling KC -97's and KC- 135's. The Army Corps of Engineers did a removal of 107
' former underground storage tanks at the former Base in 1995. The Army Corps of Engineers is now
evaluating any other potential environmental contamination at the former Schilling Air Force Base
caused by the Department of Defense. In addition to efforts by the Corps of Engineers, the
' Environmental Protection Agency has conducted an Expanded Site Investigation (ESI) to evaluate all
sources of potential contamination at the Site.
' Once the additional information gathering effort has been conducted and all parties know the nature
and the extent of the contamination determined to exist on the property owned by the Authority and
other public and private landowners, which make up the Airport Industrial Center, it is anticipated that
1 39
IV.
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
OTHER INFORMATION — continued
F. Environmental Matter — continued
there will be a discussion with respect to cleanup options and allocation of responsibility. At this time,
it is not known whether the City of Salina or the Airport Authority will have cleanup obligations.
The Corps of Engineers is in the process of formulating a final work plan for more investigative work
in several areas of the former Schilling Air Force Base. Although the process is moving slowly, it is
believed the Corps of Engineers will take the lead on remediating contamination left behind by the
military.
The Authority also anticipates work in the next year or two related to lead contamination left behind
by an outdoor skeet shooting range located on the southwestern portion of the Airport Industrial
Center. This work is anticipated to be some soil removal of lead contamination caused by lead shot in
the shooting range. At this point, the Authority anticipates conducting any work necessary under the
authority of the Kansas Department of Health and Environment Voluntary Clean -up Program.
G. Rental Income Under Operating Leases
A significant portion of the operating revenue of the Authority is generated through the leasing of
airport and building space to airport fixed base operators and others on a fixed fee as well as a
contingent rental basis. Ownership risks are retained by the Authority, and accordingly, such leases
are treated as operating leases.
The following is a schedule of minimum future rentals on non - cancellable operating leases to be
received in each of the next five years and thereafter:
Years Ended
December 31
2003
$ 645,698
2004
545,320
2005
487,122
2006
355,703
2007
127,272
Later years
212,998
Total 2 374 113
40
1
I I
I I
Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
IV. OTHER INFORMATION — continued
H. Major Customers
The Authority receives significant operating and financing lease revenue from Raytheon Aircraft
Company, Kansas State University- Salina, Flower Aviation, Midway Aviation, Schwan's Sales, and
KASA Fab, Inc.. Rentals from these six tenants equals 61% of operating and capital lease revenue for
the year ended December 31, 2002.
I. Non - Operating Income
Net non - operating income consisted of the following for the years ended December 31, 2002 and
2001:
Mill levy
Interest and investment income
Financing lease
Other interest
Total
Interest expense
' Revenue bond
General obligation bonds
Special assessment debt
' Other debt
Amortization of bond issue costs
Total
2002
$ 817,499
116,842
30,921
965,262
21,284
250,686
21,422
5,922
19.853
319,167
2001
$ 795,404
114,707
30,740
940,851
30,954
189,741
7,091
22,173
249.959
Net non - operating income 646 095 690 892
J. Commitment Under Operating Lease
The Authority has entered into a non - cancellable operating lease agreement for the rental of office
equipment. Rent paid for both 2001 and 2002 was $4,260. Minimum rentals, on an annual basis are
as follows:
Years Ended
December 31
2003 $ 4,260
2004 2,130
6 390
41
(THIS PAGE INTENTIONALLY LEFT BLANK)
42
Supplemental Information
During 2002 Salina's largest employer, Schwan's Food Manufacturing, Inc.,
constructed a new depot for its frozen food home delivery service.
The new facility is located at the Airport Industrial Center.
I
0
IL1
(THIS PAGE INTENTIONALLY LEFT BLANK)
43
SALINA AIRPORT AUTHORITY
SCHEDULES OF OPERATIONS AND CHANGES
IN RETAINED EARNINGS
(continued)
44
January 1 to December 31
2002
2001
OPERATING REVENUES
Building rents
$ 596,599
$ 658,609
Ramp rents
59,584
58,285
Land rents
197,827
226,084
Agri land rents
59,161
47,926
Hangar rents
111,843
111,387
Tank farm rents
9,975
9,371
Fuel flowage fees
278,948
252,942
Gain on sale of assets
29,455
86,719
Landing fees
4,514
7,250
Commissions
18,285
22,590
Other income
20,888
10,572
Total Operating Revenues
1,387,079
1,491,735
OPERATING EXPENSES BEFORE DEPRECIATION
ADMINISTRATIVE EXPENSES
Airport promotion
21,624
51,960
Computer/Network Administration
1,610
5,840
Dues and subscriptions
17,568
14,676
Employees retirement
12,798
11,005
Engineering
12,166
8,982
FICA tax
33,886
34,590
Industrial development
20,000
20,000
Insurance- medical
89,761
82,765
Insurance - property/liability
83,642
63,503
Kansas unemployment tax
442
461
Legal and accounting
44,892
24,897
Office salaries
222,408
214,358
Office supplies
9,563
9,795
Other administrative
9,822
12,199
Postage
4,095
4,411
Property appraisals
2,200
5,650
Property taxes
136,714
158,406
Telephone
10,292
9,047
Travel and meetings
18,251
21,458
Total Administrative Expenses
751,734
754,003
(continued)
44
45
SALINA AIRPORT AUTHORITY
SCHEDULES OF OPERATIONS AND CHANGES
IN RETAINED EARNINGS
(continued)
January 1 to December 31
2002
2001
'
MAINTENANCE EXPENSES
Airfield maintenance
10,311
13,687
Airport security
1,306
10,756
'
Building maintenance
39,901
36,978
Equipment gas, oil & repairs
25,838
30,215
Fire department expense
12,483
8,901
'
Grounds maintenance
4,960
3,248
Maintenance salaries
228,788
239,110
Other maintenance expenses
9,759
13,509
'
Snow removal expense
14,383
11,848
Utilities
82,801
79,937
'
Total Maintenance Expenses
430,530
448,189
Total Operating Expenses Before Depreciation
1,182,264
1,202,192
'
OPERATING EARNINGS BEFORE DEPRECIATION
204,815
289,543
'
DEPRECIATION EXPENSE
974,140
934,270
OPERATING PROFIT (LOSS)
(769,325)
(644,727)
NON - OPERATING INCOME (EXPENSE)
Mill levy
817,499
795,404
'
Interest income - capital lease
116,842
114,707
Interest income
30,921
30,740
Interest expense
(299,314)
(227,786)
'
Amortization of bond costs
(19,853)
(22,173)
Net Non - Operating Income
646,095
690,892
'
NET INCOME
(LOSS)
(123,230)
46,165
ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH
'
FEDERAL CONTRIBUTIONS (Note 1)
582,523
583,135
INCREASE (DECREASE) IN RETAINED EARNINGS
459,293
629,300
RETAINED EARNINGS, January 1
10,810,326
10,181,026
'
RETAINED EARNINGS, December 31
$11,269,619
$10,810,326
45
SALINA AIRPORT AUTHORITY
CAPITAL EXPENDITURES
AIRPORT IMPROVEMENTS
Perimeter fence modifications
Runway and drive markings
Total Airport Improvements
BUILDINGS
Bi -fold hanger doors Bldg. 506 -1
Bi -fold hanger doors Bldg. 506 -2
Remodel facility Bldg. 1021
Exterior paint Bldg. 1021
Bldg. 313 Improvements
Bldg. 394 Improvements
Bldg. 509 Improvements
Bldg. 520 Paint SDC- A
Bldg. 520 Lock system SDC -A
Bldg. 595 Steel siding
Bldg. 595 Electricial improvements
Bldg. 595 Paint doors and trim
Bldg. 820 Remodel
Bldg. 655 Fencing
Bldg. 506 Hangar lighting
Bldg. 409 Hangar lighting
Bldg. 528 Improvements info. Service tower
KSU Aero Center Improvements
Hangar 409 East entry parking
Bldg. 520 SDC fencing
Carpet Terminal Bldg. Unit 120 -5 TSA
Midway water service line
Total Buildings
CONSTRUCTION IN PROGRESS
Rollover Snowplows AIP - 20
Runway 17/35 rehabilitation design AIP - 20
Airport layout plan update AIP - 21
Runway feasibility study
Runway engineering design 18/36
Demolition Bldg. 624, 634 & 654
Gun Club environmental
Total Construction in Progress
(continued)
46
January 1 to December 31
2002
$ 3,264
6,121
9,385
17,660
17,660
252,379
1,295
289,264
153,299
8,173
6,701
1,966
41,750
2,050
825
148,118
3,402
2,750
2,750
1,068
12,821
82,853
6,854
1,186
12.397
1,067,221
916
191,911
21,691
23,000
104,525
50,014
759
392,816
SALINA AIRPORT AUTHORITY
CAPITAL EXPENDITURES
(continued)
' LAND
Demolition Bldg. 495, 652 & 682
Environmental
' SW Industrial Center concept plan
Street and utility improvements ( Special Assesment )
' Total Land
TOTAL CAPITAL EXPENDITURES
47
January 1 to December 31
2002
5,928
3,050
2,624
2,131
19,784
2,409
8,822
4,453
738
628
865
1,602
450
1,396
1,820
1,500
7,352
6,805
1,637
23,500
23,500
1,364
1,430
1,530
125,318
38,040
11,730
1,470
565,234
616,474
2,211,214
EQUIPMENT
Color monitor radar display ATCT
Gate operator gate 3
Overhead crane rebuild Bldg. 1021
Rooftop heater repair Bldg. 1021
Pumphouse 305 fuel flowage equipment
Automatic defibrillator
'
ARFF Vehicle water pump T -6
Aircraft VHF radios for ground vehicles 3 each
Tower controlled light ATCT cab
'
KPC speakers & mikes
Samsung 17 monitor
Computer workstation
'
Workstation partitions
Lateral files 2 each
Rotary sweeper blade, Steiner tractor
'
Pallet forks for AGCO tractor
Cylinder repair on fork lift
Tires for front end loader
'
Phones for terminal
1994 Agco Allis tractor
1996 Agco Allis tractor
'
1991 Ford Explorer transmission
Code 3 Excalibur light bar for ARFF
Samsung Syncmaster 2 each
'
Total Equipment
' LAND
Demolition Bldg. 495, 652 & 682
Environmental
' SW Industrial Center concept plan
Street and utility improvements ( Special Assesment )
' Total Land
TOTAL CAPITAL EXPENDITURES
47
January 1 to December 31
2002
5,928
3,050
2,624
2,131
19,784
2,409
8,822
4,453
738
628
865
1,602
450
1,396
1,820
1,500
7,352
6,805
1,637
23,500
23,500
1,364
1,430
1,530
125,318
38,040
11,730
1,470
565,234
616,474
2,211,214
Date of issue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 1993 - A
December 31, 2002
Schedule of Bond Interest and Principal Payments
Due in
Year
2003
48
Bond
Interest
$ 1,980
$ 1,980
December 6, 1993
$ 375,000
3.40% to 5.00%
September 1, 2003
$ 330,000
$ 45,000
Bond
Principal
$ 45,000
$ 45,000
Date of issue:
Amount of issue:
Interest rate:
Maurity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 1993 - B
December 31, 2002
December 6, 1993
$ 275,000
3.85% to 4.75%
September 1, 2003
$ 240,000
$ 35,000
Schedule of Bond Interest and Principal Payments
Due in Bond
Bond
Year Interest
Principal
2003 $ 1,575
$ 35,000
$ 1,575
$ 35,000
49
Date of issue:
Amount of issue:
Interest rate:
Maurity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 1998 - A
December 31, 2002
Schedule of Bond Interest and Principal Payments
Due in Bond
Year Interest
2003
$112,375
2004
94,130
2005
75,662
2006
56,972
2007
38,060
Thereafter
19,140
$396,339
50
June 29, 1998
$4,440,000
4.05% to 5.50%
September 1, 2008
$1,780,000
$2,660,000
Bond
Principal
$ 445,000
445,000
445,000
445,000
440,000
440,000
$2,660,000
Date of isue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION REFUNDING BONDS
SERIES 1999 - B
December 31, 2002
June 29, 1999
$ 555,000
3.90% to 5.20%
September 1, 2010
$ 155,000
$ 400,000
Schedule of Bond Interest and Principal Pants
Due in
Bond
Bond
Year
Interest
Principal
2003
$ 19,412
$ 40,000
2004
17,672
40,000
2005
15,872
40,000
2006
14,032
30,000
2007
12,623
55,000
Thereafter
20,550
195,000
$100,161
$ 400,000
51
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2001 - A
December 31, 2002
Date of issue:
October 31, 2001
Amount of issue:
$ 1,385,000
Interest rate:
4.45% to 5.60%
Maturity date:
September 1, 2012
Principal paid:
$ -
Outstanding balance:
$ 1,385,000
Schedule of Bond Interest and Principal Pg ents
Due in
Bond
Bond
Year
Interest
Principal
2003
$ 71,810
$ 105,000
2004
66,298
110,000
2005
60,522
120,000
2006
54,222
125,000
2007
48,660
135,000
Thereafter
133,813
790,000
$435,325
$ 1,385,000
52
Date of issue:
Amount of issue:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2002 - A
December 31, 2002
Schedule of Bond Interest and Principal Payments
Due in Bond
Year Interest
2003
2004
2005
2006
2007
Thereafter
53
$ 83,538
75,662
68,378
61,640
55,515
154,380
$499,113
August 29, 2002
$ 2,635,000
2.45% to 3.70%
September 1, 2012
$ 2,635,000
Bond
Principal
$ 225,000
235,000
245,000
250,000
255,000
1,425,000
$ 2,635,000
SALINA AIRPORT AUTHORITY
LEASEHOLD REVENUE BONDS
SERIES 1991
December 31, 2002
Date of issue:
November 1, 1991
Amount of issue:
$ 850,000
Interest rate:
5.00% to 7.25%
Maturity rate:
September 1, 2006
Principal paid:
$ 535,000
Outstanding balance:
$ 315,000
Schedule of Bond Interest and Principal Payments
Due in
Bond
Bond
Year
Interest
Principal
2003
$ 22,510
$ 70,000
2004
17,610
75,000
2005
12,285
80,000
2006
6,525
90,000
$ 58,930
$ 315,000
54
SALINA AIRPORT AUTHORITY
KANSAS DEPARTMENT OF COMMERCE AND HOUSING, LOAN PAYABLE
December 31, 2002
Date of loan:
Amount of loan:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
October 1, 1997
$ 468,542
2%
October 1,2007
$ 197,922
$ 270,620
Schedule of Loan Interest and Principal Pam
Due in
Loan
Loan
Year
Interest
Principal
2003
$ 5,154
$ 51,991
2004
4,109
53,036
2005
3,043
54,109
2006
1,955
55,184
2007
846
56.300
55
$ 15,107 $ 270,620
SALINA AIRPORT AUTHORITY
SPECIAL ASSESMENT DEBT - STREET AND UTILITY IMPROVEMENT
December 31, 2002
Date of loan:
Amount of loan:
Interest rate:
Maturity date:
Principal paid:
Outstanding balance:
Schedule of Loan Interest and Principal Payments
Due in
Year
2003
2004
2005
2006
2007
Thereafter
56
September 11, 2002
$ 565,235
3.79%
October 1,2011
$ 28,672
$ 536,563
Loan
Loan
Interest
Principal
$ 20,336
$ 29,758
19,209
30,886
18,038
32,056
16,824
33,271
15,562
34,533
74,791
376,059
$ 164,760 $ 536,563
SALINA AIRPORT AUTHORITY
INSURANCE IN FORCE
December 31, 2002
Insurance Policy Type of Coverage
Employers Insurance of Wausau Workmen's Compensation
on behalf of USAIG and Employer's Liability
Pol. #WCC- Z91- 547496 -012
National Union Fire Ins. Co. of Bodily Injury & Liability
Pittsburgh, PA Hangar Keepers
Pol. #AP3229456 -08
The Travelers Insurance Co.
Pol. #P630594X3132TILO2 Deluxe Property- Buildings
Business Income
Pol. #QT- 660- 594X1925TIL02 Inland Marine - Equipment
Pol. #BAJBMG696X7490TIL02 Boiler & Machinery
57
Amount of
Coverage
$ 500,000
$ 500,000
$ 500,000
$11,262,648
$ 1,256,263
$ 1,559,055
$ 3,900,805
$ 500,000
$ 2,000
$ 500,000
$ 100,000
$ 500,000
$ 500,000
$ 500,000
$ 1,000,000
$ 1,000,000
$ 100,000
Vehicles & Equipment
Pol. #810306K2188
Liability
Medical payments
Uninsured motorists
ITT Hartford
Crime Policy
Pol. #37BPEAG4896
Employee theft - per employee
Northland Insurance
Public Officials & Empl. Liability
Pol. #AY040898
Each person limit
Each wrongful act
Aggregate limit
Great American Alliance Ins. Co.
Kansas Underground Storage Tank Liability
Pol. # KST 788- 29 -33 -08
Environmental ncident
Annual aggregate
Limit of defense
57
Amount of
Coverage
$ 500,000
$ 500,000
$ 500,000
$11,262,648
$ 1,256,263
$ 1,559,055
$ 3,900,805
$ 500,000
$ 2,000
$ 500,000
$ 100,000
$ 500,000
$ 500,000
$ 500,000
$ 1,000,000
$ 1,000,000
$ 100,000
(THIS PAGE INTENTIONALLY LEFT BLANK)
m
STATISTICAL SECTION
Construction of the new 4,300 foot runway at the Salina Municipal Airport
began in 2003. Financing for the project was provided by the SAA's
General Obligation Improvement Bonds, Series 2002 -A.
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Salina Airport Authority
OPERATING EXPENSE HISTORY
Ten Years Ended December 31, 2002
Fiscal Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Office &
Administrative
Expense
$458,918
$467,803
$481,914
$497,561
$568,606
$631,072
$726,651
$740,530
$754,003
$751,734
Ki01
Maintenance
$361,412
$370,266
$375,594
$398,287
$367,530
$377,551
$377,457
$386,095
$448,189
$430,530
Total
Operating
Expense
$820,330
$838,069
$857,508
$895,848
$936,136
$1,008,623
$1,104,108
$1,126,625
$1,202,192
$1,182,264
Salina Airport Authority
FEDERAL FINANCIAL ASSISTANCE HISTORY
Ten Years Ended December 31, 2002
NOTE:
1. The use of Federal Aviation Administration Airport Improvement Program
Grant Funds are limited to funding specific airfield capital improvements.
Airfield capital improvements are detailed in program grant agreements
entered into by the Salina Airport Authority and the Federal Aviation Administration
The grant funds finance 90% of total project costs.
2. During 1998, the SAA was awarded a Community Development Block
Grant from the Kansas Department of Commerce and Housing in the amount of $1,031,219.
The proceeds were used to reconstruct over 6.5 miles of secondary streets within the
Salina Airport Industrial Center. 50% of the awarded amount was a true grant. The other 50%
was a loan which is recorded as a long term liability under Bonds and Note Payable on the
Balance Sheet. (See page 55)
3. During 1999, the SAA closed out two (2) Airport Improvement Projects. AIP No. 18 closeout
resulted in the SAA refunding the Federal Aviation Administation in the amount of $11,132.
The SAA received a final reimbursment in the amount of $3,212 to closeout Al? No. 19.
61
Federal Aviation
State Commerce &
Administration
Housing
Airport
Community Development
Fiscal Year
Improvement Grants
Block Grant
1993
$30,162
1994
$270,191
1995
$3,210,933
1996
$2,006,786
1997
$1,640,967
1998
$1,026,918
$841,700
1999
- $7,920
$189,520
2000
$0
$0
2001
$0
$0
2002
$144,005
$0
NOTE:
1. The use of Federal Aviation Administration Airport Improvement Program
Grant Funds are limited to funding specific airfield capital improvements.
Airfield capital improvements are detailed in program grant agreements
entered into by the Salina Airport Authority and the Federal Aviation Administration
The grant funds finance 90% of total project costs.
2. During 1998, the SAA was awarded a Community Development Block
Grant from the Kansas Department of Commerce and Housing in the amount of $1,031,219.
The proceeds were used to reconstruct over 6.5 miles of secondary streets within the
Salina Airport Industrial Center. 50% of the awarded amount was a true grant. The other 50%
was a loan which is recorded as a long term liability under Bonds and Note Payable on the
Balance Sheet. (See page 55)
3. During 1999, the SAA closed out two (2) Airport Improvement Projects. AIP No. 18 closeout
resulted in the SAA refunding the Federal Aviation Administation in the amount of $11,132.
The SAA received a final reimbursment in the amount of $3,212 to closeout Al? No. 19.
61
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Salina Airport Authority
REVENUE BOND COVERAGE
Ten Years Ended December 31, 2002
Fiscal
Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Notes:
Pledged
Revenue Bond
Revenue
Debt Service
Coverage
$414,514
$278,395
1.50
$421,554
$280,578
1.50
$189,446
$163,215
1.16
$189,446
$163,790
1.16
$189,446
$168,962
1.12
$189,446
$163,938
1.16
$189,446
$163,841
1.16
$189,446
$185,013
1.02
$189,446
$164,420
1.15
$189,446
$158,320
1.20
1. During 1999, the Series 1990 -B Bonds were refinanced to remove IRS restrictions and
achieve an interest rate savings.
Source: Salina Airport Authority Records
63
Salina Airport Authority
Principal Customers
Year Ended December 31, 2002
Company
Revenue
% of Operating &
Direct Finance Lease
Revenue
Raytheon Aircraft Co.
$260,216
16.82%
Kansas State University- Salina
219,719
14.20%
Midway Aviation
188,849
12.21%
Flower Aviation
143,310
9.26%
Schwan's Food Manufacturing, Inc.
86,097
5.57%
KASA Fab, Inc.
42,422
2.74%
Federal Aviation Adminis.
22,350
1.44%
Palleton of Kansas, Inc.
21,600
1.40%
Geocore Services
21,240
1.37%
Two Rivers Vending Co.,Inc.
20,935
1.35%
Kejr, Joe
19,694
1.27%
Salina Vortex Corporation
19,625
1.27%
Builders Choice Concrete
17,490
1.13%
Aerospace Systems & Tech.Inc.
17,090
1.10%
L & R Farms
16,283
1.05%
Hertz Corporation
15,582
1.01%
Waddle's Manufacturing & Machine
15,000
0.97%
Laas, Brent
14,550
0.94%
Palmer Trucking Co.,
13,637
0.88%
WWC License LLC
12,860
0.83%
Triangle Trucking
12,072
0.78%
Blicks Agri-Farm Cen
12,000
0.78%
Roto - Reclaimer Corporation
11,250
0.73%
AcuStep, Inc.
10,560
0.68%
Snak -Atak
9,253
0.60%
Mesa Airlines /Air Midwest
9,185
0.59%
Salina Snack Sales
9,180
0.59%
Scientific Engineering
8,700
0.56%
Blue Beacon International
8,641
0.56%
Civil Air Patrol, KS Wing HDQ
7,836
0.51%
Land of OZ Meats
7,525
0.49%
Salina Auto Auction
7,200
0.47%
Salina Aircraft Sales, Inc.
6,230
0.40%
Kansas Highway Patrol
5,430
0.35%
Sandpiper Yachts
5,340
0.35%
Total Operating Lease and Direct Finance Lease Revenue for 2002 was $1,547,070
Source: Salina Airport Authority Records
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Salina Airport Authority
MILL LEVY REVENUE
Ten Years Ended December 31, 2002
Fiscal Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Source: Salina Airport Authority Records
..
Mill Levy
0
$301,829
$406,232
$357,887
$338,058
$322,270
$783,363
$801,237
$795,404
$817,499
Salina Airport Authority
AIR TRAFFIC, FUEL FLOWAGE AND ENPLANEMENT TRENDS
Ten Years Ended December 31, 2002
Note:
One air traffic operation equals one aircraft takeoff and landing
Source: Salina Airport Authority Records
67
Scheduled
Fiscal
Air Traffic
Fuel Flowage
Air Service
Year
Operations
Gallons
Ennplanements
1993
66,144
2,126,230
5,591
1994
61,215
2,424,880
7,175
1995
68,291
2,435,656
7,813
1996
62,021
2,907,894
8,652
1997
68,822
3,577,650
9,153
1998
80,338
3,603,673
12,909
1999
90,400
3,808,886
13,436
2000
87,709
4,472,164
10,270
2001
92,870
4,396,429
6,507
2002
95,801
4,695,093
2,565
Note:
One air traffic operation equals one aircraft takeoff and landing
Source: Salina Airport Authority Records
67
Salina Airport Authority
MAJOR EMPLOYERS IN THE SALINA/SALINE COUNTY AREA
December 31, 2002
Major Private Employers
Approx. # Type of
Company Employees Business
Tony's Pizza
2,000
Frozen Foods Manufacturer
Salina Reg. Med. Center
1,082
Health Care
Exide Corporation
800
Battery Manufacturing
Great Plains Manufacturing
650
Farm Implements & Landscaping Equipment
Philips Lighting
600
Fluorescent Lamp Manufacture
Raytheon Aircraft Co.
400
Aircraft Sub - assemblies Manuf.
Solomon Corp.
300
Electrical Equipment
Lock/Line
300
Cell Phone Insurance
Eldorado National, Inc.
255
Medium & Small Shuttle Buses
Wal -Mart
183
Retail
Crestwood Cabinets, Inc.
160
Custom Made Cabinets
OCCK
150
Plastic products, Subcontracting
Advance Auto/Parts America
150
Warehouse Distribution
KASA/K.ASA Fab
140
Electronic Controls & Steel Fabrication
Lowe's Home Improvement
140
Home Improvement Retail
Exline
130
Structural steel fabrication
Salina Journal
130
Newspaper Publishing
Sunflower Bank
120
Bank
Premier Pneumatics
115
Pneumatic Convey Equipment
Blue Beacon Int'1
104
Truck Wash
PKM Steel
100
Steel Fabrication
Major Public Employers
Approx. #
Public Organizations Employees Tyne of Public Body
Unified School District #305
City of Salina
Saline County
US Postal Service
Kansas State University - Salina
Source: Salina Area Chamber of Commerce
935
School System
471
City Government
233
County Government
128
Postal Service
126
Engineering Technology & Aviation Technology
W
Salina Airport Authority
SALINE COUNTY POPULATION, DEMOGRAPHIC AND LABOR STATISTICS
x ear ronutatnon
1993
51,748
1994
52,240
1995
52,892
1996
53,140
1997
53,168
1998
53,182
1999
53,485
2000*
53,597
2001
53,768
2002
53,910
Note: * Indicates decennial census 100% population counts. Other counts are population estimates.
Demograahics
2000
Median Age 36.1
Number of Households 20,928
Median Household Income $39,862
Per Capita Income $21,996
Employment and Civilian Labor Force (Annual Average)
Employment and Civilian Labor Force
Sources: Institute for Public Policy and Business Research, University of Kansas and
Kansas Department of Human Resources Labor Market Information Services
.•
Civilian Labor
Year
Force
Employed
Unemployed
1993
28,603
27,415
1,188
1994
27,748
26,679
1,069
1995
29,580
28,376
1,204
1996
29,966
28,800
1,166
1997
30,178
29,082
1,096
1998
30,420
29,365
1,055
1999
30,906
30,144
762
2000
30,559
29,703
856
2001
30,093
29,037
1,056
2002
30,569
29,462
1,107
Employment and Civilian Labor Force
Sources: Institute for Public Policy and Business Research, University of Kansas and
Kansas Department of Human Resources Labor Market Information Services
.•
Salina Airport Authority
SALINE COUNTY EMPLOYMENT DATA
Unemployment Rate - 1990 -2002
VPAY %
1990
4.1
1991
3.8
1992
3.4
1993
4.2
1994
3.9
1995
4.1
1996
3.9
1997
3.6
1998
3.5
1999
2.5
2000
2.8
2001
3.5
2002
3.6
Unemployment Rate
d 5
as
4
ca
11,135
c
3
m
2
Government & Gov't Services
4,422
Construction
1
d
2,208
a 0
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� 0 0 0 No" N 0 ti ti ti
1990
8,935
6,332
5,969
3,823
1,715
1,491
1,814
1,222
851
265
262
2000
Services
11,135
Retail Trade
7,864
Manufacturing
6,967
Government & Gov't Services
4,422
Construction
(D)
Finance, Insurance, Real Estate
2,208
Wholesale Trade
1,714
Transportation
1,939
Farm
771
Ag. Services
(D)
Mining
(D)
(D)= suppressed to avoid disclosure
Sources: Institute for Public Policy and Business Research
University of Kansas, Salina /Saline
County Profile Report
United States Census Bureau
70
1990
8,935
6,332
5,969
3,823
1,715
1,491
1,814
1,222
851
265
262
OTHER INDEPENDENT
AUDITORS' REPORTS SECTION
Two Rivers Vending Company, a locally owned vending and catering business,
moved into a newly remodeled office, kitchen and warehouse facility in
November 2002. The project was financed with a portion of the
SAA's General Obligation Improvement Bonds, Series 2001 -A.
'
Internal Control Over Financial Reporting
'218 South Santa Fe
In planning and performing our audit, we considered Salina Airport Authority's
CLUBINE&
internal control over financial reporting in order to determine our auditing
I
LE
CHARIERED
67402 -2267
'
C�rr`fid Puffi" A=mu` a
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER
reporting would not necessarily disclose all matters in the internal control over
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL
'
Salina Fax
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
'
785 / 825 -2446
components does not reduce to a relatively low level the risk that misstatements in
Ellsworth
'
UW
To the Board of Directors
Salina Airport Authority
'
Ellsworth Fax
employees in the normal course of performing their assigned functions. We noted
785 ! 472 -5478
no matters involving the internal control over financial reporting and its operation
Robert 1. Clubine, C.P.A.
We have audited the general purpose financial statements of Salina Airport
David A. Rettele, C.P.A.
Authority for the year ended December 31, 2002, and have issued our report
Jay D. Langley, C.P.A.
Jon K. Bell, C.P.A.
thereon dated May 7, 2003. We conducted our audit in accordance with auditing
Leslie M. Corbett, C.P.A.
standards generally accepted in the United States of America, the standards
'
Stacy J. Osner, C.P.A.
applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States and the Kansas Municipal Audit
Marti K. Fox, C.P.A.
Delores K. Longenecker, C.P.A.
Guide, prescribed by the Director of Accounts and Reports, Department of
'
Linda A. Suelter, C.P.A.
Administration of the State of Kansas.
'
Compliance
As part of obtaining reasonable assurance about whether Salina Airport Authority's
general purpose financial statements are free of material misstatement, we
'
performed tests of its compliance with certain provisions of laws, regulations,
contracts and grants, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an
'
opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance that are required to be reported under Government
'
Auditing Standards.
'
Internal Control Over Financial Reporting
'218 South Santa Fe
In planning and performing our audit, we considered Salina Airport Authority's
P.O. Box 2267
internal control over financial reporting in order to determine our auditing
'
Salina, Kansas
procedures for the purpose of expressing our opinion on the general purpose
67402 -2267
financial statements and not to provide assurance on the internal control over
'
financial reporting. Our consideration of the internal control over financial
reporting would not necessarily disclose all matters in the internal control over
Salina
785 / 825 -5479
financial reporting that might be material weaknesses. A material weakness is a
p g g
Salina Fax
condition in which the design or operation of one or more of the internal control
'
785 / 825 -2446
components does not reduce to a relatively low level the risk that misstatements in
Ellsworth
amounts that would be material in relation to the general purpose financial
785 / 472 -3915
statements being audited may occur and not be detected within a timely period by
'
Ellsworth Fax
employees in the normal course of performing their assigned functions. We noted
785 ! 472 -5478
no matters involving the internal control over financial reporting and its operation
'
that we consider to be material weaknesses.
' 71
This report is intended solely for the information and use of the audit committee, management, others within
the organization and the City Commission and is not intended to be and should not be used by anyone other
than these specified parties.
May 7, 2003
CLUBINE AND RETTELE, CHARTERED
a&4m aOLI
72