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Audit - 2019COMPREHENSIVE ANNUAL FINANCIAL REPORT 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 Prepared by Department of Finance and Administration of City of Salina, Kansas CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal i - iv Organizational Chart v List of Principal Officials vi FINANCIAL SECTION Independent Auditor’s Report 1 - 3 Management's Discussion and Analysis 4 - 15 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements Balance Sheet - Governmental Funds 18 Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities 19 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 20 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund 22 Tourism and Convention Fund 23 Special Gas Fund 24 Sales Tax Capital Fund 25 Statement of Net Position - Proprietary Funds 26 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 27 Statement of Cash Flows - Proprietary Funds 28 - 29 Statement of Assets and Liabilities - Agency Funds 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Notes to the Basic Financial Statements 31 - 70 Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 71 Other Postemployment Benefits - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 72 KPERS Pension Plan Schedule of City’s Proportionate Share of the Net Pension Liability 73 Schedule of City Contributions 73 Combining Statements and Individual Fund Schedules Combining Statements - Nonmajor Funds Fund Descriptions 74 - 75 Combining Balance Sheet - Nonmajor Governmental Funds 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 77 Combining Balance Sheet - Nonmajor Special Revenue Funds 78 - 79 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds 80 - 81 Combining Balance Sheet - Nonmajor Permanent Funds 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Permanent Funds 83 Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund 84 Business Improvement District Fund 85 Neighborhood Park Fund 86 Special Parks and Recreation Fund 87 Special Alcohol Fund 88 Sales Tax Economic Development Fund 89 Arts & Humanities Fund 90 Debt Service Fund 91 Solid Waste Disposal Fund 92 Water and Sewer Fund 93 Sanitation Fund 94 Golf Course Fund 95 Workers’ Compensation Reserve Fund 96 Health Insurance Fund 97 Central Garage Fund 98 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Internal Service Fund Descriptions 99 Combining Statement of Net Position - Internal Service Funds 100 Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds 101 Combining Statement of Cash Flows - Internal Service Funds 102 - 103 Fiduciary Fund Descriptions - Agency Funds 104 Combining Balance Sheet - Agency Funds 105 Combining Statement of Changes in Assets and Liabilities - Agency Funds 106 Schedule STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years 1 107 Changes in Net Position - Last Ten Fiscal Years 2 108 Fund Balances, Governmental Fund - Last Ten Fiscal Years 3 109 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 4 110 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years 5 111 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 6 112 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 7 113 Principal Property Taxpayers 8 114 Property Tax Levies and Distributions 9 115 Direct Sales Rate by Taxing Entity 10 116 Water Sales by Class of Customer 11 117 Ratio of Outstanding Debt by Type 12 118 Ratio of Net General Bonded Debt Outstanding 13 119 Direct and Overlapping Governmental Activities Debt 14 120 Legal Debt Margin 15 121 Pledged Revenue Coverage 16 122 Demographic and Economic Statistics 17 123 Principal Employers 18 124 INTRODUCTORY SECTION DEPARTMENT OF FINANCE TELEPHONE (785) 309-5735 AND ADMINISTRATION FAX (785) 309-5738 300 West Ash, P.O. Box 736 TDD (785) 309-5747 Salina, Kansas 67402-0736 Website: www.salina-ks.gov June 30, 2020 To the Citizens of the City of Salina, Kansas: The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2019, is hereby submitted. The City’s Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City’s accounting system and budgetary controls, and a brief discussion of the City’s economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor’s report, Management’s discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management’s Discussion and Analysis (MD&A) which immediately follows the independent auditor’s report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City’s comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2019 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to ensure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and i transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920.The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The population of the City reported by the 2010 decennial census was 47,707. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown core of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, ElDorado National, and Schwan’s Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to “trade pull factor.” According to the Kansas Department of Revenue’s Annual City Trade Pull Factor report, Salina had a pull of factor of 1.47 in 2019. The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2019. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2018 as compared to 2016. In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2019 the Alley Entertainment Center opened for business and the majority of the City’s Downtown Streetscape project was completed. The new downtown hotel began construction in 2019 and is anticipated to open in July 2020. Other major projects that were on going included gutter and paving on North 9th Street, South Well Field improvements, continued improvements to the water distribution system and preliminary design on the Smoky Hill River Renewal and construction of the Police Training Center project. ii The City continues to address fiduciary pressures generated by a recessionary economy and the more recent financial impacts of the Covid-19 pandemic. General adjustments to the pay plan for cost of living changes at a rate of 2.0% were implemented in 2019. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of “routine” capital—including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: *2019 2020 2021 2022 2023 Sales tax $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 4,395,000 $ 4,250,000 Water & wastewater fund ---- 2,000,000 2,000,000 2,000,000 General obligation bonds 5,225,000 19,700,000 ---- Revenue Bonds/Loans 11,255,000 6,000,000 28,000,000 -- Other sources 785,800 -------- $ 21,645,800 $ 30,085,000 $34,390,000 $6,395,000 $ 6,250,000 Major projects budgeted in 2019 included a Landfill Cell Construction and the implementation of automated Sanitation collection. The Landfill project was completed; however, the Sanitation project has been delayed until late 2020 or early 2021. The significant increases in 2020 and 2021 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project and Wastewater Treatment Plant respectively. Due to uncertain Sales Tax recovery post Covid-19, the River Renewal project has been delayed. No major projects have been planned for 2022 and 2023 until financial resources for those years can be further evaluated. *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning iii 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Ensure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the GordonCPA auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. Sincerely, Michael D. Schrage City Manager iv &LW\RI6DOLQD CITIZENS CITY COMMISSION Mike Hoppock, Mayor Melissa Hodges Trent Davis Karl Ryan Rod Franz City Manager Michael Schrage Deputy City Manager Jacob Wood Development Services Lauren Driscoll Risk Management Legal Services Clark Mize & Linville Chartered* Greg Bengtson Computer Technology vacant Police Brad Nelson Fire Kevin Royse Public Works Jim Kowach Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Fire Administration Fire Suppression Fire Prevention EMS Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Administration Patrol Division Support Division Investigative Division Finance/Administration Debbie Pack City Clerk Water Customer Accounting Finance Smoky Hill Museum Arts & Humanities Brad Anderson Human Resources Natalie Fischer P/OrgCharts/Organizational Chart-Public-2020 Parks & Recreation Chris Cotten Utilities Martha Tasker Municipal Court Building Services Neighborhood Services Planning & Zoning Community Relations Parks Division Recreation Division Golf Course Facility Maintenance Animal Services Bicentennial Center Continuous Process Improvement Scott Gardner * Contract Position v vi City of Salina, Kansas List of Principal Officials City Commission Mike Hoppock, Mayor Melissa Rose Hodges, Vice Mayor Trent Davis, Commissioner Karl Ryan, Commissioner Rod Franz, Commissioner City Executive Staff Michael Schrage, City Manager Jacob Wood, Deputy City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotten, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities Scott Gardner, Continuous Process Improvement ),1$1&,$/ SECTION 1 INDEPENDENT AUDITOR’S REPORT Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 4% and 1%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $46,899,592 as of December 31, 2019 and total revenues of $2,432,958 for the year then ended, and the Housing Authority of the City of Salina, which statements reflect total assets and deferred outflows of resources of $7,393,221 as of June 30, 2019 and total revenues of $2,620,347 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina, is based solely on the reports of the other auditors. 2 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2019, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2018, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2019, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. The financial statements of the City of Salina, Kansas, as of December 31, 2018, were audited by other auditors whose report dated September 29, 2019, expressed an unmodified opinion on those statements. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15, the other postemployment benefit schedules on page 71 and 72, the schedule of the City’s proportionate share of the net pension liability on page 73, and the schedule of City contributions on page 73 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 3 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Gordon CPA LLC Certified Public Accountant Lawrence, Kansas June 30, 2020 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 This section of the report contains an overview and analysis of the City of Salina’s financial statements for the fiscal year ended December 31, 2019. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City’s financial condition. Financial Highlights On an accrual basis, the City’s government-wide net position increased $8.1 million from current operations with net position increases of $4.9 million and $3.2 million in governmental activities and business-type activities, respectively. At the close of 2019, the City’s governmental funds reported combined ending fund balances of $15.8 million, a decrease of $3.3 million from the prior year. This primarily resulted capital project expenditures in the Capital Projects Fund. The General Fund balance increased $2.6 million over the prior year. At the close of 2019, the City’s enterprise funds reported a combined ending Net Position of $93.6 million, an increase of $3.2 million over prior year. Positive performance was shared by the Water and Sewer Fund, the Sanitation Fund, and the Golf Fund, with the Water and Sewer Fund providing the bulk of the change ($2.7 million). The Solid Waste Disposal Fund saw a negative performance as a result of additional costs related to the opening of the Drive Thru Recycling Center. Revenues from governmental activities decreased by $7.0 million from the prior year and revenues from business type activities increased $.7 million from the prior year. Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader’s understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City’s operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City’s assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City’s overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City’s financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long-term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an “Other Governmental Funds” column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City’s financial statements. 5 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund’s budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City’s operations and economy. The City as a Whole This section will identify, discuss, and analyze significant differences and trends that will enhance the reader’s understanding of the City’s financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($37.2 million) of the City’s revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services remained flat from the prior year with the sanitation fund increasing $319K (10.0%), water and sewer fund increasing $306K (1.5%) and governmental activities decreasing $700K in public safety. The increase in charges for services in the sanitation fund and the increase in the water and sewer fund are a result of an increase in user fees. Sales taxes are the next largest component of the revenue mix, providing 25.7% ($22.7 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1% sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. The City is affected by the formula used to distribute the County-wide sales tax among participating jurisdictions (only Cities and the County participate, School and other special districts do not). The formula is based, in part, on the property tax efforts of each jurisdiction. As the portion of the overlapping levy attributable to the City of Salina changes so does the City’s allocated portion of the County-wide sales tax. This change is recognized bi-annually and can affect the overall allocation of the City’s portion of the County-wide sales tax. In 2019, this allocation increased slightly which did not have a significant impact on the tax revenues. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax was to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 15.6% ($13.8 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by 4.0%. The total City mill levy increased by 8.6%. The overlapping levy increased in 2019 by 3.3%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $9.3 million from its peak of $39.7 million in 2007. At the 2019 tax rate, this exemption is equivalent to over $857K in annual lost revenue. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Motor vehicle value increased 4.6%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year 2019 2018 Change Real Estate and Personal Property Assessed Valuation 454,395,369$434,451,245$19,944,124$ City Mill Levy ($ per $1,000) Operating (General Fund)22.285 20.339 1.946 Debt Service 6.109 5.79 0.319 Total City Rate 28.394 26.129 2.265 Total Overlapping Levy 138.341 133.14 5.201 Percent of Total Taxes Collected 97.4% 95.9% 1.5% Ratio of Total Taxes (including delinquent collections) to Taxes Levied 98.6% 98.4% 0.2% Motor Vehicle Valuation 54,687,311$ 53,336,677$ 1,350,634$ Comparative Property Values and Tax Levy Rates The unemployment rate in Salina decreased slightly from 3.3% at the end of 2018 to 2.9% at the end of 2019, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force decreased slightly to 30,094 from 30,174 in 2018. In 2019, the top ten property taxpayers accounted for 10.05% of total assessed value. This is less concentrated than ten years ago (at 14.70%). Statement of Net Position Net position may, over time, provide an indicator of a government’s financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $231.9 million at December 31, 2019. This represents an increase in net assets of $8.1 million over 2018. A comparative Condensed Statement of Net Position at December 31, 2019 and 2018: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 2019 2018 2019 2018 2019 % of Total 2018 % of Total 2019-2018 change Cash and investments 31,406$ 34,302$ 34,957$ 32,140$ 66,363$ 16% 66,442$ 17% (79)$ Other current assets 17,201 16,774 2,512 2,630 19,713 5% 19,404 5% 309 Noncurrent (capital) assets 222,258 210,515 101,079 90,181 323,337 79%300,696 78%22,641 Total assets 270,865 261,591 138,548 124,951 409,413 100%386,542 100%22,871 Total deferred outflows of resources 5,073 5,527 546 802 5,619 100%6,329 100%(710) Total assets and deferred outflows of resources 275,939 267,118 139,094 125,753 415,033 392,871 22,162 Current liabilities 23,971 28,623 3,579 3,814 27,550 16% 32,437 21% (4,887) Noncurrent liabilities 98,696 90,931 41,765 31,332 140,461 84%122,263 79%18,198 Total liabilities 122,667 119,554 45,344 35,146 168,011 100%154,700 100%13,311 Total deferred inflow s of resources 14,913 14,113 198 224 15,112 14,337 775 Net position: Net investment in capital assets 151,527 144,845 63,301 62,368 214,828 92% 207,213 93% 7,615 Restricted for permanent funds 528 514 - - 528 0% 514 0% 14 Restricted for debt service 1,142 1,851 1,368 1,512 2,510 1% 3,363 2% (853) Unrestricted (14,839) (13,759) 28,883 26,503 14,044 6%12,744 6%1,300 Total net position 138,359 133,451 93,552 90,383 231,910 100%223,834 100%8,076 Percent of total net position 60% 60% 40% 40% 100%100% Cash and investments as a percentage of current liabilities 131% 120% 977% 843% 241%205% Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-Type Activities Total Primary Government The largest segment of the City’s net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City’s obligations to citizens and creditors. In 2019, the amount of net investment in capital assets increased by $7.6 million. Amount restricted for debt service decreased by $853 thousand. Unrestricted increased by $1.3 million. Outside of these changes, 2019 resulted in a $8.1 million increase to the net position. Total liabilities increased in governmental activities and increased in business-type activities. In governmental activities, current liabilities decreased, and non-current liabilities increased primarily due to an increase general obligation bonds. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Statement of Activities A Condensed Statement of Activities is shown below: 2019 2018 2019 2018 2019 % 2018 % 2019-2018 Change Program Revenues: Charges for Services 9,730$ 10,411$ 27,423$ 27,061$37,153$ 42% 37,472$ 43% (319)$ Operating Grants and Contributions 4,540 4,300 - - 4,540 5% 4,300 5% 240 Capital Grants and Contributions - 4,635 - - - 0% 4,635 0% (4,635) General Revenues: Property Taxes 13,774 12,508 - - 13,774 16% 12,508 15% 1,266 Sales Taxes 22,742 22,209 - - 22,742 26% 22,209 25% 533 Other Taxes 6,975 7,240 - - 6,975 8% 7,240 8% (265) Investment Revenue 670 183 - 233 670 1% 416 0% 254 Other Miscellaneous 1,168 1,062 847 153 2,015 2%1,215 2%800 Total Revenues:59,599 62,548 28,269 27,447 87,869 100%89,995 100%(2,126) Expenses: General Government 10,866 12,013 - - 10,866 14% 12,013 15% (1,147) Public Safety 25,358 23,892 - - 25,358 32% 23,892 30% 1,466 Public Works 10,528 10,458 - - 10,528 13% 10,458 13% 70 Public Health and Sanitation 1,156 1,256 - - 1,156 1% 1,256 2% (100) Culture and Recreation 6,879 7,040 - - 6,879 9% 7,040 9% (161) Planning and Development 2,522 2,369 - - 2,522 3% 2,369 3% 153 Solid Waste Disposal - - 2,871 2,382 2,871 4% 2,382 3% 489 Water and Sewer - - 14,294 15,190 14,294 18% 15,190 19% (896) Sanitation - - 2,266 2,419 2,266 3% 2,419 3% (153) Golf Course - - 888 926 888 1% 926 1% (38) Interest on Long Term Debt 2,169 2,117 - - 2,169 3%2,117 3%52 Total Expenses 59,479 59,145 20,319 20,917 79,798 100%80,062 100%(264) Increase in net assets before transfers 121 3,403 7,950 6,530 8,071 9,933 (1,862) Transfers and other extraordinary items 4,782 4,831 (4,782) (4,832) - (1) 1 Change in Net Position 4,902 8,234 3,169 1,698 8,071 9,932 (1,861) Net Position January 1 133,452 123,701 90,383 89,083 223,835 212,784 11,051 Prior Period Adjustment 4 1,518 -(398)4 1,120 (1,116) Net Position January 1, restated 133,456 125,219 90,383 88,685 223,839 213,904 9,935 Net Position December 31 138,359$133,453$93,552$90,383$231,910$223,836$8,074$ Condensed Statement of Activities For the Year Ended December 31 Governmental Activities Business-Type Activities Total Primary Government (In $000) 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Governmental Activities. Charges for services attributable to governmental activities totaled $9.7 million, and operating grants for those purposes were $4.5 million. Charges for services decreased slightly and capital grants increased from the prior year, while operating grants decreased. The balance was funded by general revenues. Sales taxes accounted for $22.7 million of general revenues, with property taxes providing $13.8 million. The net position increased by $4.9 million as a result of governmental activities. This increase was primarily related to the increase in sales and other taxes. Total expenses for governmental activities for the year ending December 31, 2019 were $59.5 million compared to $59.1 million in 2018. Governmental activities represent 75%of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 32% of the total. Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $20.3 million, or 24% of the City’s total expenses. The majority of this expense ($14.3 million) is attributable to water and sewer operations, with the other activities costing a combined total of $6.0 million. Net position increased by $3.2 million. This increase was primarily related to the increase in water and sewer fund revenues and a decrease in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2019 and December 31, 2018. Fund 2019 2018 Change General 9,307$ 6,743$ 2,564$ Tourism and Convention 451 458 (7) Special Gas 2,191 1,532 659 Sales Tax Capital 2,406 1,984 422 Schilling Capital Improvement 1,949 2,136 (187) Debt Service 1,142 1,851 (709) Capital Projects (7,652) (694) (6,958) SFH QalicB 1,310 1,218 92 Other Governmental Funds 4,671 3,861 810 15,776$19,089$ (3,313)$ Governmental Fund Balances as of December 31, (in 000's) Total governmental fund balances decreased by $3.3 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund decrease was largely the result of the use of funds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2019 and 2018. Fund 2019 2018 Change Revenues (Including Other Financing Sources) General 44,228$ 41,532$ 2,696$ Tourism and Convention 1,889 1,795 94 Special Gas 2,027 1,653 374 Sales Tax Capital 8,501 8,225 276 Schilling Capital Improvement 21 15 6 Debt Service 6,241 6,602 (361) Capital Projects 11,871 13,555 (1,684) SFH QalicB 499 504 (5) Other Governmental Funds 4,745 4,161 584 Total Revenues 80,021 78,042 1,979 Less Other Sources (21,247)(21,622)375 Revenues, net of other sources 58,774$ 56,420$ 2,354$ Expenditures (Including Other Finacing Uses) General 41,664$ 41,672$ (8)$ Tourism and Convention 1,896 1,550 346 Special Gas 1,368 1,203 165 Sales Tax Capital 8,060 8,324 (264) Schilling Capital Improvement 208 904 (696) Debt Service 6,950 6,955 (5) Capital Projects 18,830 15,144 3,686 SFH QalicB 407 1,001 (594) Other Governmental Funds 3,954 4,653 (699) Total Expenditures 83,335 81,406 1,929 Less Other Uses (5,073) (4,186) (887) Expenditures, net of other uses 78,262$ 77,220$ 1,042$ Total revenues, including other sources, were up $2.4 million compared to 2018, with the General Fund showing the largest increase between the two years, which was $2.7 million. Total expenditures increased $1.9 million over 2018. The majority of that increase was in the Capital Projects Fund as a result of increased spending on projects, specifically the Downtown Streetscape and Police Training Facility projects. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: 2019 2018 Change 2019 2018 Change Current Assets 7,073$ 6,569$ 504$ 28,307$ 26,338$ 1,969$ Capital Assets 1,497 2,350 (853) 97,956 86,535 11,421 Deferred Outflows 67 72 (5)371 610 (239) Total Assets and deferred outflows 8,636$ 8,991$ (355)$ 126,634$ 113,483$ 13,151$ Current Liabilities 103$ 461$ (358)$ 3,273$ 3,183$ 90$ Noncurrent Liabilities 2,865 2,847 18 38,016 27,576 10,440 Deferred Inflows 28 30 (2)126 144 (18) Total Liabilities 2,995$ 3,338$ (343)$ 41,415$ 30,903$ 10,512$ Net investment in capital assets 1,107$ 1,570$ (463)$ 60,568$ 59,502$ 1,066$ Restricted - - - 1,368 1,512 - Unrestricted 4,534 4,083 451 23,283 21,566 1,717 Total Net Position 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ Current A ssets as a percentage of current liabilities 6885% 1425% 865% 827% 2019 2018 Change 2019 2018 Change Current Assets 2,012$ 1,747$ 265$ 77$ 116$ (39)$ Capital Assets 1,165 886 279 462 410 52 Deferred Outflows 84 92 (8)25 27 (2) Total Assets 3,261$ 2,725$ 536$ 563$ 553$ 10$ Current Liabilities 137$ 106$ 31$ 66$ 64$ 2$ Noncurrent Liabilities 668 684 (16)215 225 (10) Deferred Inflows 35 38 (3)10 11 (1) Total Liabilities 840$ 828$ 12$ 291$ 300$ (9)$ Net investment in capital assets 1,165$ 886$ 279$ 462$ 410$ 52$ Restricted - - - - - - Unrestricted 1,256 1,011 245 (187)(103)(84) Total Net Position 2,421$ 1,897$ 524$ 275$ 307$ (32)$ Current A ssets as a percentage of current liabilities 1469% 1648% 117% 181% Comparative Summary Statement of Net Positio n as of December 31 (in $000's ) Solid Waste Dispos al Water and Sewer Sanitation Golf Course 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with three of the four funds reflecting increases in net position. 2019 2018 Change 2019 2018 Change Operating Revenues 3,499$ 3,116$ 383$ 20,588$ 20,207$ 381$ Operating Expenses 2,849 2,353 496 13,013 14,348 (1,335) Operating Income 649 763 (114) 7,575 5,859 1,716 Non-operating revenues (expenses)(22)17 (39)(1,281)(667)(614) Income (Loss) before Transfers 627 780 (153) 6,294 5,192 1,102 Transfers in (out)(640)(690)50 (3,650) (3,650) - Change in Net Position (13)90 (103)2,644 1,542 1,102 Net Position January 1 5,653 6,237 (584) 82,580 80,697 1,883 Restatement -(674)674 (5)341 (346) Net Position January 1, restated 5,653 5,563 90 82,575 81,038 1,537 Net Position December 31 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ 2019 2018 Change 2019 2018 Change Operating Revenues 3,276$ 3,006$ 270$ 907$ 884$ 23$ Operating Expenses 2,266 2,419 (153)888 926 (38) Operating Income 1,010 587 423 19 (42) 61 Non-operating revenues (expenses)-11 (11)-661 (661) Income (Loss) before Transfers 1,010 598 412 19 619 (600) Transfers in (out)(492)(492)1 - - - -- Change in Net Position 519 106 413 19 619 (600) Net Position January 1 1,897 1,856 41 253 292 (39) Restatement 5 (66)71 -2 (2) Net Position January 1, restated 1,902 1,790 112 253 294 (41) Net Position December 31 2,421$ 1,896$ 525$ 272$ 913$ (641)$ Comparative Summary of Revenues, Expenses and Changes in Net Position for the Year Ended December 31 (In $000's) Solid Waste Disposal Water and Sewer Sanitation Golf Course 13 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Budgetary Highlights The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2019. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2019 was $323,337,161, net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2019 and 2018: 2019 2018 2019 2018 2019 2018 Equipment, Furniture and Fixtures 2,352$ 2,374$ 1,536$ 1,489$ 3,888$ 3,863$ Vehicles 2,854 2,957 1,288 1,208 4,142 4,165 Buildings and Improvements 30,556 31,759 8,519 8,941 39,075 40,700 Land 24,224 24,094 2,386 2,060 26,610 26,154 Land Leased Under Capital Assets 423 423 - - 423 423 Infrastructure 116,264 116,365 79,824 72,312 196,088 188,677 Leasehold Improvements 357 326 - - 357 326 Construction in Progress 45,228 32,217 7,527 4,171 52,755 36,388 Total 222,258$210,515$101,079$90,181$323,337$300,696$ Capital Asset Balances Net of Depreciation as of December 31 (In 000's) Governmental Activity Business-type Activity Total Changes to capital assets may be summarized as follows: Governmental Activity Business-Type Activity Total Additions 22,005$ 26,293$ 48,298$ Retirements (4,622) (11,402) (16,024) Depreciation (6,835)(4,815)(11,651) Net Additions 10,548$ 10,075$ 20,623$ Changes to Capital Assets, 2019 (in 000's) Additional information on the City’s capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Debt Management The City’s general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2019 totaled $57,623,908. In addition, there were temporary notes outstanding in the amount of $11,170,000, as well as a financing operating lease in the amount of $656,260. Business-type activities had $11,122,175 in revenue bonds outstanding, as well as $4,116,515 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $22,539,686. The City engaged in the following debt transactions during 2019: On July 30th, the City issued 2019-1, $6,000,000 of temporary notes. The proceeds were used to finance construction to Downtown Streetscape, Police Training Facility Design and 2 special assessment projects. On November 27th, the City issued 2019-2, $13,500,000 in temporary notes to pay off the 2019-1 notes as well as finance construction of the Downtown Streetscape and Police Training Facility. This note will be partially refinanced into a long-term bond issue in 2019 and partially in 2020. On November 27th, the City issued 2019A, $2,090,000 in General Obligation Bonds to finance construction costs for the Grand Prairie II and River Trail Second Addition special assessment projects, as well as to finance the Beechcraft Road project. On December 1, 2019, the City issued $18,520,000 in Senior Special Obligation Revenue Bonds and $4,320,000 in Subordinate Special Obligation Revenue Bonds to fund STAR Bond district projects. Additional information on the City’s debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 %$6,&),1$1&,$/67$7(0(176 Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments 31,406,384$ 34,956,928$ 66,363,312$ 2,222,111$ 655,020$ Receivables (net of allowance for uncollectibles) Accounts 2,080,843 2,033,882 4,114,725 12,159 848,249 Taxes 13,863,340 - 13,863,340 -- Interest 9,518 16 9,534 -- Inventory 339,878 477,644 817,522 30,954 - Restricted cash and investments 907,687 - 907,687 -- Prepaid expenses ---45,192 9,352 Total current assets 48,607,650 37,468,470 86,076,120 2,310,416 1,512,621 Noncurrent assets: Capital assets, nondepreciable Construction in progress 45,227,729 7,526,968 52,754,697 128,057 132,217 Land 24,646,334 2,386,334 27,032,668 1,483,219 10,166,125 Capital assets, depreciable 279,528,709 162,361,912 441,890,621 8,494,072 81,240,459 Less: Accumulated depreciation 127,144,929 71,195,896 198,340,825 5,084,636 47,428,034 Total noncurrent assets 222,257,843 101,079,318 323,337,161 5,020,712 44,110,767 Total assets 270,865,493 138,547,788 409,413,281 7,331,128 45,623,388 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 97,708 43,897 141,605 -4,220 OPEB deferred outflows of resources 62,171 7,919 70,090 -- Pension deferred outflows of resources 4,842,013 484,280 5,326,293 62,093 131,923 Deferred charge on bond issuance 71,376 9,925 81,301 -1,140,061 Total deferred outflows of resources 5,073,268 546,021 5,619,289 62,093 1,276,204 Total assets and deferred outflows of resources 275,938,761$ 139,093,809$ 415,032,570$ 7,393,221$ 46,899,592$ Liabilities: Current liabilities: Accounts payable 3,588,272$ 448,194$ 4,036,466$ 45,557$ 867,149$ Retainage payable 1,980,498 153,409 2,133,907 -- Accrued liabilities 649,172 - 649,172 36,478 145,241 Accrued interest payable 78,459 325,876 404,335 - 227,145 Deposits payable - 229,447 229,447 98,022 - Current portion of compensated absences 2,030,465 478,552 2,509,017 2,989 - Current portion of temporary notes payable 11,170,000 - 11,170,000 -- Current portion of loans payable - 539,863 539,863 -- Current portion of revenue bonds payable - 715,000 715,000 -- Current portion of special assessment debt payable ----2,350 Current portion of general obligation bonds payable 4,474,480 688,388 5,162,868 -1,425,000 Total current liabilities 23,971,346 3,578,729 27,550,075 183,046 2,666,885 Noncurrent liabilities: Accrued liabilities 151,818 - 151,818 39,222 - Compensated absences 755,612 178,087 933,699 26,893 - Security deposits returnable ----57,564 OPEB obligation 3,121,647 397,680 3,519,327 - 13,338 KPERS OPEB obligation 349,412 156,983 506,395 8,186 - Net pension liability 28,968,806 3,148,126 32,116,932 331,750 632,856 Loans payable 12,199,016 21,999,823 34,198,839 -- Revenue bonds payable - 10,407,175 10,407,175 -- Special assessment debt payable ----2,455 General obligation bonds payable 53,149,428 3,428,127 56,577,555 - 20,982,297 Landfill post-closure care liabilities -2,048,896 2,048,896 -- Total noncurrent liabilities 98,695,739 41,764,897 140,460,636 406,051 21,688,510 Total liabilities 122,667,085 45,343,626 168,010,711 589,097 24,355,395 Deferred inflows of resources: Unavailable revenue - property taxes 13,423,860 - 13,423,860 8,599 - KPERS OPEB deferred inflows of resources 66,990 30,097 97,087 2,476 - OPEB deferred inflows of resources 146,354 18,645 164,999 -4,694 Pension deferred inflows of resources 1,275,958 149,620 1,425,578 15,791 36,718 Total deferred inflows of resources 14,913,162 198,362 15,111,524 26,866 41,412 Total liabilities and deferred inflows of resources 137,580,247$ 45,541,988$ 183,122,235$ 615,963$ 24,396,807$ Net Position Net investment in capital assets 151,527,232$ 63,300,942$ 214,828,174$ 5,020,712$ 21,698,665$ Restricted for: Permanent funds: Expendable 527,536 - 527,536 11,334 - Debt service 1,142,418 1,367,894 2,510,312 -- Unrestricted [14,838,672] 28,882,985 14,044,313 1,745,212 804,120 Total net position 138,358,514$ 93,551,821$ 231,910,335$ 6,777,258$ 22,502,785$ Primary Government CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2019 Component Units The notes to the basic financial statements are an integral part of this statement. 16 Operating Capital Total Total Total Salina Salina Charges for Grants and Grants and Governmental Business-type Primary Housing Airport Expenses Services Contributions Contributions Activities Activities Government Authority Authority Governmental activities: General government 10,865,700$ 3,400,883$ 750,696$ -$[6,714,121]$ -$[6,714,121]$ -$-$ Public safety 25,357,782 4,356,956 1,365,509 - [19,635,317]- [19,635,317]-- Public works 10,528,485 309,292 1,438,330 - [8,780,863]- [8,780,863]-- Public health and sanitation 1,156,165 45,549 277,304 - [833,312]- [833,312]-- Culture and recreation 6,879,281 1,513,628 578,558 - [4,787,095]- [4,787,095]-- Planning and development 2,522,266 103,727 129,662 - [2,288,877]- [2,288,877]-- Interest on long-term debt 2,168,897 ---[2,168,897] -[2,168,897]-- Total governmental activities 59,478,576 9,730,035 4,540,059 -[45,208,482]-[45,208,482]-- Business-type activities: Solid Waste Disposal 2,871,468 3,082,199 - - - 210,731 210,731 - - Water and Sewer 14,293,758 20,255,017 - - - 5,961,259 5,961,259 - - Sanitation 2,265,646 3,275,987 - - - 1,010,341 1,010,341 - - Golf Course 888,494 809,636 ---[78,858] [78,858] -- Total business-type activities 20,319,366 27,422,839 ---7,103,473 7,103,473 -- Total primary government 79,797,942$ 37,152,874$4,540,059$ -$[45,208,482]7,103,473 [38,105,009] -- Component units: Salina Housing Authority 2,813,581$ 407,030$ 2,128,578$ 70,557$ - - - [207,416] - Salina Airport Authority 6,167,660 2,432,958 - 1,727,674 ----[2,007,028] Total component units 8,981,241$ 2,839,988$ 2,128,578$ 1,798,231$ ---[207,416] [2,007,028] General Revenues: Property taxes levied for General purposes 9,707,788 - 9,707,788 - 2,371,463 Debt service 2,663,942 - 2,663,942 - - Motor vehicle tax General purposes 1,402,643 - 1,402,643 - - Sales tax General purposes 13,418,742 - 13,418,742 - - Selective purposes 9,323,065 - 9,323,065 - - Other taxes General purposes 6,975,000 - 6,975,000 - - Investment revenues 669,909 - 669,909 28,136 17,954 Miscellaneous 1,168,245 846,593 2,014,838 83,865 21,263 Transfers, net 4,781,500 [4,781,500] --- Subtotal general revenues 50,110,834 [3,934,907] 46,175,927 112,001 2,410,680 Change in net position 4,902,352 3,168,566 8,070,918 [95,415] 403,652 Net position - beginning 133,451,840 90,383,255 223,835,095 6,872,673 22,099,133 Prior period adjustment 4,322 -4,322 -- Net position - beginning, restated 133,456,162 90,383,255 223,839,417 6,872,673 22,099,133 Net position - ending 138,358,514$93,551,821$ 231,910,335$6,777,258$22,502,785$ Changes in Net Position Component UnitsPrimary GovernmentProgram Revenues CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 Net [Expenses] Revenue and The notes to the basic financial statements are an integral part of this statement. 17 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments 8,106,861$ 853$ 1,910,307$ 2,712,288$ Restricted cash - - - - Receivables (net) Accounts 1,628,614 450,217 - - Taxes 10,430,287 - 327,922 - Interest 9,518 - - - Inventory 211,986 - - - Due from other funds ---- Total assets 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 708,270$ -$ 45,246$ 139,896$ Retainage payable - - 2,005 166,517 Temporary notes payable - - - - Due to other funds ---- Total liabilities 708,270 -47,251 306,413 Deferred inflows of resources Unavailable revenue - property taxes 10,236,618 - - - Unavailable revenue - other 135,204 --- Total deferred inflows of resources 10,371,822 --- Fund balance: Nonspendable 211,986 - - - Restricted - 451,070 2,120,391 - Committed - - - 1,666,423 Assigned 273,808 - 70,587 739,452 Unassigned 8,821,380 --- Total fund balances 9,307,174 451,070 2,190,978 2,405,875 Total liabilities, deferred inflows of resources and fund balances 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds 1,949,346$ 1,089,325$ 7,314,875$ 8,148$ 4,861,928$ 27,953,931$ - - - 907,687 - 907,687 - - - 864,660 2,012 2,945,503 - 3,105,131 - - - 13,863,340 -----9,518 -----211,986 --349,515 --349,515 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ -$-$ 2,455,027$ -$ 193,423$ 3,541,862$ - - 1,691,417 120,559 - 1,980,498 - - 11,170,000 - - 11,170,000 ---349,515 -349,515 --15,316,444 470,074 193,423 17,041,875 - 3,052,038 --- 13,288,656 -----135,204 -3,052,038 ---13,423,860 -----211,986 - 1,142,418 - - 1,509,770 5,223,649 1,941,623 - 152,576 1,310,421 3,015,015 8,086,058 7,723 - - - 145,732 1,237,302 --[7,804,630] --1,016,750 1,949,346 1,142,418 [7,652,054] 1,310,421 4,670,517 15,775,745 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ The notes to the basic financial statements are an integral part of this statement. 18 Total Governmental Fund Balances 15,775,745$ Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs 71,376 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 349,234,538 Accumulated depreciation is 126,991,328 222,243,210 Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position.4,976,291 Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position.[1,479,693] Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [864,660] An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. 2,565,728 The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences 2,754,631 Net OPEB obligation 3,460,931 Net pension liability 28,812,538 Bonds payable 57,623,908 Loans payable 12,199,016 Accrued interest on the bonds 78,459 [104,929,483] Net Position of Governmental Activities 138,358,514$ CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 19 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes 9,561,490$ -$-$-$ Delinquent taxes 146,298 - - - Motor vehicle taxes 1,093,438 - - - General sales taxes 13,418,742 - - - Selective sales taxes - - - 8,500,559 Other taxes 5,086,492 1,888,508 - - Intergovernmental 1,351,967 - 1,433,830 - Special assessments - - - - Licenses and permits - - - - Charges for services 5,816,485 - - - Investment revenue 613,249 - - - Donations - - - - Miscellaneous 690,676 -432,910 - Total revenues 37,778,837 1,888,508 1,866,740 8,500,559 EXPENDITURES: Current General government 4,581,505 - - - Public safety 23,692,445 - - - Public works 5,473,414 - 406,058 - Public health and sanitation 816,636 - - - Culture and recreation 4,379,441 - - - Planning and development 836,690 1,046,945 - - Miscellaneous - - - - Capital outlay 985,861 - 962,163 4,733,263 Debt service Principal retirement - - - - Interest and other charges ---- Total expenditures 40,765,992 1,046,945 1,368,221 4,733,263 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses][2,987,155] 841,563 498,519 3,767,296 OTHER FINANCING SOURCES [USES] Issuance of bonds - - - - Issuance of temporary notes - - - - Bond premium - - - - Capital contribution - - - - Transfers in 6,449,500 - 160,000 - Transfers [out][897,748] [848,875] -[3,326,350] Total other financing sources [uses]5,551,752 [848,875] 160,000 [3,326,350] Net change in fund balance 2,564,597 [7,312] 658,519 440,946 Fund balance - Beginning of year 6,742,577 458,382 1,532,459 1,984,324 Prior period adjustment ---[19,395] Fund balance - Beginning of year, restated 6,742,577 458,382 1,532,459 1,964,929 Fund balance - End of year 9,307,174$ 451,070$ 2,190,978$ 2,405,875$ CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds -$ 2,620,653$ -$-$-$ 12,182,143$ - 43,289 --- 189,587 - 309,205 --- 1,402,643 -----13,418,742 ----822,506 9,323,065 -----6,975,000 ----1,787,565 4,573,362 - 1,540,285 55,845 -- 1,596,130 ----4,500 4,500 --- 492,917 494,470 6,803,872 20,767 -- 6,460 29,433 669,909 ----90,084 90,084 -94,519 282,720 -43,956 1,544,781 20,767 4,607,951 338,565 499,377 3,272,514 58,773,818 -----4,581,505 -----23,692,445 ----256,444 6,135,916 ----303,950 1,120,586 ----1,667,994 6,047,435 --- 31,600 396,101 2,311,336 ----3535 207,547 - 13,751,490 175,278 1,096,882 21,912,484 - 5,413,015 4,725,999 - 185,000 10,324,014 -1,536,834 352,011 200,044 47,278 2,136,167 207,547 6,949,849 18,829,500 406,922 3,953,684 78,261,923 [186,780] [2,341,898] [18,490,935] 92,455 [681,170] [19,488,105] -- 11,090,000 -- 11,090,000 ------ -- 442,878 -- 442,878 ------ - 1,632,958 -- 1,472,014 9,714,472 -----[5,072,973] -1,632,958 11,532,878 -1,472,014 16,174,377 [186,780] [708,940] [6,958,057] 92,455 790,844 [3,313,728] 2,136,126 1,851,358 [693,997] 1,217,966 3,861,345 19,090,540 ----18,328 [1,067] 2,136,126 1,851,358 [693,997] 1,217,966 3,879,673 19,089,473 1,949,346$ 1,142,418$ [7,652,054]$ 1,310,421$ 4,670,517$ 15,775,745$ The notes to the basic financial statements are an integral part of this statement. 20 Total Net Change In Fund Balances - Governmental Funds [3,313,728]$ Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets [8,190] Capital outlays 17,835,539 Depreciation expense [6,240,802] 11,586,547 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. 29,485 An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. 1,597,174 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [834,660] Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.[29,980] Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. [999,728] Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. [17,550,023] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities.14,417,265 Changes In Net Position of Governmental Activities 4,902,352$ CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 21 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) GENERAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 9,561,490$ 9,582,319$ 9,582,319$ [20,829]$ Delinquent taxes 146,298 160,000 160,000 [13,702] Motor vehicle taxes 1,073,265 1,008,720 1,008,720 64,545 General sales tax 13,418,742 13,829,194 13,829,194 [410,452] Other taxes 6,286,492 7,085,901 7,085,901 [799,409] Intergovernmental 1,351,967 1,135,255 1,135,255 216,712 Charges for services 4,051,536 5,907,154 5,907,154 [1,855,618] Investment revenue 892,731 10,000 10,000 882,731 Miscellaneous 690,673 632,907 632,907 57,766 Total revenues 37,473,194 39,351,450 39,351,450 [1,878,256] Expenditures General government 4,456,184 3,523,226 3,523,226 [932,958] Public safety 22,165,691 21,044,550 21,044,550 [1,121,141] Public works 5,524,886 5,652,826 5,652,826 127,940 Public health and sanitation 816,636 - - [816,636] Culture and recreation 4,375,589 5,361,919 5,361,919 986,330 Planning and development 1,069,690 3,437,251 3,437,251 2,367,561 Capital outlay 713,625 6,985,000 6,985,000 6,271,375 Total expenditures 39,122,301 46,004,772 46,004,772 6,882,471 Excess [deficiency] of revenues over [under] expenditures [1,649,107] [6,653,322] [6,653,322] 5,004,215 Other financing sources [uses] Transfers in 5,249,500 3,841,500 3,841,500 1,408,000 Transfers [out][897,748] [3,076,760] [3,076,760] 2,179,012 Total other financing sources [uses]4,351,752 764,740 764,740 3,587,012 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 2,702,645 [5,888,582] [5,888,582] 8,591,227 Unreserved fund balance, January 1 4,286,934 5,983,397 5,983,397 [1,696,463] Unreserved fund balance, December 31 6,989,579 94,815$ 94,815$ 6,894,764$ Reconciliation to GAAP Interest receivable 9,518 Accounts receivable 1,628,614 Taxes receivable 10,430,287 Inventory 211,986 Deferred revenue [10,236,618] Current year encumbrances 273,808 GAAP Fund Balance, December 31 9,307,174$ Budgeted Amounts See independent auditor's report on the financial statements. 22 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Other taxes 1,895,820$ 1,656,562$ 1,895,900$ [80]$ Investment revenue -150 -- Total revenues 1,895,820 1,656,712 1,895,900 [80] Expenditures Planning and development 1,046,945 914,818 1,046,945 - Total expenditures 1,046,945 914,818 1,046,945 - Excess [deficiency] of revenues over [under] expenditures 848,875 741,894 848,955 [80] Other financing sources [uses] Transfers [out][848,875][741,744][848,875]- Total other financing sources [uses][848,875][741,744][848,875]- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] - 150 80 [80] Unreserved fund balance, January 1 853 63,187 853 - Unreserved fund balance, December 31 853 63,337$ 933$ [80]$ Reconciliation to GAAP Accounts receivable 450,217 GAAP Fund Balance, December 31 451,070$ Budgeted Amounts See independent auditor's report on the financial statements. 23 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 1,426,232$ 1,417,590$ 1,417,590$ 8,642$ Miscellaneous 432,910 - - 432,910 Investment revenue -3,000 3,000 [3,000] Total revenues 1,859,142 1,420,590 1,420,590 438,552 Expenditures Public works 406,058 525,830 525,830 119,772 Capital outlay 859,528 946,243 946,243 86,715 Total expenditures 1,265,586 1,472,073 1,472,073 206,487 Excess [deficiency] of revenues over [under] expenditures 593,556 [51,483][51,483]645,039 Other financing sources [uses] Transfers in 160,000 160,000 160,000 - Total other financing sources [uses]160,000 160,000 160,000 - Excess [deficiency] of revenues and other sources over [under] 753,556 108,517 108,517 645,039 expenditures and other [uses] Unreserved fund balance, January 1 1,038,913 899,157 899,157 139,756 Unreserved fund balance, December 31 1,792,469 1,007,674$ 1,007,674$ 784,795$ Reconciliation to GAAP Taxes receivable 327,922 Current year encumbrances 70,587 GAAP Fund Balance, December 31 2,190,978$ Budgeted Amounts See independent auditor's report on the financial statements. 24 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Selective sales taxes 8,500,559$ 8,758,780$ 8,758,780$ [258,221]$ Investment revenue -5,000 5,000 [5,000] Total revenues 8,500,559 8,763,780 8,763,780 [263,221] Expenditures Capital outlay 4,944,758 6,541,080 6,541,080 1,596,322 Total expenditures 4,944,758 6,541,080 6,541,080 1,596,322 Excess [deficiency] of revenues over [under] expenditures 3,555,801 2,222,700 2,222,700 1,333,101 Other financing sources [uses] Transfers [out][3,326,350][3,073,878][3,073,878][252,472] Total other financing sources [uses][3,326,350][3,073,878][3,073,878][252,472] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 229,451 [851,178] [851,178] 1,080,629 Unreserved fund balance, January 1 1,436,972 1,763,089 1,763,089 [326,117] Unreserved fund balance, December 31 1,666,423 911,911$ 911,911$ 754,512$ Reconciliation to GAAP Current year encumbrances 739,452 GAAP Fund Balance, December 31 2,405,875$ Budgeted Amounts See independent auditor's report on the financial statements. 25 Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources:Disposal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments 6,874,432$ 26,289,593$ 1,754,760$ 38,143$ 34,956,928$ 3,452,453$ Receivables (net of allowance for uncollectibles) Accounts 198,322 1,578,182 257,378 - 2,033,882 - Interest 16 - - - 16 - Inventory and prepaid supplies -439,223 -38,421 477,644 127,892 Total current assets 7,072,770 28,306,998 2,012,138 76,564 37,468,470 3,580,345 Capital assets: Nondepreciable capital assets: Construction in progress - 7,526,968 - - 7,526,968 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 11,313,026 147,231,395 2,564,420 1,253,071 162,361,912 168,234 Less: accumulated depreciation 10,498,484 58,491,492 1,399,557 806,363 71,195,896 153,601 Total capital assets 1,496,542 97,956,205 1,164,863 461,708 101,079,318 14,633 Total assets 8,569,312 126,263,203 3,177,001 538,272 138,547,788 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 4,248 29,737 7,080 2,832 43,897 2,832 OPEB deferred outflows of resources 969 5,001 1,500 449 7,919 - Pension deferred outflows of resources 61,369 326,317 75,354 21,240 484,280 22,769 Deferred charge on bond issuance -9,925 --9,925 - Total deferred outflows of resources 66,586 370,980 83,934 24,521 546,021 25,601 Total assets and deferred outflows of resources 8,635,898$ 126,634,183$ 3,260,935$562,793$ 139,093,809$ 3,620,579$ Liabilities and deferred inflows of resources: Current liabilities Accounts payable 26,442$ 388,113$ 29,160$ 4,479$ 448,194$ 46,410$ Retainage payable - 153,409 -- 153,409 - Interest payable 5,262 320,614 -- 325,876 - Meter deposits payable - 229,447 -- 229,447 - Current portion of compensated absences payable 36,027 273,585 107,850 61,090 478,552 22,917 Current portion of accrued claims payable ----- 649,172 Current portion of loans payable - 539,863 -- 539,863 - Current portion of general obligation bonds payable 35,000 653,388 -- 688,388 - Current portion of revenue bonds payable -715,000 --715,000 - Total current liabilities 102,731 3,273,419 137,010 65,569 3,578,729 718,499 Noncurrent liabilities: Compensated absences payable 13,407 101,811 40,135 22,734 178,087 8,529 Accrued claims payable ----- 151,818 OPEB obligation 48,676 251,125 75,310 22,569 397,680 - KPERS OPEB obligation 15,192 106,343 25,320 10,128 156,983 10,128 Net pension liability 383,854 2,076,508 527,697 160,067 3,148,126 156,268 Payable from restricted assets Loans payable - 21,999,823 -- 21,999,823 - General obligation bonds payable 355,000 3,073,127 -- 3,428,127 - Revenue bonds payable - 10,407,175 -- 10,407,175 - Landfill post-closure care liabilities 2,048,896 ---2,048,896 - Total noncurrent liabilities 2,865,025 38,015,912 668,462 215,498 41,764,897 326,743 Total liabilities 2,967,756 41,289,331 805,472 281,067 45,343,626 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources 2,913 20,388 4,854 1,942 30,097 1,942 OPEB deferred inflows of resources 2,282 11,774 3,531 1,058 18,645 - Pension deferred inflows of resources 22,469 93,911 26,326 6,914 149,620 7,667 Total deferred inflows of resources 27,664 126,073 34,711 9,914 198,362 9,609 Total liabilities and deferred inflows of resources 2,995,420$ 41,415,404$ 840,183$ 290,981$ 45,541,988$ 1,054,851$ Net position Net investment in capital assets 1,106,542$ 60,567,829$ 1,164,863$ 461,708$ 63,300,942$ 14,633$ Restricted Restricted for bond retirement - 1,367,894 - - 1,367,894 - Unrestricted 4,533,936 23,283,056 1,255,889 [189,896] 28,882,985 2,551,095 Total net position 5,640,478$ 85,218,779$ 2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 26 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Operating revenues Charges for services 3,082,199$ 20,255,017$ 3,275,987$ 809,636$ 27,422,839$ 7,798,835$ Miscellaneous 416,369 332,662 -97,562 846,593 60,303 Total operating revenues 3,498,568 20,587,679 3,275,987 907,198 28,269,432 7,859,138 Operating expenses General government - - - - - 8,982,331 Public works 1,995,726 9,678,876 2,090,924 - 13,765,526 - Recreation - - - 840,279 840,279 - Depreciation 853,537 3,333,943 174,722 48,215 4,410,417 7,699 Total operating expenses 2,849,263 13,012,819 2,265,646 888,494 19,016,222 8,990,030 Operating income [loss]649,305 7,574,860 1,010,341 18,704 9,253,210 [1,130,892] Nonoperating revenues [expenses] Interest expense [22,205] [1,129,127] - - [1,151,332] - Accretion of bond premium - 55,915 - - 55,915 - Amortization of bond issuance costs -[207,727]--[207,727] - Total nonoperating revenues [expenses][22,205] [1,280,939] --[1,303,144] - Income [loss] before transfers 627,100 6,293,921 1,010,341 18,704 7,950,066 [1,130,892] Transfers from [to] other funds Transfers in ----- 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Total transfers [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Change in net position [12,900] 2,643,921 518,841 18,704 3,168,566 [990,892] Net position, January 1 5,653,378 82,580,128 1,896,641 253,108 90,383,255 3,556,620 Prior period adjustment -[5,270]5,270 --- Net position, January 1, restated 5,653,378 82,574,858 1,901,911 253,108 90,383,255 3,556,620 Net position, December 31 5,640,478$ 85,218,779$2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Cash flows from operating activities Cash received from customers and users 3,073,363$ 20,427,626$ 3,272,401$ 809,636$ 27,583,026$ 7,980,067$ Cash paid to suppliers of goods or services [1,264,517] [5,412,123] [1,144,660] [315,480] [8,136,780] [8,734,446] Cash paid to employees [677,451] [4,192,802] [926,570] [535,122] [6,331,945] [288,556] Other operating receipts 416,369 332,662 -97,562 846,593 60,303 Net cash provided by [used in] operating activities 1,547,764 11,155,363 1,201,171 56,596 13,960,894 [982,632] Cash flows from capital and related financing activities Purchase and construction of capital assets - [13,963,235] [453,771] [99,848] [14,516,854] - Proceeds from bonds - 10,330,000 - - 10,330,000 - Proceeds from loans - 12,434,835 - - 12,434,835 - Principal payments - loans - [527,499] - - [527,499] - Principal payments - general obligation bonds [390,000] [768,198] - - [1,158,198] - Principal payments - revenue bonds - [11,850,000] - - [11,850,000] - Interest paid [22,918] [1,051,885] --[1,074,803]- Net cash provided by [used in] capital and related financing activities [412,918] [5,395,982] [453,771] [99,848] [6,362,519] - Cash flows from investing activities Interest received ------ Cash flows from noncapital financing activities Transfers in - - - - - 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Net cash provided by [used in] noncapital financing activities [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Net increase [decrease] in cash and cash equivalents 494,846 2,109,381 255,900 [43,252] 2,816,875 [842,632] Cash and cash equivalents, January 1 6,379,586 24,185,482 1,493,590 81,395 32,140,053 4,295,085 Prior period adjustment -[5,270]5,270 --- Cash and cash equivalents, January 1, restated 6,379,586 24,180,212 1,498,860 81,395 32,140,053 4,295,085 Cash and cash equivalents, December 31 6,874,432$26,289,593$1,754,760$38,143$ 34,956,928$3,452,453$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 PROPRIETARY FUNDS The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] 649,305$ 7,574,860$ 1,010,341$ 18,704$ 9,253,210$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 853,537 3,333,943 174,722 48,215 4,410,417 7,699 [Increase] decrease in accounts receivable [8,836] 127,020 [3,586] - 114,598 - [Increase] decrease in inventory - 7,848 - [3,944] 3,904 [16,406] [Increase] decrease in deferred outflows 5,290 31,955 7,902 2,920 48,067 1,085 Increase [decrease] in accounts payable 2,199 108,818 3,706 [14,751] 99,972 [1,962] Increase [decrease] in retainage payable - [73,568] - - [73,568] - Increase [decrease] in accrued compensated absences [21,204] [4,797] 7,606 5,517 [12,878] [27,942] Increase [decrease] in claims payable - - - - - 181,232 Increase [decrease] in net pension liability 3,546 22,496 5,297 1,969 33,308 1,719 Increase [decrease] in net KPERS OPEB obligation [1,216] [3,042] [2,026] [811] [7,095] 4,659 Increase [decrease] in net OPEB obligation 444 2,284 686 204 3,618 - Increase [decrease] in meter deposits payable - 45,589 -- 45,589 - Increase [decrease] in deferred inflows [2,699] [18,043][3,477] [1,427] [25,646][1,824] Net cash provided by [used in] operating activities 1,547,764$ 11,155,363$1,201,171$56,596$ 13,960,894$[982,632]$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 29 ASSETS Cash and investments 270,096$ Total assets 270,096$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable 270,096$ Total liabilities 270,096$ December 31, 2019 CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS The notes to the basic financial statements are an integral part of this statement. 30 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five-member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority - The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five- member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority’s basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina - The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2019. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) - SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the City of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 50l(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity’s administrative offices. Salina Airport Authority Housing Authority of Salina Field House 3237 Arnold Ave. the City of Salina QALICB, Inc. Salina, KS 469 S. 5th 300 W. Ast St. Salina, KS Salina, KS Joint Ventures The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) (Kansas Regulatory Basis) Building Authority (Audited) Total unencumbered cash, December 31, 2019 1,596,458$ Total change in unencumbered cash, year ended December 31, 2019 301,873 Total cash receipts, year ended December 31, 2019 1,533,357 Total cash receipts from City of Salina 480,585 Complete financial statements for the joint venture may be obtained at the entity’s administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City’s governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues,are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C.Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure- driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker’s compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General Fund -To account for resources traditionally associated with government, which are not required legally,or by sound financial management to be accounted for in another fund. Tourism and Convention Fund - To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special Gas Fund - To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance,or improvement of streets within the City. Sales Tax Capital Fund - To account for 58% of the 1.25 cent sales tax designated for capital, debt, and human services purposes. Schilling Capital Improvement Fund - To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt Service Fund - To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital Projects Fund - To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB Fund - To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation Fund - To account for the operations of the City's refuse collection service. Solid Waste Disposal Fund - To account for the activities of the City's landfill. Golf Course Fund - To account for the operations of the municipal golf course. Water and Sewer Fund - To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1.Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type’s portion of this pool is displayed in the financial statements as “Cash and Investments.” The city’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2.Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2020. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance and Net Position (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer’s office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 50 Other equipment 5 -15 Vehicles 6 -10 Infrastructure 30 -50 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8.Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management’s intent to be used for specific purposes but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Governmental Governmental General Convention Gas Capital Improvement Service Projects QalicB Funds Funds Fund Balances: Nonspendable for: Inventory 211,986$ -$ -$ -$ -$-$ -$ -$ -$ 211,986$ Restricted for: Public works -- 2,120,391 - - - - -- 2,120,391 Public health and sanitation -- -- - - - - 234 234 Culture and recreation -- -- - - - - 348,866 348,866 Planning and development -451,070 -- - - -- 221,075 672,145 Debt payments -- -- -1,142,418 -- 939,595 2,082,013 Committed for: Public safety -- -- - - - - 351,372 351,372 Culture and recreation -- -- - - - - 587,642 587,642 Planning and development -- -- - - - 1,310,421 256,847 1,567,268 Cemetery -- -- - - - - 521,641 521,641 Capital improvements -- -1,666,423 1,941,623 -152,576 -1,297,513 5,058,135 Assigned for: General government 20,255 - - - - - - - - 20,255 Public safety -- -- - - - - 145,732 145,732 Public works 19,000 - - - - - - - - 19,000 Culture and recreation 1,553 - - - - - - - - 1,553 Capital improvements 233,000 - 70,587 739,452 7,723 - - - - 1,050,762 Unassigned:8,821,380 - - - - - [7,804,630] - - 1,016,750 Total Fund Balances 9,307,174$451,070$2,190,978$2,405,875$1,949,346$1,142,418$[7,652,054]$1,310,421$4,670,517$ 15,775,745$ Major Governmental Funds 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, changes in the pension and OPEB plan liability proportion and assumptions, net difference between projected and actual earnings on pension plan and OPEB plan investments and differences between pension and OPEB plan liability expected and actual experience are reported as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue – property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, differences between expected and actual experience, changes in assumptions, and changes in the pension liability and OPEB plan proportion are reported as deferred inflows. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11.Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2019 budget was amended for the Sales Tax Economic Development, Tourism and Convention, Special Alcohol and Health Insurance funds. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners’ Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25.At December 31, 2019, the statutory limit for the City was $152,724,804, providing a debt margin of $85,059,351. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2019, management discovered certain errors that occurred in the prior year. The effects of these items caused a restatement to net position or fund balance as follows: Sales Tax Police Water and Governmental Capital Grants Sewer Sanitation Activities Fund Fund Fund Fund Net Position/Fund Balance, 133,451,840$ 1,984,324$ [24,544]$ 82,580,128$ 1,896,641$ December 31, 2018 Prior Period Adjustment 4,322 [19,395]18,328 [5,270] 5,270 Net Position/Fund Balance, December 31, 2018, Restated 133,456,162$1,964,929$[6,216]$ 82,574,858$1,901,911$ Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City’s cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City’s investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody’s investors service or Standard and Poor’s corporation, and various other investments as specified in KSA 10-131. At December 31, 2019, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Investment Pool 317,303$ S&P AAAf/S1+ Total fair value 317,303$ The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City’s investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’s deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31, 2019 the City’s deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31, 2019, the balance of the construction account, Interest Reserve, and Operating Reserve was $495,071, $286,100, and $126,516, respectively. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt SFH Other General Convention Gas Service QalicB Governmental Subtotal Primary Government Receivables: Accounts 7,109,224$ 450,217$ -$ -$864,660$ 3,216$ 8,427,317$ Taxes 10,430,287 - 327,922 3,105,131 --13,863,340 Interest 9,517 -----9,517 Gross receivables 17,549,028 450,217 327,922 3,105,131 864,660 3,216 22,300,174 Less: allowance for uncollectibles [5,480,609] ----[1,204] [5,481,813] Total 12,068,419$ 450,217$ 327,922$ 3,105,131$ 864,660$ 2,012$ 16,818,361$ Solid Water Waste and Disposal Sewer Sanitation Total Primary Government Receivables: Accounts 198,322$ 2,861,380$ 466,648$ 11,953,667$ Taxes ---13,863,340 Interest 16 --9,533 Gross receivables 198,338 2,861,380 466,648 25,826,540 Less: allowance for uncollectibles -[1,283,198][209,270] [6,974,281] Total 198,338$ 1,578,182$ 257,378$ 18,852,259$ Component Units Salina Airport Authority Accounts 99,749$ Grants 750,000 Less: allowance for uncollectibles [1,500] Total Salina Airport Authority 848,249 Salina Housing Authority Accounts 12,347 Less: allowance for uncollectibles [986] Interest 798 Total Salina Housing Authority 12,159 Total 860,408$ C. Interfund Receivables and Payables The composition of interfund balances as of December 31, 2019, is as follows: Fund Types Due From Due To Capital Project Fund 349,515$ -$ SFH QalicB Fund -349,515 349,515$ 349,515$ The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2019, was as follows: Balance Adj. Bal.Balance 12/31/2018 Adjustments 12/31/2018 Additions Retirements 12/31/2019 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress 32,217,207$ -$32,217,207$ 17,029,601$ 4,019,079$ 45,227,729$ Land 24,093,535 -24,093,535 130,000 -24,223,535 Leased land under capital lease 422,799 -422,799 --422,799 Capital assets, being depreciated Infrastructure 204,630,178 -204,630,178 3,878,632 -208,508,810 Buildings and improvements 53,014,858 -53,014,858 144,088 -53,158,946 Vehicles 10,191,330 -10,191,330 575,032 542,068 10,224,294 Equipment, furniture and fixtures 7,118,105 5,389 7,123,494 216,528 60,746 7,279,276 Leasehold improvements 326,193 -326,193 31,190 -357,383 Total capital assets 332,014,205 5,389 332,019,594 22,005,071 4,621,893 349,402,772 Less accumulated depreciation for: Infrastructure 88,265,257 -88,265,257 3,979,608 -92,244,865 Buildings and improvements 21,255,995 -21,255,995 1,346,879 -22,602,874 Vehicles 7,233,567 -7,233,567 670,702 533,878 7,370,391 Equipment, furniture and fixtures 4,743,932 -4,743,932 243,613 60,746 4,926,799 Total accumulated depreciation 121,498,751 -121,498,751 6,240,802 594,624 127,144,929 Governmental activities capital assets, net 210,515,454$ 5,389$ 210,520,843$ 15,764,269$ 4,027,269$ 222,257,843$ Business-type activities: Capital assets, not being depreciated Construction in progress 4,171,178$ -$4,171,178$ 14,352,812$ 10,997,022$ 7,526,968$ Land 2,059,834 -2,059,834 326,500 -2,386,334 Capital assets, being depreciated Infrastructure 119,170,313 -119,170,313 10,997,022 -130,167,335 Buildings and improvements 22,579,936 -22,579,936 --22,579,936 Vehicles 3,819,646 -3,819,646 310,539 267,147 3,863,038 Equipment, furniture and fixtures 5,570,277 13,164 5,583,441 306,011 137,849 5,751,603 Total capital assets 157,371,184 13,164 157,384,348 26,292,884 11,402,018 172,275,214 Less accumulated depreciation for: Infrastructure 46,858,117 -46,858,117 3,485,597 -50,343,714 Buildings and improvements 13,639,506 -13,639,506 421,287 -14,060,793 Vehicles 2,611,814 -2,611,814 230,626 267,146 2,575,294 Equipment, furniture and fixtures 4,081,039 -4,081,039 272,905 137,849 4,216,095 Total accumulated depreciation 67,190,476 -67,190,476 4,410,415 404,995 71,195,896 Business-type activities capital assets, net 90,180,708$ 13,164$ 90,193,872$ 21,882,469$ 10,997,023$ 101,079,318$ 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D.Capital Assets (Continued) The City’s depreciation expense was charged to governmental functions as follows: Governmental Activities: General government 74,670$ Public safety 656,346 Public works 4,334,423 Public health 31,110 Culture and recreation 810,779 Planning and development 333,474 Total depreciation 6,240,802$ Business-type Activities: Solid Waste Disposal 853,537$ Water and Sewer 3,333,941 Sanitation 174,722 Golf Course Division 48,215 Total depreciation 4,410,415$ E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2019: Restated Balance Balance Amounts January 1, December 31, Due Within 2019 Additions Deletions 2019 One Year Governmental activities: General obligation bonds 51,968,310$ 11,532,878$ 5,877,280$ 57,623,908$ 4,474,480$ Loans payable 12,185,053 13,963 -12,199,016 - OPEB liability 3,093,240 333,365 304,958 3,121,647 - KPERS OPEB liability 382,848 52,116 85,552 349,412 - Net pension liability 27,918,983 1,049,823 -28,968,806 - Accrued compensation 2,815,485 2,001,057 2,030,465 2,786,077 2,030,465 Temporary notes 18,123,505 11,170,000 18,123,505 11,170,000 11,170,000 Total 116,487,424$ 26,153,202$ 26,421,760$ 116,218,866$ 17,674,945$ Business-type activities: General obligation bonds 5,282,578$ -$1,166,063$ 4,116,515$ 688,388$ Revenue bonds 11,898,051 11,122,175 11,898,051 11,122,175 715,000 Loans payable 10,632,351 12,434,834 527,499 22,539,686 539,863 OPEB liability 394,062 42,469 38,851 397,680 - KPERS OPEB liability 164,078 23,414 30,509 156,983 - Net pension liability 3,114,818 33,308 -3,148,126 - Accrued compensation 669,517 465,674 478,552 656,639 478,552 Total 32,155,455$ 24,121,874$ 14,139,525$ 42,137,804$ 2,421,803$ Component Units: General obligation bonds 21,427,000$ 6,380,000$ 5,382,000$ 22,425,000$ 1,425,000$ Less unamortized discount [64,208]-[46,505][17,703]- Special assessment debt 7,054 -2,249 4,805 2,350 KPERS OPEB obligation 11,126 2,212 - 13,338 - Net pension liability 605,630 27,226 -632,856 - Total component units 21,986,602$ 6,409,438$ 5,337,744$ 23,058,296$ 1,427,350$ 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City’s long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government Original Interest Bonds General Obligation Bonds Issue Rates Outstanding Internal Improvements 2008B, due 7/1/2028 3,525,000$ 3.65% to 5.00% 850,000$ Internal Improvements 2009A, due 10/1/2029 23,695,000 2.00% to 5.00% 663,468 Internal Improvements 2010A, due 10/1/2025 6,916,592 2.00% to 3.875% 332,772 Internal Improvements 2010B, due 10/1/2023 7,973,044 0.50% to 3.00% 1,204,781 Internal Improvements 2011A, due 10/1/2031 6,587,985 2.00% to 5.00% 742,300 Internal Improvements 2012A, due 10/1/2027 2,383,903 1.00% to 2.45% 1,350,082 Refunding 2012B, due 10/1/2020 3,817,108 1.00% to 1.40% 184,014 Internal Improvements 2013A, due 10/1/28 1,369,380 3.00% to 4.00% 910,630 Internal Improvements 2013B, due 10/1/33 4,485,073 0.60% to 3.65% 3,028,550 Internal Improvements 2014A, due 10/1/34 7,839,050 2.50% to 3.75% 4,801,789 Improvement and Refunding 2015A, due 10/1/35 7,157,688 2.00% to 4.00% 5,781,152 Internal Improvements 2016A, due 10/1/36 6,681,766 2.00% to 3.00% 5,880,002 Refunding 2016B, due 10/1/2031 15,141,004 2.00% to 5.00% 13,622,290 Internal Improvements 2017A, due 10/1/37 9,388,370 3.00% to 3.375% 8,815,534 Internal Improvements 2018A, due 10/1/33 2,090,000 3.15% to 4.00% 2,040,180 Internal Improvements 2019A, due 10/1/39 11,090,000 3.00% to 4.00% 11,532,878 Total general obligation bonds 61,740,422$ Revenue Bonds Revenue & Refunding 2019, due 10/1/31 11,122,175$ 3.00% 11,122,175$ Total revenue bonds 11,122,175$ Temporary Notes Series 2019-1, due 5/1/20 6,085,000$ 1.58% 6,085,000$ Series 2019-2, due 7/1/20 5,085,000 2.07% 5,085,000 Total temporary notes 11,170,000$ Loans Payable Kansas Public Water Supply, due 8/1/34 9,330,000$ 2.12% 6,411,458$ Kansas Public Water Supply, due 8/1/35 4,250,000 2.78% 3,693,394 Kansas Public Water Supply, due 2/1/40 32,000,000 2.33% 10,396,098 Kansas Public Water Supply, due 2/1/40 4,250,000 2.33% 1,933,592 Kansas Water Pollution Control, due 3/1/35 2,250,000 2.54% 105,145 Dakotas & CNMC Notes, due 12/10/50 12,640,000 1.58% 12,199,016 Total loans payable 34,738,703$ 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Original Interest Bonds Issue Rates Outstanding Component Unit Salina Airport Authority General Obligation Debt General Obligation 2015A, due 2025 3,075,000$ 2.67% 1,180,000$ General Obligation 2017A, due 2030 10,255,000 3.04% 10,080,000 General Obligation 2017B, due 2025 4,835,000 3.02% 4,785,000 General Obligation 2019A, due 2029 675,000 2.78% 675,000 General Obligation 2019B, due 2023 3,455,000 2.92% 3,455,000 General Obligation Temporary Notes 2019-1, due 2021 2,250,000 2.50% 2,250,000 Less unamortized bond premium 28,069 Less unamortized bond discount [45,772] Total general obligation bonds 22,407,297 Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 27,599 4.47%4,805 Total special assessment debt 4,805 Total 22,412,102$ Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: Bonds I nterest Year Outstanding Due Total 2020 5,162,867$ 1,997,278$ 7,160,145$ 2021 5,057,615 1,692,386 6,750,001 2022 5,156,464 1,522,892 6,679,356 2023 5,016,465 1,330,541 6,347,006 2024 4,642,769 1,141,818 5,784,587 2025-2029 18,285,702 4,074,605 22,360,307 2030-2034 12,178,959 1,985,377 14,164,336 2035-2037 6,239,581 468,338 6,707,919 Total 61,740,422$ 14,213,235$ 75,953,657$ General Obligation - Primary Government 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Bonds I nterest Year Outstanding Due Total 2020 1,425,000$ 662,126$ 2,087,126$ 2021 3,730,000 605,838 4,335,838 2022 1,525,000 508,668 2,033,668 2023 1,565,000 467,940 2,032,940 2024 1,615,000 424,235 2,039,235 2025 - 2029 8,805,000 1,410,175 10,215,175 2030 - 2031 3,760,000 174,475 3,934,475 Total 22,425,000$ 4,253,457$ 26,678,457$ General Obligation - Component Units Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Bonds I nterest Year Outstanding Due Total 2020 781,015$ 327,117$ 1,108,132$ 2021 816,015 288,450 1,104,465 2022 841,015 265,950 1,106,965 2023 861,015 242,700 1,103,715 2024 886,015 218,850 1,104,865 2025-2029 4,820,072 710,100 5,530,172 2030-2031 2,117,028 89,700 2,206,728 Total 11,122,175$ 2,142,867$ 13,265,042$ Revenue Bonds - Primary Government Annual debt service requirements to maturity for temporary notes - to be paid through the issuance of general obligation bonds: Notes Interest Year Outstanding Due Total 2020 11,170,000$ 172,417$ 11,342,417$ Total 11,170,000$ 172,417$ 11,342,417$ Temporary Notes - Primary Government 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Kansas Public Water Supply Loans.The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Loans Interest Year Outstanding Due Total 2020 539,863$ 235,471$ 775,334 2021 552,523 222,811 775,334 2022 565,483 209,851 775,334 2023 578,754 196,580 775,334 2024 592,341 182,993 775,334 2025-2029 3,177,162 699,508 3,876,670 2030-2034 3,569,051 307,625 3,876,676 2035 529,675 18,533 548,208 Total 10,104,852$ 2,073,372$ 12,178,224$ Kansas Water Supply Loans - Primary Government During 2019, the City entered into additional loans with the Kansas Public Water Supply Fund and the Kansas Water Pollution Control Fund. The water supply loans allow the City to borrow up to $36,170,000 with a gross interest rate of 2.33%. The water pollution control loan allows the City to borrow up to $2,250,000 with a gross interest rate of 2.54%. Amortization schedules for the loans are not yet available since the loans have not been fully finalized. The purpose of the loans are to finance various water and sewer infrastructure projects throughout the City. Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $6,016,500. Dakotas Note B - On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,623,500. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) CNMC Note A - On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,674,000. CNMC Note B - On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $1,326,000. As of December 31, 2019, the principal balance of these four loans, net of $440,984 of unamortized debt issuance costs, was $12,199,016. Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Assessment Interest Year Outstanding Due Total 2020 2,350$ 215$2,565$ 2021 2,455 110 2,565 Total 4,805$ 325$5,130$ Special Assessment Debt - Component Units 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease.On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2019, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2019, rental income of $87,368 remained receivable from the City. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2019: 2020 130,000$ 2021 130,000 2022 130,000 2023 162,500 2024 227,500 2025-2029 2,827,500 2030-2034 3,250,000 2035-2039 3,250,000 2040-2044 3,250,000 2045-2046 975,000 14,332,500$ Ground Lease.On October 24, 2018, SFH QalicB entered into a lease agreement with Salina Regional Medical Education, LLC for the use of property for parking of passenger vehicles and non-commercial trucks (the Parking Lot) by the public. SFH QalicB will have the option to acquire the Parking Lot for $1 upon the end of the lease term, which is 100 years, as defined in the Ground Lease. A one-time basic rent payment of $250,000 was due on the commencement date. There are no additional minimum lease payments due. Sales tax and Revenue (STAR) Bonds.STAR Bonds are authorized to be issued pursuant to K.S.A. 12-17, 160, et seq., as amended (the STAR Bond Act). The STAR Bond Act provides a form of tax increment financing that enables the issuance of bonds payable from certain State and local sales and compensating use tax revenues and transient guest tax revenues generated from STAR bond projects constructed within a STAR bond project district. To implement STAR bond financing, a local government must adopt a resolution that specifies a proposed STAR bond project district’s boundary and describes the overall district plan, hold a public hearing on the district and plan, and pass a resolution that establishes the STAR bond project district. Additionally, there may be one or more projects within a STAR bond district. In accordance with the STAR Bond Act, the City has no liability for payment of bonds in the event that revenues received from sources noted above are inadequate to pay the debt incurred with the issuance of the STAR bonds. 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) In connection with the issuance of STAR bonds, the City of Salina and the State of Kansas enter into a Tax Distribution Agreement. The agreement provides that the principal of, accreted value, and interest on the STAR bonds will be paid proportionally by the City of Salina and the State of Kansas, based on each entity’s respective share of sales taxes generated within the district. These proportional shares may change in the future if the sales taxes assessed by the local or state governments are modified. On June 1, 2015, the City of Salina Commission adopted Ordinance 15-10776 establishing the district known as the Salina STAR Bond Project District. On August 22, 2016, the City held a public hearing and approved Ordinance 16-10856 adopting the STAR Bond Project Plan. On December 1, 2018, the City of Salina issued $18,250,000 in Senior Special Obligation Revenue Bonds (Series 2018-A) and $4,320,000 in Subordinate Special Obligation Revenue Bonds (Series 2018-B). As of December 31, 2019, the outstanding balances for the 2018-A and 2018-B were $18,250,000 and $4,320,000, respectively. F. Operating Leases On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City’s share of the lease agreement is 40% and will pay the lessor $1,100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2019. The future minimum lease payments for the lease are as follows: Year Amount 2020 93,926$ 2021 93,926 2022 93,926 2023 93,926 2024 93,926 2025-2027 281,779 Total principal and interest 751,409 Less: interest [95,149] Total principal 656,260$ G. Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General 6,449,500$ 897,748$ Tourism and Convention -848,873 Special Gas 160,000 - Sales Tax Capital -3,326,350 Debt Service 1,632,958 Other governmental funds 1,472,013 - Solid Waste Disposal -640,000 Water and Sewer -3,650,000 Sanitation -491,500 Central Garage 140,000 - Total transfers 9,854,471$ 9,854,471$ The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: o State/School employees o Local employees Police and Firemen Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member’s combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member’s lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 74-4921. All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2019. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Actuarial Statutory Employer Employer Rate Capped Rate Local employees 8.89% 8.89% Police and Firemen 22.13% 22.13% Member contribution rates as a percentage of eligible compensation for the fiscal year 2019 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: State/School Local Police and Firemen Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City’s share of the collective pension amounts as of December 31, 2019, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31, 2019. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2019, the City’s proportion for the Local employees group was 0.796%, which was an increase of .006% from its proportion measured at June 30, 2018. At June 30, 2019, the City’s proportion for the Police and Firemen group was 2.074%, which was a decrease of .007% from its proportion measured at June 30, 2018. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2019 and 2018, the City and its component units reported a liability of $32,116,932 and $31,984,657, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31, 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return Global Equity 47.00% 6.85% Fixed Income 13.00% 1.25% Yield driven 8.00% 6.55% Real Return 11.00% 1.71% Real estate 11.00% 5.05% Alternatives 8.00% 9.85% Short-term investments 2.00%-0.25% 100.00% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System’s Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate. The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%) than the current rate: 1% Decrease (6.75%)Discount Rate (7.75%)1% Increase (8.75%) Local 16,612,600$ 11,123,112$ 6,531,254$ Police & Firemen 29,791,754 20,993,820 13,628,262 Total 46,404,354$ 32,116,932$ 20,159,516$ Pension Expense. For the year ended December 31, 2019, the City recognized Local pension expense of $1,370,234 and Police and Firemen pension expense of $3,483,665, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority’s and Salina Airport Authority’s portion of the Local pension expense were $25,451 and $73,753, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 24,348$ 280,127$ Net differences between projected and actual earnings on investments 261,693 - Changes in assumptions 339,963 22,545 Changes in proportion 377,752 267,857 Total 1,003,756$ 570,529$ Deferred outflows Deferred inflows Police & Firemen of resources of resources Differences between actual and expected experience 1,186,018$ 38,909$ Net differences between projected and actual earnings on investments 422,552 - Changes in assumptions 743,686 23,244 Changes in proportion 36,289 792,896 Total 2,388,545$ 855,049$ 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2019, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Deferred outflows Deferred inflows Local of resources of resources of resources of resources Differences between actual and expected experience 1,198$ 9,400$ 1,385$ 15,938$ Net differences between projected and actual earnings on investments 7,761 - 14,889 - Changes in assumptions 14,366 1,598 19,342 1,283 Changes in proportion 1,145 4,793 59,996 19,497 Total 24,470$ 15,791$ 95,612$ 36,718$ Airport AuthorityHousing Authority $1,933,992 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2019 292,771$ 813,535$ 1,106,306$ 2020 [13,048] 196,519 183,471 2021 80,992 294,428 375,420 2022 73,350 221,173 294,523 2023 [838] 7,841 7,003 Total 433,227$ 1,533,496$ 1,966,723$ $37,624 and $36,310 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2020 9,773$ 22,167$ 31,940$ 2021 5,754 8,732 14,486 2022 [6,147] 17,687 11,540 2023 [609] 9,959 9,350 2024 [92] 349 257 Total 8,679$ 58,894$ 67,573$ 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers’ compensation. The program covers all City employees. Premiums are paid into the Workers’ Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $159,754 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2019 2018 Unpaid claims, January 1 238,778$ 221,913$ Incurred claims (including IBNRs)726,271 886,086 Claim payments [653,477] [869,221] Unpaid claims, December 31 311,572$ 238,778$ The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) 2019 2018 Unpaid claims, January 1 380,980$ 395,691$ Incurred claims (including IBNRs)4,466,044 3,670,930 Claim payments [4,357,606][3,685,641] Unpaid claims, December 31 489,418$ 380,980$ E.Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2019. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the Solid Waste Fund in each period based on landfill capacity used as of each balance sheet date. The $2,048,896 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2019. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2019. Project Authorization Expenditures Markley-Magnolia VV Sewer 5,150,000$ 439,661$ Bicentennial Center Improvements 10,200,000 12,433,918 Water Well 13 & 14 Maintenance 52,184 50,830 Community Fieldhouse (1)10,950,000 9,188,840 Community Fieldhouse (2)750,000 733,992 North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 Rebuild High Service Pump P-203 24,187 13,688 Pump Stations and Force Mains 1,483,000 1,425,505 2017 Country Club Road Improvements 1,200,000 1,089,063 River Trail 2 956,072 11,312 Downtown Streetscape 12,165,000 11,298,360 Smoky Hill River Renewal 27,000,000 3,467,058 Water Mains 4,250,000 2,319,841 Downtown Santa Fe Water Main Replacement 1,351,100 1,258,672 Police Training Facility 4,900,000 1,398,225 Rehab Pump St 28,29/Repl 28 Face Main 550,000 - Northbound 9th Street Bridge 103,768 95,358 Landfill Cell #20 Design 2,200,000 1,959,983 Railroad Crossing Improvements 45,000 - 2018 Park Improvements 194,000 87,000 FH Parking Lot 55,930 2,320 Pheasant Ridge Addition #3 Phase 2 509,233 446,916 Manhole & Valve Adj 10,000 17,806 Community Theater HVAC Replacement 46,000 207 Storm Sewer Mulberry Street 22,709 21,528 9th Street Crawford to Walnut 646,896 643,555 2019 Pavement Sealing 295,937 295,937 Dean Evans Drainage 60,000 315 2019 Sidewalk Improvements 24,965 24,648 2019 Traffic Signal Improvements 35,758 35,758 2019 Mill and Inlay 1,853,546 1,531,098 2019 Microsurfacing 693,462 681,555 2019 Chip and Seal 140,000 131,733 N.9th Str eet Bridge 2,000,000 3,546 Golf Course Irrigation 1,488,414 1,321,171 Police Parking Lot 400,000 200,995 2019 Sidewalk Abatement 21,625 - Fair Housing 38,750 - 9th South Addition 1,180,313 2,976 Smoky Hill Greenway Trail 435,637 49,389 Chorine Building 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 - Magnolia Hills Estates II 1,575,240 10,958 Stone Lake Phase 2 670,166 2,207 Stone Lake Phase 3A 1,647,053 3,007 Smedley Surgical Center 45,486 1,961 Sound Garden Oakdale Park 10,046 10,046 Wheatland Valley -Specials 5,474,790 6,500 Park Shelter Roof Replacement 93,816 - LED Lighting Replacement - Parks 18,223 - 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30- year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities’ CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count III Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts III and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third-party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0-CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed on or about June 18, 2018. The Feasibility Study portion of the CAFO scope of work was completed on or about November 29, 2018. KDHE’s draft final Corrective Action Decision (CAD) was published on or about April 8, 2019. KDHE held a public hearing for the final CAD on or about May 1, 2019. Final comments concerning the draft final CAD were due on or about May 8, 2019. KDHE published a final CAD on or about July 29, 2019. The KDHE CAD details the scope of work and estimated cost for the cleanup of DoD-caused contamination at the former Schilling AFB. 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) The Salina Public Entities participated in three mediation sessions with the U.S. Department of Justice (DOJ) and the U.S. Army Corps of Engineers (USACE) on November 19-21, 2019; December 10-11, 2019; and the final subsequent to year-end to determine payment by the United States in exchange for performance by the Salina Public Entities of the KDHE CAD. Special environmental legal counsel for the Salina Public Entities has negotiated with the DOJ for the completion of a Consent Decree that embodies the results of the three mediation sessions. The final draft of the Consent Decree will be considered by the Salina Public Entities in a joint meeting scheduled for June 24, 2020. Upon approval by the U.S. District Court for the District of Kansas, the CD will provide the Salina Public Entities funding from the United States for the Remedial Design (RD) and Remedial Action (RA) work detailed in the KDHE CAD. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the City intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the City has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Other Postemployment Healthcare Benefits Plan Description. The City offers postemployment health insurance to retirement employees. The benefits are provided through a single employer defined benefit postemployment healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. In 2019, the City did not contribute to the plan. At December 31, 2019, the following employees were covered by the benefit terms: Active employees 441 Retirees and covered spouses 32 Total 473 The total OPEB liability of $3,519,327 was measured as of December 31, 2018 and was determined by an actuarial valuation as of that date. The total OPEB liability in the December 31, 2017 actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date December 31, 2017 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.75% Salary increases 3.50% Discount rate 4.10% Healthcare cost trend rates Medical & Pharmacy: 6.20% for 2018, decreasing 0.60% per year to an ultimate rate of 5% for 2030 and through 2040 Dental: 5.00% to 2020, then drop to 4.90% in 2030 then back to 5.00% in 2040 Retiree's share of benefit related costs 100% of the premium 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2017. Changes in the total OPEB liability are as follows: Balance 1/1/2019 3,487,302$ Service cost 249,957 Interest 125,877 Benefit paid [157,465] Changes in assumptions [186,344] Balance 12/31/2019 3,519,327$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.44%) or one percentage point higher (4.44%) than the current discount rate: 1% Decrease Discount Rate 1% increase (3.10%)(4.10%)(5.10%) Total OPEB Liability 3,805,079$ 3,519,327$ 3,253,600$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.8% decreasing to 3.1%) or one percentage point higher (7.8% decreasing to 5.1%) than the current healthcare cost trend rate: Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability 3,092,948$ 3,519,327$ 4,027,376$ For the year ended December 31, 2019, the City recognized OPEB expense of $364,903. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows of resources of resources Changes of assumptions 70,090$ [164,999]$ Total 70,090$ [164,999]$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) Deferred Year ended [Inflows] Outflows June 30,Amount 2020 [10,931]$ 2021 [10,931] 2022 [10,931] 2023 [10,931] 2024 [10,931] 2025+[40,254] Total [94,909]$ J.Other Postemployment Benefits (KPERS) Plan Description. The City participates in a multiple-employer defined benefit other postemployment benefit (OPEB) plan (the Plan) which is administered by the Kansas Public Employees Retirement System (KPERS). The Plan provides long-term disability benefits and a life insurance benefit for disabled members to KPERS members, as provided by K.S.A. 74-04927. The Plan is administered through a trust held by KPERS that is funded to pay annual benefit payments. However, because the trust’s assets are used to pay employee benefits other than OPEB, the trust does not meet the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Accordingly, the Plan is considered to be administered on a pay-as-you-go basis. Benefits. Benefits are established by statute and may be amended by the KPERS Board of Trustees. The Plan provides long-term disability benefits equal to 60 percent (prior to January 1, 2006, 66 2/3 percent) of annual compensation, offset by other benefits. Members receiving long-term disability benefits also receive credit towards their KPERS retirement benefits and have their group life insurance coverage continued under the waiver of premium provision. The monthly long-term disability benefit is 60 percent of the member’s monthly compensation, with a minimum of $100 and a maximum of $5,000. The monthly benefit is subject to reduction by deductible sources of income, which include Social Security primary disability or retirement benefits, workers compensation benefits, other disability benefits from any other sources by reason of employment, and earnings from any form of employment. If the disability begins before age 60, benefits are payable while the disability continues until the member’s 65th birthday or retirement date, whichever occurs first. If the disability begins after age 60, benefits are payable while the disability continues, for a period of five years or until the member retires, whichever occurs first. Benefit payments for disabilities caused or contributed to by substance abuse or non-biologically based mental illnesses are limited to the shorter of the term of the disability or 24 months per lifetime. The death benefit paid to beneficiaries of disabled members is 150% of the greater of 1) the member’s annual rate of compensation at the time of disability, or 2) the members previous 12 months of compensation at the time of the last date on payroll. If the member has been disabled for five or more years, the annual compensation or salary rate at the time of death will be indexed using the consumer price index, less one percentage point, to compute the death benefit. If a member is diagnosed as terminally ill with a life expectancy of 12 months or less, the member may be eligible to receive up to 100% of the death benefit rather than having the benefit paid to the beneficiary. If a member retires or disability benefits end, the member may convert the group life insurance coverage to an individual insurance policy. Employees covered by benefit terms.At June 30, 2019, the valuation date, the following employees were covered by the benefit terms: 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Active employees 282 Disabled members 2 Total 284 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $527,919 as of December 31, 2019, was measured as of June 30, 2019, and was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Valuation date December 31, 2018 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index)3.50% The discount rate was based on the bond buyer general obligation 20-bond municipal index. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2019. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period of January 1, 2013 through December 31, 2015. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2018 KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance 1/1/2019 546,926$8,886$ 11,126$ 566,938$ Service cost 52,863 1,507 2,843 57,213 Interest 22,667 372 541 23,580 Effect of economic/demographic gains or losses [95,243] [2,512][1,324][99,079] Changes in assumptions 7,614 [67]152 7,699 Benefit payments [28,432] --[28,432] Balance 12/31/2019 506,395$8,186$ 13,338$ 527,919$ Total KPERS OPEB Liability Sensitivity of the total KPERS OPEB liability to changes in the discount rate.The following presented the total KPERS OPEB liability of the City, as well as what the City’s total KPERS OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87%) or 1-percentage-point higher (4.87%) than the current discount rate: 1% Decrease Discount Rate 1% increase (2.50%)(3.50%)(4.50%) Total OPEB Liability - City 526,498$ 506,395$ 485,611$ Total OPEB Liability - Housing Authority 8,394$ 8,186$ 7,941$ Total OPEB Liability - Airport Authority 13,693$ 13,338$ 12,901$ 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Sensitivity of the total KPERS OPEB liability to changes in the healthcare cost trend rates. The following presented the total KPERS OPEB liability of the City calculated using the current healthcare cost trend rates as well as what the City’s total KPERS OPEB liability would be if it were calculated using trend rates that are 1 percentage point lower or 1 percentage point higher than the current trend rates. The reader should note that healthcare trend rates do not affect the liabilities related to the long-term disability benefits sponsored by KPERS, but this exhibit is provided as it is a required disclosure under GASB 75. Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability - City 506,395$ 506,395$ 506,395$ Total OPEB Liability - Housing Authority 8,186$ 8,186$ 8,186$ Total OPEB Liability - Airport Authority 11,395$ 1,126$ 10,800$ For the year ended June 30, 2018, the City recognized OPEB expense of $75,561. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Housing Authority Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Inflows of Inflows of Inflows of Resources Resources Resources Resources Resources Differences between expected and actual experience 59,657$ 85,454$ 2,253$ -$ 4,521$ Changes of assumptions 6,831 11,633 223 136 173 Total 66,488$ 97,087$ 2,476$ 136$ 4,694$ Airport AuthorityCity $72,729 and $4,294 reported as deferred outflows of resources related to OPEB resulting from City and Airport Authority contributions subsequent to the measurement date, respectively, will be recognized as a reduction of the OPEB liability in the year ended December 31, 2019. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2020 [2,886]$ [287]$ [578]$ 2021 [2,886] [287][578] 2022 [2,886] [287][578] 2023 [2,886] [287][578] 2024 [2,886] [287][578] Thereafter [16,169][1,041] [1,668] Total [30,599]$[2,476]$ [4,558]$ 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements In 2019, the City of Salina participated in real property tax abatements for five local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start- ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Company Start End %2019 Tax Abated Salina Vortex Corp (facility improvements) 2015 2024 75% $ 14,369 Great Plains Mfg (facility improvements) 2014 2023 100% 2,744 Veris Technologies (facility addition/improvements) 2015 2024 40.5% 1,755 Twin Oaks (facility addition/improvements) 2015 2024 55% 2,565 Salina Field House (facility) 2017 2026 100% 81,376 Total 102,808$ Ad Valorem Propert y Tax Abatements Abatement Tax Increment Financing (TIF).TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Reimbursements District Purpose Base Year Expires Sales Tax Propert y Tax Lambertz Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and private infrastructure 2007 2027 $268,905 $215,999 Total $268,905 $215,999 TIF Project Plans Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Name Rate Start Expires Pur pose 2019 Eligible Reimbursement Amount South 9th Street 2.00% 3/1/2016 12/31/2037 Assist with improvements to hotel and conference center $251,052 Total $251,052 Communit y Improvement District (CID) Neighborhood Revitalization Areas (NRA).NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4-year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 69 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Property/Business Name Address Type Rebate Paid Serio Guzman 241 N. Front Street Res 111$ Christina Litwiller 148 N. 12th Street Res 72 Jeremy Cessna 219 N. Front Street Res 77 William & Mary Warhurst 714 Park Street Res 15 Holly Fain 204 Forest Avenue Res 110 Arlene Cox 200 Forest Avenue Res 110 Gloria Williams 903 N. 10th Street Res 80 Michelle Rogan 240 S. Clark Street Res 96 Samuel A. Rock 1329 N. 4th Street Res 16 Jessica A. Ziegler 221 N. 2nd Street Res 109 Devin or Jessica Know 207 N. Penn Res 156 Ravey Investments LLC 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Com 581 Lamont Outland 1206 N. 7th Street Res 93 Michelle Bunch 634 N. 8th Street Res 91 Jermaine and Tykea Polk 226 N. 2nd Street Res 116 Mary Marshall 937 N. 3rd Street Res 86 Angela Fishburn 1219 N. 8th Street Res 87 Kress Building LLC 134 S. Santa Fe Ave Com 411 Heritage at Hawthorne Partners, LL715 N. 9th Street Com 1,527 Will & Mary Warhurst 809 W. Ash Res 121 Donnie & Ramona Marrs 2035 E. Iron #300R Res 859 TJTM, Inc. 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001R/002R/003R/004R/005R Res 5,359 Troy Valcil 853 Navaho Res 62 Michelle Malone 815 N. 2nd Street Res 2 Timothy & Linda Rickman 719 E. Ash Res 140 Yvette Gelinas 1115 N. 8th Street Res 90 Charles H Carroll Jr Trust 156-158 S. Santa Fe Com 4,149 Pestinger Enterprises LLC 2035 E. Iron Avenue, Unit #306R Res 1,300 Latisha Pierce 705 N. 2nd Street Res 251 Tanya Shiehzadeh 703 N. 2nd Street Res 208 Robert & Brenda Burns 1205 N. 4th Street Res 160 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Com 1,284 Phill Hemmer 2035 E. Iron Avenue, Unit #203R Res 1,615 AP Property Holdings, LLC 201 E. Iron Avenue Com 9,578 Gregory Davis 156-158 N. 11th Street Res 519 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 1,174 Traniesh Byrd 701 N. 2nd Street Res 178 Mark Martin Living Trust 2035 E. Iron #104R Com 818 AKKJ, LLC 2035 E Iron #304R Res 835 Kevin & Rebecca Poland 601 Johnstown Res 36 Jana Endsley 1321 N. 3rd Street Res 177 Kanesha Samilton 214 W. Grand Avenue Res 227 Maria E Padilla 810 N. 5th Street Res 280 Kansas Property Investors, LLC, 230 S. Broadway Blvd Com 1,400 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 1,981 Alan and Nancy Franzen 1413 Arapahoe Res 184 Brandon Sears 900 N. 12th Street Res 22 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 2,231 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,352 Heritage at Hawthorne Partners II, LLC.715 N. 9th Street, Phase II Com 1,750 Christopher Helmer 619 N. 5th Street Com 762 Christopher Helmer 545 N. 12th Street Res 203 Total 44,248$ Neighborhood Revitalization Act (NRA) 70 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) L. Subsequent Events On April 29, 2020, the City issued Series 2020-A general obligation internal improvement bonds in the amounts of $5,210,000. Proceeds from the bonds will be used to provide long-term financing for a portion of the costs of certain public improvements within the City and to retire a portion of the City’s outstanding general obligation temporary notes. The City will make the first payment on the bonds on October 1, 2021and the last payment on October 1, 2035. The interest rate on the bonds ranges from 2.00% to 3.00%. Also on April 29, 2020, the City issued Series 2020-1 temporary notes in the amounts of $7,050,000. Proceeds from the notes will be used to finance certain public improvements within the City. The maturity date of the temporary notes is May 1, 2021 and the interest rate on the notes is 1.00%. On January 30, 2020 the World Health Organization declared the Coronavirus outbreak as a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions were taken to help mitigate the spread of the virus, including social-distancing, quarantines and forced closures of certain types of public places and businesses. Management is unable to quantify the financial and other impacts to the City’s financial position but believes a material impact is reasonably possible. 5(48,5('6833/(0(17$5<,1)250$7,21 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 249,957$ 226,762$ Interest 125,877 128,578 Benefit paid [157,465] [265,000] Changes in assumptions [186,344] 90,918 Net change in total OPEB liability 32,025 181,258 Total OPEB liability - beginning 3,487,302 3,306,044 Total OPEB liability - ending 3,519,327$ 3,487,302$ Covered payroll 25,232,129$ 24,740,225$ Total OPEB liability as a percentage of covered-employee payroll 13.95% 14.10% Actuarially determined contribution 157,465$ 265,000$ Actual contribution 157,465$ 265,000$ Contributions as a percentage of covered payroll 0.62% 1.07% * - Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) OTHER POSTEMPLOYMENT BENEFITS - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 52,863$ 52,380$ Interest 22,667 17,061 Effect of economic/demographic gains or losses [95,243] 75,173 Effect of assumptions changes or inputs 7,614 [6,574] Benefit payments [28,432][30,368] Net change in total OPEB liability [40,531] 107,672 Total OPEB liability - beginning 546,926 439,254 Total OPEB liability - ending 506,395$ 546,926$ Covered payroll 13,991,543$ 13,652,194$ Total OPEB liability as a percentage of covered-employee payroll 3.62% 4.01% Actuarially determined contribution 147,114$ 109,466$ Actual contribution 147,114$ 109,466$ Contributions as a percentage of covered payroll 1.05% 0.80% 73 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) KPERS PENSION PLAN Schedule of the City’s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 City's proportion of the net pension liability 0.764% 2.258% 0.761% 2.180%0.811% 2.191% 0.790% 2.081% 0.796% 2.074% City's proportionate share of the net pension liability 10,027,679$ 16,395,794$ 11,770,699$ 20,251,512$ 11,753,246$ 20,546,882$ 11,014,328$ 20,019,473$ 11,123,112$ 20,993,820$ City's covered-employee payroll 12,931,197$ 10,161,866$ 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% 161.35% 88.83% 188.74% 86.75% 193.96% 78.98% 191.74% 77.43% 193.33% Plan fiduciary net position as a percentage of the total pension liability 71.98% 74.60% 68.55% 69.30% 72.15% 70.99% 74.22% 71.53% 75.02% 71.22% *The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Schedule of the City’s Contributions Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 Contractually required contribution 1,256,217$ 2,527,995$ 1,243,711$ 2,361,273$ 1,179,745$ 1,986,933$ 1,205,334$ 2,181,617$ 1,328,915$ 2,497,473$ Contributions in relation to the contractually required contribution 1,256,217 2,527,995 1,243,711 2,361,273 1,179,745 1,986,933 1,205,334 2,181,617 1,328,915 2,497,473 Contribution deficiency [excess] -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ City's covered-employee payroll 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ 14,948,415$ 11,285,465$ Contributions as a percentage of covered employee payroll 9.48% 23.56% 9.18% 22.29% 8.46% 19.03% 8.39% 20.09% 8.89% 22.13% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 74 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund - To account for the activities of the City's convention center. Business improvement district fund - State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund - To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund - To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund - To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund - To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund - To account for 2.34% of the .75 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund – To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund – To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund - To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund - To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund - To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund - To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund - To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund - To account for donations to the D.A.R.E. program. War memorial maintenance fund - To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund - To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund - To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds - To account for revenue and expenses associated with federal Equitable Sharing Program funds. 75 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS - CONTINUED Homeowners’ assistance fund - To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund – To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund – To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. Cemetery endowment fund - To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund - To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund - To account for donations to be used to celebrate the nation's tricentennial in the year 2076. Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds ASSETS Cash and investments 3,371,618$ 527,536$ 962,774$ 4,861,928$ Receivables Accounts 2,012 --2,012 Total assets 3,373,630$ 527,536$ 962,774$ 4,863,940$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 170,244$ -$23,179$ 193,423$ Total liabilities 170,244 -23,179 193,423 Fund balances: Restricted 570,175 - 939,595 1,509,770 Committed 2,487,479 527,536 - 3,015,015 Assigned 145,732 --145,732 Total fund balances 3,203,386 527,536 939,595 4,670,517 Total liabilities and fund balances 3,373,630$ 527,536$ 962,774$ 4,863,940$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2019 See independent auditor's report on the financial statements. 76 Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds REVENUES Taxes 822,506$ -$ -$ 822,506$ Intergovernmental 1,264,173 - 523,392 1,787,565 Charges for services 486,443 8,027 - 494,470 Licenses and permits 4,500 - - 4,500 Investment revenue 9,262 5,343 14,828 29,433 Donations 90,084 - - 90,084 Miscellaneous 43,956 --43,956 Total revenues 2,720,924 13,370 538,220 3,272,514 EXPENDITURES Current Culture and recreation 1,667,994 - - 1,667,994 Public safety 256,444 - - 256,444 Public health and sanitation 303,950 - - 303,950 Planning and development 396,101 - - 396,101 Miscellaneous - 35 - 35 Debt service Principal retirement - - 185,000 185,000 Interest and other charges - - 47,278 47,278 Capital outlay 1,096,882 --1,096,882 Total expenditures 3,721,371 35 232,278 3,953,684 Excess [deficiency] of revenues over [under] expenditures [1,000,447] 13,335 305,942 [681,170] Other financing sources [uses] Transfers in 1,472,014 --1,472,014 Total other financing sources [uses]1,472,014 --1,472,014 Net change in fund balance 471,567 13,335 305,942 790,844 Fund balance - Beginning of year 2,713,491 514,201 633,653 3,861,345 Prior period adjustment 18,328 --18,328 Fund balance - Beginning of year, restated 2,731,819 514,201 633,653 3,879,673 Fund balance - End of year 3,203,386$ 527,536$ 939,595$ 4,670,517$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS See independent auditor's report on the financial statements. 77 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol ASSETS Cash and investments 262,848$ 4,661$ 28,751$ 352,039$ 234$ Receivables Accounts -2,012 --- Total assets 262,848$ 6,673$ 28,751$ 352,039$ 234$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 62,865$ -$-$3,173$-$ Total liabilities 62,865 --3,173 - Fund balance: Restricted - 6,673 - 348,866 234 Committed 199,983 - 28,751 - - Assigned ----- Total fund balance [deficit]199,983 6,673 28,751 348,866 234 Total liabilities and fund balances 262,848$ 6,673$ 28,751$ 352,039$ 234$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2019 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ ------ 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ -$6,147$ -$22,554$ -$71,803$ -6,147 -22,554 -71,803 186,307 ---- - - 708,563 435,642 1,274 6,493 303,573 -----145,732 186,307 708,563 435,642 1,274 6,493 449,305 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ See independent auditor's report on the financial statements. 7 Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations ASSETS Cash and investments 135,189$ 82$-$ 41,125$ 28,571$ Receivables Accounts ----- Total assets 135,189$ 82$-$41,125$28,571$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable -$-$-$-$458$ Total liabilities ----458 Fund balance: Restricted ----- Committed 135,189 82 - 41,125 28,113 Assigned ----- Total fund balance [deficit]135,189 82 -41,125 28,113 Total liabilities and fund balances 135,189$ 82$-$41,125$28,571$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals 30,730$ 50,141$ 26,141$ 99$ 16,845$ 1,954$ 504,120$ 3,371,618$ -------2,012 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ -$377$-$ -$-$-$2,867$ 170,244$ -377 ----2,867 170,244 - - 26,141 - - 1,954 - 570,175 30,730 49,764 - 99 16,845 - 501,253 2,487,479 -------145,732 30,730 49,764 26,141 99 16,845 1,954 501,253 3,203,386 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ See independent auditor's report on the financial statements. 7 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol Revenues Taxes -$-$-$-$-$ Intergovernmental - - - 227,304 227,304 Charges for services - 83,916 - - - Licenses and permits - - 4,500 - - Investment revenue - - - - - Donations - - - - - Miscellaneous ----- Total Revenues -83,916 4,500 227,304 227,304 Expenditures Current Culture and recreation 663,614 - - - - Public safety - - - - - Public health and sanitation - - - - 227,304 Planning and development - 85,201 - - - Capital outlay ---150,959 - Total Expenditures 663,614 85,201 -150,959 227,304 Excess [deficiency] of revenues over [under] expenditures [663,614] [1,285] 4,500 76,345 - Other financing sources [uses] Transfers in 765,916 ---- Total other financing sources [uses] 765,916 ---- Net change in fund balance 102,302 [1,285] 4,500 76,345 - Fund balance, beginning of year 97,681 7,958 24,251 272,521 234 Prior period adjustment ----- Fund balance, beginning of year, restated 97,681 7,958 24,251 272,521 234 Fund balance, end of year 199,983$ 6,673$ 28,751$ 348,866$ 234$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications -$ 344,976$ 234,765$ 242,765$ -$-$ ----351,254 344,954 ----- - ----- - - - 4,688 27 - 4,234 ----- - ---13,411 -- -344,976 239,453 256,203 351,254 349,188 ----- - -----256,444 ----- - - - 41,767 256,176 - - -533,898 --352,774 - -533,898 41,767 256,176 352,774 256,444 -[188,922]197,686 27 [1,520] 92,744 ------ ------ -[188,922]197,686 27 [1,520] 92,744 186,307 897,485 237,956 1,247 8,013 356,561 ------ 186,307 897,485 237,956 1,247 8,013 356,561 186,307$ 708,563$ 435,642$ 1,274$ 6,493$ 449,305$ See independent auditor's report on the financial statements. Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations Revenues Taxes -$ -$-$-$-$ Intergovernmental - - 25,557 37,800 - Charges for services ----- Licenses and permits ----- Investment revenue ----- Donations ----- Miscellaneous ----15,752 Total Revenues --25,557 37,800 15,752 Expenditures Current Culture and recreation - ---- Public safety ----- Public health and sanitation ----- Planning and development - - - - 12,957 Capital outlay 39,910 -19,341 -- Total Expenditures 39,910 -19,341 -12,957 Excess [deficiency] of revenues over [under] expenditures [39,910] -6,216 37,800 2,795 Other financing sources [uses] Transfers in 68,350 ---- Total other financing sources [uses] 68,350 ---- Net change in fund balance 28,440 -6,216 37,800 2,795 Fund balance, beginning of year 106,749 82 [24,544] 3,325 25,318 Prior period adjustment --18,328 -- Fund balance, beginning of year, restated 106,749 82 [6,216] 3,325 25,318 Fund balance, end of year 135,189$ 82$ -$ 41,125$ 28,113$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals -$-$-$-$-$-$-$ 822,506$ - - - - - - 50,000 1,264,173 - 402,527 - - - - - 486,443 --- ----4,500 313 - - - - - - 9,262 - - - - - - 90,084 90,084 -12,163 --2,630 --43,956 313 414,690 --2,630 -140,084 2,720,924 - 1,004,380 - - - - - 1,667,994 - - - - - - - 256,444 - - - - - - 76,646 303,950 - - - - - - - 396,101 -------1,096,882 -1,004,380 ----76,646 3,721,371 313 [589,690] --2,630 -63,438 [1,000,447] -637,748 -----1,472,014 -637,748 -----1,472,014 313 48,058 --2,630 -63,438 471,567 30,417 1,706 26,141 99 14,215 1,954 437,815 2,713,491 -------18,328 30,417 1,706 26,141 99 14,215 1,954 437,815 2,731,819 30,730$ 49,764$ 26,141$ 99$16,845$ 1,954$ 501,253$3,203,386$ See independent auditor's report on the financial statements. Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Total Cash and investments 519,578$ 2,063$ 5,895$ 527,536$ Total assets 519,578$ 2,063$ 5,895$ 527,536$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$-$-$-$ Total liabilities ---- Fund balances Committed 519,578 2,063 5,895 527,536 Total liabilities and fund balances 519,578$ 2,063$ 5,895$ 527,536$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET December 31, 2019 NONMAJOR PERMANENT FUNDS See independent auditor's report on the financial statements. 82 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 8,027$ -$-$ 8,027$ Investment revenue 5,262 21 60 5,343 Total revenues 13,289 21 60 13,370 Expenditures Miscellaneous 35 --35 Total expenditures 35 --35 Net change in fund balance 13,254 21 60 13,335 Fund balances - beginning of year 506,324 2,042 5,835 514,201 Fund balances - end of year 519,578$ 2,063$ 5,895$ 527,536$ NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES See independent auditor's report on the financial statements. 83 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Investment revenue -$10,000$ 10,000$ (10,000)$ Total revenues -10,000 10,000 (10,000) Expenditures Culture and recreation 663,614 725,000 725,000 61,386 Total expenditures 663,614 725,000 725,000 61,386 Excess [deficiency] of revenues over [under] expenditures [663,614][715,000][715,000]51,386 Other financing sources [uses] Transfers in 765,916 754,496 754,496 11,420 Total other financing sources [uses]765,916 754,496 754,496 11,420 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 102,302 39,496 39,496 62,806 Unreserved fund balance, January 1 97,681 27,647 27,647 70,034 Unreserved fund balance/GAAP fund balance December 31 199,983$ 67,143$ 67,143$ 132,840$ Budgeted Amounts See independent auditor's report on the financial statements. 84 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 83,701$ 90,513$ 90,513$ [6,812]$ Investment revenue - 15 15 [15] Total revenues 83,701 90,528 90,528 [6,827] Expenditures Planning and development 85,201 90,500 90,500 5,299 Total expenditures 85,201 90,500 90,500 5,299 Excess [deficiency] of revenues over [under] expenditures [1,500] 28 28 [1,528] Unreserved fund balance, January 1 6,161 13,303 13,303 [7,142] Unreserved fund balance, December 31 4,661 13,331$ 13,331$ [8,670]$ Reconciliation to GAAP Accounts receivable 2,012 GAAP Fund Balance, December 31 6,673$ Budgeted Amounts See independent auditor's report on the financial statements. 85 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) NEIGHBORHOOD PARK FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Licenses and permits 4,500$ 5,500$ 5,500$ [1,000]$ Investment revenue -50 50 [50] Total revenues 4,500 5,550 5,550 [1,050] Expenditures Capital outlay -10,000 10,000 10,000 Total expenditures -10,000 10,000 10,000 Excess [deficiency] of revenues over [under] expenditures 4,500 [4,450] [4,450] 8,950 Unreserved fund balance, January 1 24,251 32,099 32,099 [7,848] Unreserved fund balance/GAAP fund balance December 31 28,751$ 27,649$ 27,649$ 1,102$ Budgeted Amounts See independent auditor's report on the financial statements. 86 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 213,751$ 13,553$ Investment revenue -100 100 [100] Total revenues 227,304 213,851 213,851 13,453 Expenditures Capital outlay 885 259,000 259,000 258,115 Total expenditures 885 259,000 259,000 258,115 Excess [deficiency] of revenues over [under] expenditures 226,419 [45,149] [45,149] 271,568 Unreserved fund balance, January 1 122,447 109,993 109,993 12,454 Unreserved fund balance/GAAP fund balance December 31 348,866$ 64,844$ 64,844$ 284,022$ Budgeted Amounts See independent auditor's report on the financial statements. 87 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 250,000$ [22,696]$ Total revenues 227,304 213,751 250,000 [22,696] Expenditures Public health and sanitation 227,304 213,751 250,000 22,696 Total expenditures 227,304 213,751 250,000 22,696 Excess [deficiency] of revenues over [under] expenditures ---- Unreserved fund balance, January 1 234 164 234 - Unreserved fund balance/GAAP fund balance December 31 234$ 164$ 234$ -$ Budgeted Amounts See independent auditor's report on the financial statements. 88 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes 344,976$ 354,987$ 354,987$ [10,011]$ Investment revenue -2,000 2,000 [2,000] Total revenues 344,976 356,987 356,987 [12,011] Expenditures Capital outlay 533,898 480,000 555,000 21,102 Total expenditures 533,898 480,000 555,000 21,102 Excess [deficiency] of revenues over [under] expenditures [188,922] [123,013] [198,013] 9,091 Unreserved fund balance, January 1 897,485 878,081 897,485 - Unreserved fund balance/GAAP fund balance December 31 708,563$ 755,068$ 699,472$ 9,091$ Budgeted Amounts See independent auditor's report on the financial statements. 89 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 402,527$ 320,400$ 320,400$ 82,127$ Miscellaneous 12,163 99,800 99,800 [87,637] Total revenues 414,690 420,200 420,200 [5,510] Expenditures Culture and recreation 1,004,380 1,066,349 1,066,349 61,969 Total expenditures 1,004,380 1,066,349 1,066,349 61,969 Excess [deficiency] of revenues over [under] expenditures [589,690][646,149][646,149]56,459 Other financing sources [uses] Transfers in 637,748 665,000 665,000 [27,252] Total other financing sources [uses]637,748 665,000 665,000 [27,252] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 48,058 18,851 18,851 29,207 Unreserved fund balance, January 1 1,706 63,793 63,793 [62,087] Unreserved fund balance/GAAP fund balance December 31 49,764$ 82,644$ 82,644$ [32,880]$ Budgeted Amounts See independent auditor's report on the financial statements. 90 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 2,620,653$ 2,850,000$ 2,850,000$ [229,347]$ Delinquent taxes 43,289 55,000 55,000 [11,711] Motor vehicle taxes 305,502 287,142 287,142 18,360 Special assessments 1,540,285 1,710,000 1,710,000 [169,715] Investment revenue - 2,500 2,500 [2,500] Miscellaneous 94,519 --94,519 Total revenues 4,604,248 4,904,642 4,904,642 [300,394] Expenditures Debt Service Principal retirement 5,413,015 5,729,365 5,729,365 316,350 Interest and other charges 1,536,834 1,589,855 1,589,855 53,021 Total expenditures 6,949,849 7,319,220 7,319,220 369,371 Excess [deficiency] of revenues over [under] expenditures [2,345,601] [2,414,578] [2,414,578] 68,977 Other financing sources [uses] Transfers in 1,632,958 2,000,000 2,000,000 [367,042] Total other financing sources [uses]1,632,958 2,000,000 2,000,000 [367,042] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [712,643] [414,578] [414,578] [298,065] Unreserved fund balance, January 1 1,801,968 942,248 942,248 859,720 Unreserved fund balance, December 31 1,089,325 527,670$ 527,670$ 561,655$ Reconciliation to GAAP Taxes receivable 3,105,131 Deferred revenue [3,052,038] GAAP Fund Balance, December 31 1,142,418$ Budgeted Amounts See independent auditor's report on the financial statements. CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,073,363$ 2,369,000$ 2,369,000$ 704,363$ Investment revenue - 4,000 4,000 [4,000] Miscellaneous 416,369 32,000 32,000 384,369 Total revenues 3,489,732 2,405,000 2,405,000 1,084,732 Expenditures Public works 2,405,461 2,471,998 2,471,998 66,537 Total expenditures 2,405,461 2,471,998 2,471,998 66,537 Excess [deficiency] of revenues over [under] expenditures 1,084,271 [66,998] [66,998]1,151,269 Other financing sources [uses] Transfers [out][640,000][125,000] [125,000][515,000] Total other financing sources [uses][640,000][125,000] [125,000][515,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 444,271 [191,998] [191,998] 636,269 Unreserved fund balance, January 1 4,004,416 3,858,116 3,858,116 146,300 Unreserved fund balance, December 31 4,448,687$ 3,666,118$ 3,666,118$ 782,569$ Budgeted Amounts See independent auditor's report on the financial statements. 92 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 20,135,245$ 20,950,319$ 20,950,319$ [815,074]$ Investment revenue - 25,000 25,000 [25,000] Miscellaneous 4,880 10,000 10,000 [5,120] Total revenues 20,140,125 20,985,319 20,985,319 [845,194] Expenditures Public works 10,990,480 15,007,493 15,007,493 4,017,013 Total expenditures 10,990,480 15,007,493 15,007,493 4,017,013 Excess [deficiency] of revenues over [under] expenditures 9,149,645 5,977,826 5,977,826 3,171,819 Other financing sources [uses] Transfers in - 122,200 122,200 [122,200] Transfers [out][7,790,425][6,800,000][6,800,000][990,425] Total other financing sources [uses][7,790,425][6,677,800][6,677,800][1,112,625] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,359,220 [699,974] [699,974] 2,059,194 Unreserved fund balances, January 1 12,283,191 10,134,124 10,134,124 2,149,067 Unreserved fund balances, December 31 13,642,411$ 9,434,150$ 9,434,150$ 4,208,261$ Budgeted Amounts See independent auditor's report on the financial statements. 93 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,228,431$ 3,450,000$ 3,450,000$ [221,569]$ Investment revenue -3,500 3,500 [3,500] Total revenues 3,228,431 3,453,500 3,453,500 [225,069] Expenditures Public works 2,479,468 3,136,223 3,136,223 656,755 Total expenditures 2,479,468 3,136,223 3,136,223 656,755 Excess [deficiency] of revenues over [under] expenditures 748,963 317,277 317,277 431,686 Other financing sources [uses] Transfers [out][491,500][411,500][411,500][80,000] Total other financing sources [uses][491,500][411,500][411,500][80,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 257,463 [94,223] [94,223] 351,686 Unreserved fund balance, January 1 1,468,134 1,695,957 1,695,957 [227,823] Unreserved fund balances, December 31 1,725,597$ 1,601,734$ 1,601,734$ 123,863$ Budgeted Amounts See independent auditor's report on the financial statements. 94 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 809,636$ 845,997$ 845,997$ [36,361]$ Investment revenue - 350 350 [350] Miscellaneous 97,562 120,000 120,000 [22,438] Total revenues 907,198 966,347 966,347 [59,149] Expenditures Recreation 935,700 955,806 955,806 20,106 Total expenditures 935,700 955,806 955,806 20,106 Excess [deficiency] of revenues over [under] expenditures [28,502]10,541 10,541 [39,043] Other financing sources [uses] Transfers [out]---- Total other financing sources [uses]---- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [28,502] 10,541 10,541 [39,043] Unreserved fund balance, January 1 50,211 128,476 128,476 [78,265] Unreserved fund balances, December 31 21,709$ 139,017$ 139,017$ [117,308]$ Budgeted Amounts See independent auditor's report on the financial statements. 95 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 312,852$ 312,933$ 312,933$ [81]$ Investment revenue - 2,500 2,500 [2,500] Miscellaneous 109 3,000 3,000 [2,891] Total revenues 312,961 318,433 318,433 [5,472] Expenditures General government 336,880 430,418 430,418 93,538 Total expenditures 336,880 430,418 430,418 93,538 Excess [deficiency] of revenues over [under] expenditures [23,919] [111,985] [111,985] 88,066 Unreserved fund balance, January 1 1,086,849 761,583 761,583 325,266 Unreserved fund balances, December 31 1,062,930$ 649,598$ 649,598$ 413,332$ Budgeted Amounts See independent auditor's report on the financial statements. 96 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) HEALTH INSURANCE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 6,055,450$ 7,523,584$ 6,200,000$ [144,550]$ Investment revenue - 5,000 - - Miscellaneous 49,526 25,000 -49,526 Total revenues 6,104,976 7,553,584 6,200,000 [95,024] Expenditures General government 7,028,930 6,747,554 7,050,550 21,620 Total expenditures 7,028,930 6,747,554 7,050,550 21,620 Excess [deficiency] of revenues over [under] expenditures [923,954] 806,030 [850,550] [73,404] Unreserved fund balance, January 1 3,112,407 761,583 3,112,407 - Unreserved fund balances, December 31 2,188,453$ 1,567,613$ 2,261,857$ [73,404]$ Budgeted Amounts See independent auditor's report on the financial statements. 97 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 1,430,533$ -$-$ 1,430,533$ Investment revenue - 40 40 [40] Miscellaneous 3,997 7,500 7,500 [3,503] Total revenues 1,434,530 7,540 7,540 1,426,990 Expenditures General government 1,474,000 1,564,012 1,564,012 90,012 Total expenditures 1,474,000 1,564,012 1,564,012 90,012 Excess [deficiency] of revenues over [under] expenditures [39,470][1,556,472][1,556,472]1,517,002 Other financing sources [uses] Transfers in 140,000 1,633,644 1,633,644 [1,493,644] Total other financing sources [uses]140,000 1,633,644 1,633,644 [1,493,644] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 100,530 77,172 77,172 23,358 Unreserved fund balance, January 1 54,128 1,130,194 1,130,194 [1,076,066] Unreserved fund balance, December 31 154,658$ 1,207,366$ 1,207,366$ [1,052,708]$ Budgeted Amounts See independent auditor's report on the financial statements. 98 99 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund - To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund - To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund - To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. Total Workers' Internal Compensation Health Central Service ASSETS Reserve Insurance Garage Funds Current assets: Cash and investments 1,063,855$ 2,188,454$ 200,144$ 3,452,453$ Inventory and prepaid supplies --127,892 127,892 Total current assets 1,063,855 2,188,454 328,036 3,580,345 Capital assets: Capital assets - - 168,234 168,234 Less: accumulated depreciation --153,601 153,601 Total capital assets --14,633 14,633 Total assets 1,063,855 2,188,454 342,669 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources - - 2,832 2,832 Pension deferred outflows of resources --22,769 22,769 Total deferred outflows of resources --25,601 25,601 Total assets and deferred outflows of resources 1,063,855$ 2,188,454$368,270$3,620,579$ Liabilities: Current liabilities (payable from current assets): Accounts payable 925$ -$ 45,485$ 46,410$ Current portion of compensated absences payable - - 22,917 22,917 Current portion of accrued claims payable 159,754 489,418 -649,172 Total current liabilities (payable from current assets)160,679 489,418 68,402 718,499 Noncurrent liabilities: Compensated absences payable - - 8,529 8,529 Accrued claims payable 151,818 - - 151,818 Net KPERS OPEB obligation - - 10,128 10,128 Net pension liability --156,268 156,268 Total noncurrent liabilities 151,818 -174,925 326,743 Total liabilities 312,497 489,418 243,327 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources - - 1,942 1,942 Pension deferred inflows of resources --7,667 7,667 Total deferred inflows of resources --9,609 9,609 Total liabilities and deferred inflows of resources 312,497$ 489,418$ 252,936$1,054,851$ Net Position Invested in capital assets, net of related debt -$-$ 14,633$ 14,633$ Unrestricted 751,358 1,699,036 100,701 2,551,095 Total net position 751,358$ 1,699,036$115,334$2,565,728$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2019 See independent auditor's report on the financial statements. 100 Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Operating revenues Charges for services 312,852$ 6,055,450$ 1,430,533$ 7,798,835$ Miscellaneous 109 49,526 10,668 60,303 Total operating revenues 312,961 6,104,976 1,441,201 7,859,138 Operating expenses General government 409,674 7,137,367 1,435,290 8,982,331 Depreciation --7,699 7,699 Total operating expenses 409,674 7,137,367 1,442,989 8,990,030 Operating income [loss][96,713] [1,032,391][1,788] [1,130,892] Nonoperating revenues [expenses] Investment revenue - - - - Total other operating revenues [expenses]- - - - Income [loss] before transfers [96,713] [1,032,391][1,788] [1,130,892] Transfers from [to] other funds Transfers in - - 140,000 140,000 Total transfers --140,000 140,000 Change in net position [96,713] [1,032,391] 138,212 [990,892] Net position, January 1 848,071 2,731,427 [22,878] 3,556,620 Net position, December 31 751,358$ 1,699,036$ 115,334$ 2,565,728$ COMBINING STATEMENT OF REVENUES, EXPENSES INTERNAL SERVICE FUND CITY OF SALINA, KANSAS For the Year Ended December 31, 2019 AND CHANGES IN NET POSITION See independent auditor's report on the financial statements. 101 Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Cash flows from operating activities Cash received from customers and users 385,646$ 6,163,888$ 1,430,533$ 7,980,067$ Cash paid to suppliers of goods or services [409,516] [7,137,367] [1,187,563] [8,734,446] Cash paid to employees - - [288,556] [288,556] Other operating receipts 109 49,526 10,668 60,303 Net cash provided by [used in] operating activities [23,761] [923,953] [34,918] [982,632] Cash flows from investing activities Interest received ---- Cash flows from noncapital financing activities Transfers in --140,000 140,000 Net cash provided by [used in] noncapital financing activities --140,000 140,000 Net increase [decrease] in cash and cash equivalents [23,761] [923,953] 105,082 [842,632] Cash and cash equivalents, January 1 1,087,616 3,112,407 95,062 4,295,085 Cash and cash equivalents, December 31 1,063,855$ 2,188,454$200,144$ 3,452,453$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] [96,713]$ [1,032,391]$ [1,788]$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense - - 7,699 7,699 [Increase] decrease in inventory - - [16,406] [16,406] [Increase] decrease in deferred outflows - - 1,085 1,085 Increase [decrease] in accounts payable 158 - [2,120] [1,962] Increase [decrease] in accrued compensated absences - - [27,942] [27,942] Increase [decrease] in net pension liability - - 1,719 1,719 Increase [decrease] in KPERS OPEB liability - - 4,659 4,659 Increase [decrease] in claims payable 72,794 108,438 - 181,232 Increase [decrease] in deferred inflows --[1,824] [1,824] Net cash provided by [used in] operating activities [23,761]$ [923,953]$ [34,918]$ [982,632]$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS (Continued) COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 103 104 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund - To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund - To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund - To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund - To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund - To account for monies held by the police department for use in investigations. Citizenship agency fund - To account for donations received and used for the citizenship fund. Section 125 plan agency fund - To account for monies held for the Section 125 plan. DTF federal forfeiture fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund – To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund – To account for funds being held in escrow for bonds issued by Municipal Court. Special Fire Court Police Section Beechcraft Bail Assessment Insurance Payroll Bond and Investigation 125 DTF DTF Remediation Bond Escrow Proceeds Clearing Restitution Account Citizenship Plan Local Reserve Settlement Escrow Totals ASSETS: Cash and investments 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total assets 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ LIABILITIES: Accounts payable 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total liabilities 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ December 31, 2019 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS See independent auditor's report on the financial statements. Balance Balance December 31, December 31, 2018 Additions Deductions 2019 Cash and investments Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total Assets 312,065$ 448,888$ 490,857$ 270,096$ Accounts Payable Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total liabilities 312,065$ 448,888$ 490,857$ 270,096$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended December 31, 2019 AGENCY FUNDS See independent auditor's report on the financial statements. 106 67$7,67,&$/6(&7,21 2010Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount %Governmental activitiesNet investment in capital assets 113,001$ 96% 109,289$ 93% 112,929$ 94% 116,585$ 90% 115,589$ 90% 130,401$ 122% 124,635$ 108% 129,921$ 105% 144,846$ 109% 151,527$ 110%Restricted 988 1% 1,712 1% 1,082 1% 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2% 1,670 1%Unrestricted3,808 3% 6,333 5% 5,511 5% 11,628 9% 11,413 9% (24,922) -23% (10,505) -9% (8,232) -7% (13,759) -10% (14,839) -11% Total governmental activities net position117,797$100% 117,334$100% 119,522$100% 129,423$100% 127,878$ 100% 106,703$ 100% 115,868$100% 123,701$100% 133,453$ 100% 138,358$ 100%Business-type activitiesNet investment in capital assets 48,078$ 75% 44,227$ 63% 50,857$ 69% 57,103$ 75% 61,721$ 75% 68,107$ 80% 62,427$ 71% 63,316$ 71% 62,368$ 69% 63,301$ 68%Restricted 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,368 1%Unrestricted14,306 22% 24,528 35% 21,450 29% 17,794 23% 19,545 24% 15,610 18% 23,621 27% 24,255 27% 26,503 29% 28,883 31%Total business-type activities net position63,937$ 100% 70,308$ 100% 73,860$ 100% 76,450$ 100% 82,778$ 100% 85,229$ 100% 87,560$ 100% 89,083$ 100% 90,383$ 100% 93,552$ 100%Primary governmentNet investment in capital assets 161,080$ 89% 153,516$ 82% 163,786$ 85% 173,688$ 84% 177,311$ 84% 198,508$ 103% 187,062$ 92% 193,237$ 91% 207,213$ 93% 214,828$ 93%Restricted 2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% 3,878 2% 3,038 1%Unrestricted18,115 10% 30,867 16% 26,961 14% 29,422 14% 30,959 15% (9,312) -5% 13,116 6% 16,023 8% 12,744 6% 14,044 6%Total primary government net position181,736$100% 187,599$100% 193,382$100% 205,873$100% 210,658$ 100% 191,932$ 100% 203,428$100% 212,784$100% 223,835$ 100% 231,910$ 100%Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 20192019201820172013201120162014Schedule 1City of Salina, KansasNet Position by ComponentLast Ten Fiscal Years20152012Fiscal Year(accrual basis of accounting)(in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities: General government 10,845$ 13,614$ 11,278$ 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ Public safety 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 Public works 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 Public health and sanitation 1,365 1,368 1,383 1,369 347 995 1,095 1,126 1,256 1,156 Culture and recreation 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 Planning and development 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 Interest on long term debt 2,256 1,650 1,914 1,953 1,817 1,774 2,971 1,725 2,117 2,169 Total governmental activities expenses 55,128 55,212 53,298 53,221 54,340 52,077 53,918 54,811 59,145 59,479 Business-type activities: Solid waste disposal 3,010 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 Water and sewer 14,050 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,294 Sanitation 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,266 Golf course 817 825 723 768 837 821 792 852 926 888 Total business-type activities expenses 20,138 19,628 20,128 21,955 20,041 16,208 19,977 21,045 20,917 20,319 Total primary government expenses 75,266$ 74,840$ 73,426$ 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 79,798$ Program Revenues Governmental activities: Charges for services General government 5,143$ 6,106$ 6,328$ 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ Public safety 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 Public works 198 262 306 277 255 193 238 348 285 309 Public health and sanitation 37 43 46 34 46 46 44 50 47 46 Culture and recreation 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 Planning and development 144 153 158 161 167 73 140 91 150 104 Operating grants and contibutions 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 Capital grants and contributions - - - - - - 733 - - - Total governmental activities program revenues 15,723 16,377 17,351 16,342 15,900 12,958 15,150 14,642 14,710 14,271 Business-type activities: Charges for services Solid waste disposal 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 Water and sewer 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,255 Sanitation 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,276 Golf course 736 636 783 719 811 820 789 798 756 810 Operating grants and contributions - 202 - - - - - - - - Capital grants and contributions -3,804 274 -115 ---- - Total business-type activities program revenues 22,419 27,784 25,755 24,309 25,245 24,927 25,657 26,703 27,061 27,423 Total primary government program revenues 38,142$ 44,161$ 43,106$ 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,694$ Net (Expense) Revenue Governmental activities (39,405)$ (38,835)$ (35,947)$ (36,879)$ (38,440)$ (39,119)$ (38,768)$ (40,169)$ (39,800)$ (45,208)$ Business-type activities 2,281 8,156 5,627 2,354 5,204 8,719 5,680 5,658 6,143 7,103 Total primary government net expense (37,124)$ (30,679)$ (30,320)$ (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$(33,657)$(38,105)$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 7,803$ 7,783$ 8,272$ 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ Property taxes, debt service 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 Motor vehicle taxes 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 Sales tax, general purpose 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 Selective sales tax 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 Investment revenues 81 77 66 67 98 86 148 92 183 670 Miscellaneous 565 872 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 Transfers, net 92 199 30 999 787 3,819 3,600 4,309 4,831 4,781 Total governmental activities 33,440 35,097 35,481 45,748 38,569 43,448 47,851 48,002 48,034 50,111 Business-type activities: Investment revenues 67 84 79 49 51 56 78 129 233 - Miscellaneous 341 330 434 279 97 - - 103 153 846 Reimbursements 180 132 79 - Transfers, net (92)(199)(30)(950)-(3,781)(3,581) (4,367) (4,831) (4,781) Total business-type activities 316 215 483 (622)328 (3,593) (3,424) (4,135) (4,445) (3,935) Total primary government 33,756$ 35,312$ 35,964$ 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ Change in Net Position Governmental activities (5,965)$ (3,738)$ (466)$ 8,869$ 129$ 4,329$ 9,083$ 7,833$ 8,233 4,902 Business-type activities 2,597 8,371 6,110 1,732 5,532 5,126 2,256 1,523 1,698 3,169 Total primary government (3,368)$ 4,633$ 5,644$ 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 9,931$ 8,071$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Fiscal Year Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 2010 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved 99$ -$ -$-$-$-$-$-$-$-$ Nonspendable - 90 116 81 107 111 131 153 152 212 Restricted ------ -- -- Committed ------ -- -- Assigned - 293 540 331 239 199 136 214 340 274 Unreserved/unassigned 3,518 3,454 3,172 3,138 3,908 4,530 4,765 6,516 6,251 8,821 Total general fund 3,617 3,837$ 3,828$ 3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ Restatement 156 Restated fund balance 3,773$ All other governmental funds Reserved 6,413$ -$ -$-$-$-$-$-$-$-$ Nonspendable - - -- -- -- -- Restricted - 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 Committed - 127 (516) 7,486 9,886 8,695 14,284 10,072 7,325 8,086 Assigned - 4,323 4,087 3,146 1,280 619 1,043 641 1,227 963 Unreserved/unassigned (1,130) - - - - (10,537) (6,823) (28)(852)(7,804) Total all other governmental funds 5,283$ 8,061$ 6,890$ 14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Source: City of Salina Comprehensive Annual Financial Reports, 2010-2019 2011 (Note 1) Fiscal Year Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenues Taxes (see Schedule 5) 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Intergovernmental 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 Special assessments 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 Licenses and permits 11 6 8 9 7 10 7 6 3 4 Charges for services 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 Investment revenue 64 69 47 40 59 47 142 79 157 670 Reimbursements 70 32 36 9,015 123 491 1,406 - - - Donations 241 83 141 111 238 90 Miscellaneous 448 599 537 810 799 1,853 4,315 1,851 884 1545 Total revenues 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 58,774 Expenditures General government 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 Public safety 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 23,692 Public works 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 Public health and sanitation 1,332 1,330 1,343 1,344 319 982 1,078 1,097 1,236 1,121 Culture and recreation 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 Planning and development 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 Miscellaneous 32 - - - - - - - - - Capital outlay 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 Debt service Principal 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 Interest 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 Deposit to escrow 107 -92 ------- Total expenditures 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 78,262 Other financing sources (uses) Bonds and notes issued 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 Bond and note premium 47 23 60 185 302 369 1,503 95 70 443 Transfers in 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 Transfers out (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) Issuance costs - - - - - - - - - Other -156 - - - - --- - Total other financing sources (uses)7,173 9,046 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16,174 Net change in fund balance (11,898)$2,803$ 574$ 6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ Debt service as a percentage of non-capital expenditures 21% 17% 28% 18% 18% 20% 50% 16% 37% 28% Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Real estate 9,756$ 10,288$ 10,466$ 10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ Delinquent 278 274 245 248 235 279 246 210 276 190 Motor vehicle 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 General sales 11,117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 Selective sales 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7,240 6,975 Total taxes 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Assessed ValueFiscal (Budget) Year Real Estate Personal Property State AssessedTotal, Excluding Motor Vehicles Tax RateMotor Vehicle (Note 1)Total, Taxable Assessed ValueEstimated Total Market Value (Note 2)Assessed Value to Est. Market Value2010 358,979,211$ 24,760,806$ 13,730,609$ 397,470,626$ 25.855 50,330,252$ 447,800,878$ 2,893,359,541$ 15.482011 367,750,803$ 19,918,188$ 14,685,585$ 402,354,576$ 26.022 47,406,062$ 449,760,638$ 2,869,531,746$ 15.672012369,416,422$ 18,654,394$ 15,779,466$ 403,850,282$ 26.272 47,553,744$ 451,404,026$ 2,884,188,981$ 15.652013370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,889,385,914$ 15.712014376,131,346$ 13,652,885$ 17,670,147$ 407,454,378$ 27.080 48,865,900$ 456,320,278$ 2,917,267,724$ 15.642015381,087,426$ 12,607,815$ 18,984,453$ 412,679,694$ 27.311 50,350,566$ 463,030,260$ 2,957,531,741$ 15.662016389,872,825$ 11,653,719$ 19,323,055$ 420,849,599$ 27.603 51,833,505$ 472,683,104$ 3,046,949,034$ 15.512017399,918,216$ 10,900,308$ 19,671,685$ 430,490,209$ 27.311 50,970,796$ 481,461,005$ 3,097,885,103$ 15.542018403,835,383$ 10,130,718$ 20,485,144$ 434,451,245$ 26.129 53,336,677$ 487,787,922$ 3,150,409,123$ 15.482019421,108,311$ 11,173,863$ 22,113,195$ 454,395,369$ 28.394 54,687,311$ 509,082,680$ 3,294,115,685$ 15.45Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort.Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value.Source: Saline County ClerkNote 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value.Schedule 6City of Salina, KansasAssessed and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years112 City of Salina Saline County USD 305 (2) Other (1)Fiscal (Budget) YearOperating MillageDebt Service MillageTotal City MillageOperating MillageDebt Service MillageTotal County MillageOperating MillageDebt Service MillageTotal USD Millage Other2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.0552011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.4982012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.6572013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.7972014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.8792015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.0372016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.9992017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.1532018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.1402019 22.285 6.109 28.394 38.437 38.437 46.776 10.746 57.522 13.988 138.341Source: Saline County Treasurer(2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered bythese jurisdictions.Schedule 7City of Salina, KansasDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(rate per $1,000 of assessed value)(1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas StateExtension District #3.Total Taxpayer Type of Business Assessed Valuation% of Total RankAssessed Valuation% of Total Valuation RankEvergy (Westar Energy (Western Resources) Utility 5,191,056$ 1.55% 4 13,682,027$ 3.01% 1SFC Global Supply Chain, Inc. (Schwan's) Pizza Manufacturing 10,144,446 3.03% 1 6,855,966 1.51% 2Kansas Gas Service Utility 3,449,876 1.03% 7 4,415,353 0.97% 3RAF Salina LLC Retail Shopping Mall 8,704,250 2.60% 2 4,296,499 0.95% 4S&B Motels Motel - 3,774,927 0.83% 5Central Mall Realty Holding LLC Regional Shopping Center - 2,868,321 0.63% 6Union Pacific Railroad - 2,570,668 0.57% 7Menard Inc. Home Improvement - 2,465,098 0.54% 8Individual Residential - 2,440,724 0.54% 9Sams Real Estate Business Trust/Walmart Discount Retail Stores - 2,286,508 0.50% 10Wal-mart Real Estate Business Trust Discount Retail Stores 3,913,855 1.17% 5 -Great Plains Manufacturing Manufacturing 2,526,984 0.75% 10 -Gateway Properties Shopping Mall (Midstate) 3,556,009 1.06% 6 -Southwestern Bell Telephone Utility 3,455,419 1.03% 8 -Sunflower Bank Banking Institution 2,749,200 0.82% 9 -Salina Regional Health Center Hospital and Medical Offices 5,584,461 1.67% 3 -Combined Valuation of the Ten Largest Taxpayers 49,275,556$ 45,656,091$ City Valuation335,262,182$ 454,395,369$ Percent of Total City Assessed Valuation14.70% 10.05%Source: Saline County Clerk's Office or recent OSSchedule 8City of Salina, KansasPrincipal Property TaxpayersCurrent Year and Ten Years Ago2010 (2009 Assessed Value) 2019 (2018 Assessed Value) Fiscal (Budget) Year Taxes Levied for the fiscal year Amount Percentage Delinquent Collections (1) Amount Percentage of levy 2010 10,276,905$ 9,704,937$ 94.4% 278,656$ 9,983,593$ 97.1% 2011 10,415,491$ 10,287,770$ 98.8% 273,843$ 10,561,613$ 101.4% 2012 10,570,420$ 10,411,299$ 98.5% 245,086$ 10,656,385$ 100.8% 2013 10,576,448$ 10,145,404$ 95.9% 248,184$ 10,393,588$ 98.3% 2014 10,908,147$ 10,776,688$ 98.8% 398,820$ 11,175,508$ 102.5% 2015 11,316,065$ 10,460,246$ 92.4% 617,496$ 11,077,742$ 97.9% 2016 11,740,993$ 10,972,299$ 93.5% 245,577$ 11,217,876$ 95.5% 2017 11,254,398$ 11,239,051$ 99.9% 209,950$ 11,449,001$ 101.7% 2018 11,260,358$ 10,803,591$ 95.9% 276,340$ 11,079,931$ 98.4% 2019 12,201,319$ 12,028,761$ 98.6% 376,578$ 12,405,339$ 101.7% Source: Saline County Treasurer's Office (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Current Year Tax Distributions Total Tax Distributions Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019City Direct Tax RateGeneral 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%Special purpose 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.75% 0.75% 0.75%County-wide Tax Rate1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Portion of County-wide tax allocated to City (July Percentage)61.58% 63.34% 61.72% 60.86% 60.23% 60.28% 60.28% 60.28% 59.85% 60.33%Source: Kansas Department of RevenueSchedule 10City of Salina, KansasDirect Sales Rate by Taxing EntityLast Ten Fiscal YearsIn addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016.Fiscal Year 2018 2019# Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts WaterRate Class Billed Sold Billed Sold Billed SoldBilled Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential 17,838 1,127,864 17,899 1,194,629 17,893 1,225,931 17,966 989,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 18,130 963,387 18,155 864,810 Commercial 1,568 350,633 1,574 372,499 1,565 38,547 1,579 348,968 1,599 353,675 1,600 350,767 1,603 345,232 1,606 345,250 1,614 340,960 1,607 352,051 Industrial 44 183,166 44 180,277 42 174,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 Government 85 42,714 97 55,910 99 54,618 99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 Apartment 172 71,121 168 72,562 169 70,263 168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 Schools 85 46,386 85 53,679 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 Industrial special 1 44,457 1 44,051 1 40,448 1 20,439 - - - - - - - - - - - - Consumed in production 17 32,604 13 22,728 12 19,266 12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 Rural water 1 23,854 1 28,621 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 Hospitals 12 18,503 10 15,674 10 17,896 9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 Religious/non profit 39 5,569 38 5,690 38 5,399 37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 Other taxable deductions - - - 699 - - - - - - - - - - - - - - - - Engineering studies 8 5,266 7 3,754 8 6,104 8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 Providing taxable service 2 5,494 2 4,827 2 6,118 2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 Sale of component parts 8 5,851 8 5,454 8 5,726 6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 Fire hydrant 3 2,424 3 1,389 4 2,533 3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 Industrial consumed in production 3 4,083 3 3,260 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 Sales of farm equipment 1 213 1 56 1 83 1 107 1 48 1 53 1 54 1 104 1 56 1 124 19,887 1,970,202 19,954 2,065,759 19,937 1,754,027 20,018 1,793,771 20,111 1,801,577 20,153 1,779,999 20,193 1,717,766 20,192 1,753,343 20,196 1,734,098 20,210 1,621,853 Water Rate Schedule:Monthly meter charge (5/8") 4.51$ $4.60 $4.74 $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 $5.94Commodity charge (per 000 gal.):0 - 2000 gal. 2.55$ $3.77 $3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 $5.132001 - 10,000 galOver 10,000 gal.Excess use charge 5.10$ $7.54 $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 $10.26Wastewater Rate Schedule:Monthly base charge 6.42$ $6.57 $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 $8.08Unit cost (per 000 gal.): 3.08$ $4.48 $4.61 $4.79 $4.94 $5.01 $5.19 $5.29 $5.51 $5.70Water sold is expressed in thousands of gallons.Number of Accounts billed is the annual number of billings for each class divided by 12.Monthly meter charge increases with the size of the meter.Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption.2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rateSource: City of Salina Water Customer Accounting Office.2012Schedule 11City of Salina, KansasWater Sales by Class of CustomerLast Ten Fiscal Years2011 2014 201720162010 2013 2015 Fiscal YearGeneral Obligation Bonds Loans Payable Capital Lease Temporary NotesGeneral Obligation BondsWater Revenue Bonds Loans PayableTemporary NotesTotal Primary GovernmentPercentage of Personal Income Per Capita2010 53,120,952$-$-$ 2,500,000$ 8,614,576$ 1,580,000$ -$ -$ 65,815,528$ 3.8% 1,425.20$ 2011 55,225,670$-$-$ 3,400,000$ 7,417,907$ 16,193,925$-$ -$ 82,237,502$ 4.3% 1,723.80$ 2012 49,109,575$-$-$ 1,485,000$ 9,613,926$ 15,850,228$-$ -$ 76,058,729$ 3.8% 1,583.07$ 2013 49,631,797$-$-$ 3,800,000$ 8,519,799$ 15,226,532$-$ -$ 77,178,128$ 3.7% 1,613.05$ 2014 50,033,555$-$ 176,235$ 5,000,000$ 9,587,351$ 14,592,836$ 6,208,102$ -$ 85,598,079$ 4.1% 1,788.25$ 2015 50,840,632$-$ 479,366$ 5,995,000$ 8,539,773$ 13,949,139$ 5,753,620$ -$ 85,557,530$ 4.1% 1,789.42$ 2016 51,816,399$ 12,157,127$ 321,174$ 11,505,000$ 7,640,381$ 13,285,443$ 7,432,024$ -$ 104,157,548$ 5.0% 2,200.39$ 2017 55,994,305$ 12,171,090$ 157,868$ 6,811,742$ 6,520,433$ 12,606,747$ 8,862,810$ -$ 103,124,995$ 4.9% 2,194.43$ 2018 51,968,310$ 12,185,053$ -$ 18,123,505$ 5,282,578$ 11,898,051$ 10,632,351$ -$ 110,089,848$ 4.9% 2,342.64$ 2019 54,607,702$ 12,640,000$ -$ 11,170,000$ 4,102,298$ 10,330,000$ 46,354,852$ -$ 139,204,852$ 6.0% 2,979.81$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019Governmental Activities Business-Type ActivitiesSchedule 12City of Salina, KansasRatio of Outstanding Debt by TypeLast Ten Fiscal Years Fiscal YearGeneral Obligation Bonds Capital LeaseTemporary Notes TotalLess Debt Service FundNet General Bonded DebtPercentage of Actual Taxable Value of Property Per Capita2010 61,735,528$-$ 2,500,000$ 64,235,528$ 571,873$ 63,663,655$ 14.2% 1,378.60$2011 62,443,577$-$ 3,400,000$ 65,843,577$ 1,236,026$ 64,607,551$ 14.4% 1,354.26$2012 58,723,501$-$ 1,485,000$ 60,208,501$ 582,412$ 59,626,089$ 13.2% 1,241.05$2013 58,151,596$-$ 3,800,000$ 61,951,596$ 707,763$ 61,243,833$ 13.5% 1,280.02$2014 59,620,906$ 176,235$ 5,000,000$ 64,797,141$ 407,864$ 64,389,277$ 14.1% 1,345.17$2015 59,380,405$ 479,366$ 5,995,000$ 65,854,771$ 745,339$ 65,109,432$ 14.1% 1,361.75$2016 59,456,780$ 321,174$ 11,505,000$ 71,282,954$ 1,248,914$ 70,034,040$ 14.8% 1,479.51$2017 62,514,738$ 157,868$ 6,811,742$ 69,484,348$ 1,509,863$ 67,974,485$ 14.1% 1,446.45$2018 57,250,888$-$ 18,123,505$ 75,374,393$ 1,851,358$ 73,523,035$ 15.1% 1,564.52$2019 58,710,000$-$ 11,170,000$ 69,880,000$ 1,851,358$ 68,028,642$ 13.4% 1,456.22$Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019General Bonded Debt OutstandingSchedule 13City of Salina, KansasRatio of Net General Bonded Debt OutstandingLast Ten Fiscal Years City of Salina, Kansas Direct and Overlapping Governmental Activities Debt Jurisdiction Net General Obligation Bonded Debt Outstanding Percentage Applicable to City of Salina Amount Applicable to the City of Salina Direct: City of Salina 73,523,035$ 100.00%73,523,035$ Overlapping: Salina Airport Authority 20,175,000 100.00% 20,175,000 Saline County 220,693 73.98% 163,268 USD 305 109,280,000 93.20%101,854,179 Total Overlapping Debt 129,675,693 122,192,447 Total Direct and Overlapping Debt 203,198,728$ 195,715,482$ Per Capita Direct and Overlapping debt 4,093.35$ Source: Saline County Clerk Schedule 14 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. As of December 31, 2019 Assessed Valuation 509,082,680$ Debt Limit (30% of Assessed Value) 152,724,804 Debt applicable to limit:Total Bonded Debt 118,785,263$ Less GO Debt Attributable to Exempt Purposes (4,116,514) Less Revenue Bonds (11,122,175) Less Capital Leases -Less Loans Payable (34,738,703) Less Fund Balance designated for Debt Service (1,142,418) Total Debt Applicable to Limitation 67,665,453$ Legal debt margin 85,059,351$ 2010201120122013201420152016201720182019Debt Limit 134,340,263$ 134,928,191$ 135,421,208$ 136,196,966$ 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 152,724,804Total net debt applicable to limit 58,411,185 57,747,032 49,309,445 52,724,034 54,625,691 56,090,293 62,072,485 61,296,184 68,240,457$ 67,665,453$Legal debt margin 75,929,078$ 77,181,159$ 86,111,763$ 83,472,932$ 82,270,392$ 82,818,785$ 79,732,446$ 80,704,353$ 78,095,920$85,059,351$Total net debt applicable to the limit as a percentage of debt limit43% 43% 36% 39% 40% 40% 44% 43% 47% 44%Last Ten Fiscal YearsFiscal YearLegal Debt Margin Calculation for 2019Schedule 15City of Salina, KansasLegal Debt Margin Utility Service Less Operating Net Available Debt Service Fiscal Year Charges Expenses Revenue Principal Interest Coverage 2010 16,565,880$ 11,803,594$ 4,762,286$ 740,000$ 91,450$ 5.73 2011 17,976,508$ 11,905,114$ 6,071,394$ 1,580,000$ 496,760$2.92 2012 19,163,426$ 12,222,431$ 6,940,995$ 340,000$ 596,992$7.41 2013 17,974,089$ 13,373,088$ 4,601,001$ 620,000$ 590,191$3.80 2014 18,964,164$ 12,112,288$ 6,851,876$ 630,000$ 577,791$5.67 2015 19,139,612$ 9,859,974$ 9,279,638$ 640,000$ 565,191$7.70 2016 19,389,348$ 11,800,473$ 7,588,875$ 660,000$ 549,191$6.28 2017 19,958,862$ 13,148,035$ 6,810,827$ 675,000$ 529,391$5.65 2018 20,382,469$ 12,973,621$ 7,408,848$ 705,000$ 509,141$6.10 2019 20,842,606$ 13,269,741$ 7,572,865$ 725,000$ 487,991$6.24 Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 City of Salina Debt Service Schedules Water/Sewer Revenue Bonds Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Debt Service Fiscal Year PopulationPer Capita Personal Income (Saline County)Personal Income, Salina (interpolated)Unemployment RateLabor Force, City of SalinaUSD 305 HeadcountPercentage Free and Reduced LunchCity .5 cent sales taxPer Capita .5 cent sales TaxAs a % of per capita personal income2010 46,180 37,880$ 1,749,298,400$ 6.7% 26,379 7,346 57.8% 4,803,553$ 104.02$ 0.275%2011 47,707 40,512$ 1,932,705,984$ 6.7% 26,258 7,289 58.7% 5,076,751$ 106.42$ 0.263%2012 48,045 41,762$ 2,006,455,290$ 6.3% 26,185 7,305 59.1% 5,241,205$ 109.09$ 0.261%2013 47,846 43,078$ 2,061,109,988$ 5.1% 26,441 7,305 60.7% 5,326,723$ 111.33$ 0.258%2014 47,867 43,736$ 2,093,511,112$ 5.3% 26,303 7,388 61.3% 5,555,601$ 116.06$ 0.265%2015 47,813 44,065$ 2,106,879,845$ 3.9% 26,170 7,369 61.8% 5,670,040$ 118.59$ 0.269%2016 47,336 44,230$ 2,093,647,612$ 3.3% 27,684 7,386 68.7% 5,727,260$ 120.99$ 0.274%2017 46,994 44,732$ 2,102,135,608$ 2.7% 27,684 7,176 62.1% 5,755,869$ 122.48$ 0.274%2018 46,994 47,945$ 2,253,127,330$ 3.3% 30,174 7,180 61.7% 5,770,174$ 122.79$ 0.256%2019 46,716 49,983$ 2,335,005,828$ 2.9% 30,094 7,245 59.2% 5,968,961$ 127.77$ 0.256%Sources:Increase in per capita Sales Tax (10 years) 22.8%Population: Kansas Division of the Budget. Increase in per capita Personal Income 32.0%Personal income for Salina is derived from the population and per capita personal income for Saline CountyPer Capita Personal income as reported by the Bureau of Economic Analysis2019 Per Capita Personal Income staff projection2010-2019 Employment City of SalinaUSD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget DocumentEmployment: Kansas Department of LaborSchedule 17City of Salina, KansasDemographic and Economic StatisticsLast Ten Fiscal YearsFree and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2018-2019 school year is reported as 2018. Employer Type of Business Employees RankPercentage of Labor Force Employees RankPercentage of Labor ForceSalina Regional Health Center Health Care 2,093 2 7.9% 1,875 1 6.2%Schwan's Global Supply Chain Frozen Pizza Manufacturing 1,850 1 7.0% 1,700 2 5.6%Unified School District No 305 Public School System 935 3 3.5% 1,500 3 5.0%Great Plains Manufacturing Agricultrual & Landscaping Equipment 650 5 2.5% 1,100 4 3.7%Exide Technologies Automotive Battery Manufacturer 800 4 3.0% 600 5 2.0%City of Salina City Government 493 7 1.9% 425 6 1.4%Salina Vortex Manufacturing - 375 7 1.2%REV Group Manufacturing - 300 8 1.0%Walmart Retail - 250 9 0.8%Signify Fluorescent Lamps 600 6 2.3% 190 10 0.6%Raytheon Aircraft Aircraft Manufacturing 357 8 1.4% -Eldorado National Busses/Recreational Vehicle 255 9 1.0% -OCCK Disability Services 263 10 1.0% -Total8,296 31.4% 8,315 27.6%Source: Salina Chamber of CommerceSchedule 18City of Salina, KansasPrincipal EmployersCurrent Year and Nine Years Ago2010 2019