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Transcript of Proceedings
TRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE OF $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Legal Opinion Gilmore & Bell, P.C. Kansas City, Missouri DATED APRIL 29, 2020 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 CLOSING LIST Copies of the transcript of proceedings for the above referenced issue (the "Bonds"), will be prepared and distributed as follows: 1. City of Salina, Kansas (the "Issuer") 2. Attorney General of the State of Kansas 3. Robert W. Baird & Co., Inc. (the "Original Purchaser") 4. Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor") 5. Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel") Document Number PROCEEDINGS AUTHORIZING THE IMPROVEMENTS 1. Landfill Cell #20 2. Smoky Hill River Renewal 3. Police Parking 4. Golf Irrigation 5. North 9th Street Bridge PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS 6. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 20-7814 7. Resolution No. 20-7814 authorizing the offering for sale of the Bonds 8. Notice of Sale, Preliminary Official Statement and Certificate Deeming Preliminary Official Statement Final 9. Affidavit of publication of the Summary Notice of Sale in The Salina Journal 10. Affidavit of publication of the Summary Notice of Sale in the Kansas Register 11. Official Statement 12. Continuing Disclosure Undertaking 13. Excerpt of Minutes of the governing body meeting evidencing adoption of first reading of Ordinance No. 20-11029 14. Excerpt of Minutes of the governing body meeting evidencing acceptance of the best bid of the Original Purchaser and passage of Ordinance No. 20-11029 and adoption of Resolution No. 20-7816 15. Ordinance No. 20-11029 authorizing the issuance of the Bonds 16. Summary of Ordinance No. 20-11029 and Affidavit of Publication of Summary Ordinance No. 20-11029; City Attorney Certificate 17. Resolution No. 20-7816 prescribing the form and details of the Bonds CLOSING DOCUMENTS 18. Transcript Certificate Exhibit A -Schedule of Outstanding General Obligation Indebtedness 19. Uniform Facsimile of Signature Certificates 20. Specimen Bond 21. Agreement Between Issuer and Agent 22. DTC Documents Blanket Letter of Representations Underwriting Safekeeping Agreement 23. Rating Letter Moody's Investors Service 24. Closing Certificate 25. Federal Tax Certificate with attachments as follows: Exhibit A Debt Service Schedule and Proof of Bond Yield Exhibit B IRS Form 8038-G Exhibit C-1 Exhibit C-2 ExhibitD Exhibit E Exhibit F Purchaser's Receipt for Bonds and Issue Price Certificate Municipal Advisor's Certificate Regarding the Competitive Sale Description of Property Comprising the Financed Facility and List of Reimbursement Expenditures Sample Annual Compliance Checklist Sample Final Written Allocation 2 LEGAL OPINIONS 26. Approving legal opinion of Gilmore & Bell, P.C. 27. Approval letter of Attorney General MISCELLANEOUS DOCUMENTS 28. Closing Letter 29. Letter from State Treasurer Confirming Registration Number 30. Authorization of State Treasurer to use facsimile signature and seal 3 ' ! I I CITY OF SAUNA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS February 11, 2019 4:00p.m. The Oty Commission convened at~ p.m. for Insurance Broker Services Update and at 3:45 p.m. for Otizens Forum at City-County Building, Room 1078. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppoclc, and Karl Ryan. Also present: Michael Schrage, Oty Manager; Greg Ben~, Oty Attorney; and Shandi Wicks, OtyClerk. AWARDS AND PROCLAMATIONS (3.1) The week of February 17 through 23, 2019 as nEngineers Week" in the city of Salina. Jeff Drees, President of the Smoky Valley Chapter of Kansas Society of Professional Engineers, ·read the proc:lamation and announced associated events. CmZENS FORUM None. PuBuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSE\'T AGENDA (6.1) Approve the minutes of February 4, 2019 special meeting. (6.2) Approve the minutes of February 4, 2019 regular meeting. (6.3) Approve Resolution No. 19-7669 appointing members to the Accessibility Advisory Board, Animal Control Advisory and Appeals Board, Arts and Humanities Commission, Building Advisory Boar<t Heritage Commission, Human Relations Commission, Parks and Recreation Advisory Committee, Planning Commission and Tree Advisory Board. Commissioner Hay commented that he had talked with a lot of young individuals about serving on boards and was happy to see the number of applications submitted. Mayor Davis asked Commissioner Hay to read the names of the board members appointed. 19-0030 Moved by Commissioner R)'B"* seconded by Commissioner Hodges, to approve the consent agenda as presented. Aye: (5). Na)•: (0). Motion canied. ADMINISTRATION Mayor Da\ris moved Item 7.10 to the beginning of the administration items. He also asked for Item 7.2 to be moved to follow Item 7.6. Page 1 (7.10) Resolution No. 19-7673 authorizing the city manager to enter into an agreement with Smart Security, Inc. for security services at the Salina Municipal Court. Michael Schrage, City Manager, explained the bids received, agreement, fiscal impact and action options. Mayor Davis asked if staff was aware of the cost difference of the hourly rate in the bids received. Judge Stoss stated in the information provided in the proposals the employee hourly salary was about the same in all bids received with the total hourly rate covering administration and overhead costs. Moved by Commissioner Hay, seconded by Commissioner Hoppock, to adopt Resolution No. 19- 7673 authorizing the city manager to enter into an agreement with Smart Security, Inc. for security services at the Salina Municipal Court. Aye: (5). Nay: (0). Motion carried. (7.1) Second reading Ordinance No. 19-10993 authorizing the execution of a Loan Agreement with the State of Kansas for the purpose of financing the Markley/Magnolia Sewer System Improvements. Mayor Davis noted that Ordinance No. 19-10993 was passed on first reading on February 4, 2019 and since that time no comments have been received. 19-0032 Moved by Commissioner Hodges, seamded by Commissioner Hoppock, to adopt Ordinance No. 19-10993 authorizing the execution of a Loan Agreement with the State of Kansas for the purpose of financing the Markley/Magnolia Sewer System Improvements on second reading. A roll call vote was taken. Aye: (5) Hay, Hodges, Hoppock, Ryan, Davis. Nay: (0). Motion carried. (7.3) Resolution No. 19-7670 authorizing the acceptance of the 2018 People's Oloice Sculpture and its placement on public property, located at 211 West Iron Avenue. Brad Anderson, Director of Arts & Humanities, explained the Sculpture Tour, People's Choice winner, placement location, fiscal impact and action options. 19-0033 Moved by Commissioner Hodges, seconded by Commissioner Ha)'• to adopt Resolution No. 19- 7670 authorizing the acceptance of the 2018 People's Choice Sculpture and its placement on public property, located at 211 West Iron Avenue. Aye: (5). Nay: (0). Motion carried. (7.4) Resolution No. 19-7657 approving an updated and restated Community Art and Design policy. · Brad Anderson, Director of Arts &t Humanities, explained the modifications to the Community Art and Design (CAD) policy and action options. Greg Bengtson, City Attorney, provided information pertaining to the role of the Arts and Humanities Commissioner serving on the CAD Committee. Commissioner Hodges thanked staff for their work to combine the documents into one policy. She then asked II the policies were in active use and if they were used to adopt best practices. Mr. Anderson stated yes, the policies were in active use. Commissioner Hodges asked if an organizational chart could be created to describe the roles of the CAD Committee, CAD Project Site Committee, Salina Arts & Humanities Commission, City Commission and Arts and Humanities staff. Mr. Anderson stated that there was an organizational chart available that staff could provide to the commission. He Pagc2 19-0034 provided information on the representation of the CAD Committee. Grace Peterson_ Arts Services Coordinator, further explained the representation of the project site committee. A conversation ensued between Commiaioner Hodges, Ms. Peterson and Mr. Anderson regarding the makeup of the CAD Committee and the CAD Project Site Committee. Commissioner Hodges asked ii the spending authority for the City Manager's office was $20,000. Michael Schrage, Oty Manager, stated yes. A conversation ensued between Mr. Schrage and Commissioner Hodges on the spending authority of departments. Commissioner Hodges asked for information on the purchasing authority change. Mr. Anderson stated it was simply to bring the purchasing authority into alignment with other departments. J<arla Prickett, 914 E. Republic, provided her thoughts on the maintenance of the art pieces and the need for closer monitoring and heavier maintenance of the art pieces. She provided information on the art piece of the Water Plant and the North Ohio overpass. Mr. Anderson stated the custodial deparbnent was to be responsible for the maintenance of the art pieces but Arts and Humanities had blken on the role of monitoring the art pieces. He continued to state there was a line item included in the budget for 2019 that would cover maintenance for the art pieces. He further stated that the CAD Advisory Committee would be re\•iewing the maintenance list and prioritizing the maintenance to bring back to the City Commission for review. Mr. Schrage thanked staff for their diligence in reviewing maintenance as part of the proposal process for new art pieces. Commissioner Hodges asked for a copy of the assessment report and would like to be kept in the loop when the art maintenance plan was developed. Ms. Peterson provided information on the maintenance of the art pieces. Mo\•ed by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7657 approving an updated and restated Community Art and Design policy. Aye: (5). Nay: (0). Motion carried. (7.5) Resolution No. 19-7671 authorizing the City Manager to execute Memorandums of Agreement with Dickinson County, Ellsworth County, Harvey County, Lincoln County, McPherson County, Ottawa County and Reno County for contingency and/ or overflow support for 911 services. Wayne Pruitt, Director of Emergency Communications, explained the agreements, 911 services and action options. Commissioner Hoppock asked if there had been a time when calls were rolled to other counties or other counties rolled to us. Mr. Pruitt stated Salina had not had any calls rolled to another county but have had to take on calls from Didcinson County. Commissioner Hodges asked what PSAP stood for. Mr. Pruitt stated public safety answering point. Mayor Davis asked if another county answers the call, what would happen. Mr. Pruitt stated there was an opportunity for radio communication along with email and phone communication. Page3 19-0035 I Moved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 19- 7671 authorizing the City Manager to execute Memorandums of Agreement with Dickinson Count)•, Ellsworth County, Harve)' County, Lincoln County, McPherson County, Ottawa County and Reno County for contingency and/or overflow support for 911 services. A)re: (5). Nay: (0). Motion carried. (7.6) Authorize the Oty Manager to collaborate with representati\res of Saline County to pursue special legislation to create statutory for a county-wide emergency communications district. Michael Schrage, Cit)• Manager, explained the request and action options. Commissioner Hoppock provided his thoughts on the project and the request He also asked if legislation had been approved at the state level before for something like this. Mr. Schrage stated there were similar districts such as the airport authority and library. Commissioner Hoppock asked if the legislation would go to both the house and the senate and who it would go to first Mr. Schrage stated jt would go to both the house and the senate and Andrew Manley with Saline County was currentl)' in conversation with state representatives to see il a representative would be interested in introducing the legislation. Commissioner Ryan asked if the creation of the legislation would be of the expertise of the city and county or would it be outsourced. Mr. Schrage stated it would be written by city and count)• staff along with legal counsel and the state representative. Commissioner Hay asked how soon it would be completed. Mr. Schrage stated he was not able to answer that question. Daniel Eckhoff, 2664 Highland, asked il there was a tax specifically tied to the district Mr. Schrage stated they would be a district that would have taxing authority. Commissioner Hodges asked if this request represented a decision on what the project would look like. Mr. Schrage stated jt was a funding option at this point. 19-0036 Moved by Commissioner R)•an, seconded by Conunissioner Hoppodc, to authorize the Oty Manager to collaborate with representatives of Saline County to pursue special legislation to aeate statutory for a county-wide emergency communications district Aye: (5). Nay: (0). Motion carried. The Cit)' Commission recessed at 5:29 p.m. for a 5 minute break. The meeting resumed at 5:35 p.m. (7.2) Resolution No. 19·7667 authorizing the Mayor to execute an agreement with SC:S Engineers to perform professional engineering services for the Salina Municipal Solid Waste Landfill. Jim Teut5ch, Openstions Manager, explained the project, fiscal impact and action options. Mayor Da\•is provided a clarification to the task list within the blue sheet. Mr. Teutsch thanked him for the clarification. Commissioner Hodges asked when the waste and recycling characteriution study would be available. Mr. Teutsch stated sometime in 2020. 19-0037 Moved b)' Commissioner Hay, seconded by Commissioner Hoppock-to adopt Resolution No. 19- 7667 authorizing the Mayor to execute an agreement with SCS Engineers to pe~form professional Page4 i I 19-0038 engineering services for the Salina Municipal Solid Waste Landfill. Aye: (5). Nay: (0). Motion carried. (7.7) Resolution No. 19-7672 authorizing and providing for construction of certain improvements relating to the City's Solid Waste Facility as described in the Landfill Cell 20 project; and authorizing the issuance of Tempormy Notes and/or General Obligation Bonds of the dty to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the request, project, fiscal impact and action options. Commissioner Hay asked what the balance was in the solid waste fund. Ms. Pack stated approximately $890,000. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 19- 7672 authorizing and providing for construction of certain improvements relating to the Oty's Solid Waste Facility as described in the Landfill Cell 20 project; and authorizing the issuance of Temporary Notes and/or General Obligation Bonds of the city to pay the costs thereof. Aye: (S). Nay: (0). Motion carried. (7.8) Award contract for Mwtidpal Solid Waste Landfill Facility Cell 20 Construction, Project No. 80019. Dan Stack, City Engineer, explained the project, fiscal impact and action options. Commissioner Hoppock asked what the amount for the bonds was. Debbie Pack, Director of Finance &: Administration, stated the request was for the budgeted amount and staff would only issue bonds to cover the costs of the project. Commissioner R)ran asked why Cel.13, 4, and 5 were still open. Mr. Stack stated the cells remained open so they would continue to be used. Commissioner Hay asked why we were opening a new cell instead of using the existing cells. Mr. Stade stated once cells were built next to the existing cells then the existing cells could be added to. A conversation ensued between the City Commission and Mr. Stack regarding the cells. Commissioner Hodges asked if a soil deficit would be a long term problem. Mr. Stack stated it was a large deficit and at some point there would be a need for additional soil from another location to fill the deficit 19-0039 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to award contract for Municipal Solid Waste Landfill Facility Cell 20 Construction, Project No. 80019 to Unruh Excavating, LLC, in the amount of Sl,645,289.65 with a 5% construction contingency of S82_264.48. Aye: (5). Na)': (0). Motion carried. (7.9) Consideration of recommendations regarding the sanitation plan. Jim Kowach, Director of Public Works, explained the recommendations and action options. Commissioner Ryan asked if staff thought they could handle 2,000 customers for the subscription program. Mr. Kowach stated at 510 a month the number of customers would ha\'e to be at least 2,000 customers and if there were additional customers there would be an overhead capital cost for an additional truck and staff person. Pases !! i I A conversation ensued between Mr. Kowach and the City Commission regarding the recommendations provided. Commissioner Hoppock asked what the tonnage was that was collected. for the PILOT program versus the drive-thru recycling center. Jim Teutsch, Operations Manager, stated the PILOT program collected 150 tons annually and.the drive-thru facility had collected 300 tons so far. Commissioner Hay provided his thoughts on the expanded subscription recycling program. Mayor Davis asked how much was collected by Images Recycling. Mr. Teutsch stated approximately 900 to 1000 tons annually. Commissioner Hodges asked if the current packer truck would be used for recycling collection. Mr. Teutsch stated yes. Michael Schrage, City Manager, explained the reason why the question was broken out and staffs hope was to gather an affirmative direction from the City Commission l'Onight. Commissioner Ryan provided his thoughts on mandatory recycling. Commissioner Hoppock also provided his thoughts on mandatory recycling. Commissioner Hay asked if the current subscription would have to have 2,000 customers to break even. Mr. Teutsch stated the maximum customers for the current setup would be 2,000 customers. Commissioner Hodges stated her concerns for alley trash collection, recycling collection and )'ard waste collection. Commissioner Hodges asked if staff ever thought we should be in the business of collecting trash. Mr. Teutsc:h stated yes, the citizens' vote for the service every month by paying their bill. He continued to provide information on sanitation collection. Commissioner Hodges asked if there had been any thoughts about continuing universal curb side recycling with the current bucks we have along with the repurposing refuse containers for recycling purposes. Mr. Teutsch stated there would be an increase in the number of trucks on the road &om h\ro trucks to five trucks, increasing the number of crews on the street and pro\•ided his thoughts on the option. Mr. Schrage stated part of the dilemma we've been facing all along was trying to create a balance for providing the services at a competitive rate. He continued to note the monthly rates of the sanitation sen'ices available to citizens in the community. A con,•ersation ensued between the City Commission, Mr. Schrage and Mr. Teutsch regarding aul'Omated trash pickup, the recycling options and the sanitation services available by the competitors. Commissioner Hoppock thanked the individuals involved in all the work on this item. He continued to provide his thoughts on the options and asked if we turned over the basic trash collection to private haulers would that allow us to take the time to be proactive to make recycling collection more beneficial. Mayor Oa\•is stated he had not lived in a city that did not collect the trash and provided his thoughts on the options. Mr. Teutsch and Mr. Schrage provided information on franchising out trash service and the Page6 19-0041 collection fees. Mr. Kowach provided information on the subscription recycling program. A conversation ensued between the Commissioners and Mr. Kowach on the subscription recycling program. Joan Ratzlaff, Salina, provided information from the strategic plan and her thoughts on the recommendations included in the agenda item and the need for education and outreach to citizens in the community. She provided information to the City Commission on grant opportunities available . .Moved by Commissioner Hodges, seconded by Commissioner Ryan, to continue alley collection in the sanitation plan. Aye: (5). Nay: (0). Motion carried. Mo\'ed by Commissioner R)•an, seconded by Commissioner Hay, to concur with City staff and the Solid Waste Management Conunittee to provide 95-gallon containers for standard refuse service. Aye: (5). Nay: (0). Motion carried. A conversation ensued between the City Commission, Mr. Schrage and Mr. Teutsch regarding the cart size availability for sanitation collection. 19-0042 Mo\'ed by Commissioner Hoppock, seconded by Commissioner Ryan, to no universal community wide req•cling at this time. Aye: (4). Nay: (1) Hodges. Motion carried. Mr. Kowach stated the current subscription program could continue until a future date. 19-0043 Moved by Commissioner Hay, seconded by Commissioner Hodges, to have City staff continue to pursue the details of a subscription of curbside rec)•cling program within 45 days. Aye: (5). Nay: (0). Motion carried. 19-0044 Moved by Commissioner Hodges, seconded by Commissioner Hay, to have City staff continue to pursue the details of a continuation of yard waste collectibn with a study session soon. Aye: (5). Nay: (0). Motion carried. Mr. Kowach stated it would be semi-automated allowing for placement of carts, bags or bundles. Commissioner Hodges asked for information on the costs of collection of yard waste to be provided in the study session. DEVELOPMEt'1T BUSINESS None. OTHER BUSINESS Michael Schrage, City Manager, stated he had disbibuted additional information to the City Commission upon the request of Lisa Graham who w~ in attendance at the meeting today and plalU\ed to present to the Oty Commission on Februuy 25, 2019. Mayor Davis stated the City Commission had legitimate concerns on the budgetary aspects of recycling and need to task ourselves with thinking about recycling and what we want and what it means to us. ADJOURNMENT Page7 19-0045 Moved by Commissioner Hodges, seconded by Commissioner Hay, that the regular meeting of the Board of Oty Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 7:22 p.m. !! -I I [SEAL] ~.~r' TrentW. Davis, M.D., Ma)'Or ATIEST: • ~ID~ Shandi Wicks, CMC, City Oerk Page8 ~. ! g I (Published in the Salina Journal on February~ and '1.1. • 2019) RESOLUTION NO. 19-7672 A RESOLUTION PROVIDING FOR THE ISSUANCE OF TEMPORARY NOTES Al~D/OR GENERAL OBLIGATION BONDS OF THE Cl1Y OF SALINA, KANSAS TO FINANCE IMPROVEMENTS TO THE Cl1Y'S SOLID \VASTE FACILITY. \VHEREAS, the City of Salina, Kansas (the "City"). collects and dispenses of solid waste as a municipal function under the laws of the State of Kansas, including K.S.A. 12-2101 ti stq. (the "Act"); and WHEREAS, the governing body of the City hereby finds and determines that it is necessary to make improvements to the City's solid waste facility, including construction of a leachate pond, gravity leachate collection system and manholes, leachate pumping system and municipal solid waste landfill cell, including access roadways, excavation, installation of low permeability soil liners, installing aggregate, and leachate collection/con\1eyance piping, pumping system, and appunenances (the "Project") and that the City has insufficient funds to pay for the entire cost of the Project at the present timei and WHEREAS, the City hereby finds and determines that it is necessary for the City to issue its temporary notes and/or general obligation bonds to pay the cost of the Project. NO\V, THEREFORE, BE IT RESOLVED BY THE GOVER.i~ING BODY OF THE CITY OF SALINA, KANSAS: Section 1. It is hcrcb)' deemed and declared to be necessary for the City to make improvements to the City's solid waste facility as described abo\'e. Section 2. It is necessary for the City to issue its general obligation bonds and/or temporary notes to the pay the cost of the Project in the amount of $2,31 S,000 plus the costs of issuance and interest on any temporary financing under the authority of the Act. Section 3. Before issuing general obligation bonds and/or temporary notes of the City, this Resolution shall be published once each week for two consecutive weeks in the official City ewspapcr. The general obligation bonds and/or temporary notes may be issued unless a petition in position thereto, filed by not less than S% of the electors of the City, is filed with the County lection Officer of Saline County within 30 days following the second publication of this Resolution. f such petition is filed, the governing body of the City shall submit the question of the issuance of · d general obligation bonds and/or temporary notes for the Project to the electors of the City at an lecaion called for such purpose as provided in the Act If no sufficient petition is filed with the unty Election Officer of Saline Comity within the period of time hereinbefore stated, then the oveming body of the City shall proceed with the issuance of general obligation bonds and/or emporary notes of the City for~ ProjecL Section 4. The City expects to make capital expenditures in connection with the Project d intends to reimburse itself for such expenditures with the proceeds of general obligation bonds or temporary notes in an amount not to exceed S2,3 l 5,000, plus associated financing costs and sts of issuance. Any geneml obligation bonds and/or temporary notes issued under the authority of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Regulation § 1.150-2. Section 5. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED by the governing body of the City of Salina. Kansas, on the I 1111 of February, 2019. (Seal) ~.~rl Trent W. Davis, M.D., Mayor ATIEST: . 5;uoudi. liJtm Shandi Wicks, CMC, City Clerk Publisher's Affidavit L Christy Finlc • being duly sworn declare that I am a LepJ Coordinator of TiiE SALINA JOURNAL a daily newspaper published at Salina. Saline County. Kansas. and of general circulation in said county. which ~'Spaper has been admfHed to the maiJs as second class matter in said county. and continuously and uninterruptedly published for five consecutive years prior lo first publkatfon of attached notice, and that the attached Resolution 19-7672 notiet! has been correctly published in the entire issues ot said newspaper ____ tw--..o ..... ____ times. Notary Public Printer's fee SSJ3.00 CERTIFICATE OF NO PROTEST STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas (the "City"), does hereby certify that the governing body of the City duly adopted Resolution No. 19-7672, on February 11, 2019, declaring it necessary to make improvements to the City's solid waste facility at an estimated cost of$2,31S,OOO plus costs of issuance and interest on any temporary fmancing, and to issue general obligation bonds and/or temporary notes, in an amount not to exceed $2,315,000 plus costs of issuance and interest on any temporary financing in order to pay the costs of the improvements and financing costs, all pursuant to K.S.A 12-2101 et seq. (the "Act"). The Clerk docs hereby certify that said Resolution was published once a week for two consecutive weeks (February 15, 2019 and February 22, 2019) in The Salina Journal, the official City newspaper; that more than thirty (30) days have elapsed from the date of the last said publication; and that there has been no sufficient written protest filed in my office against said Resolution, as provided in the Act •.. ~ ~.>~ .·; ~ . WITNESS my band and official seal on ~ \ l ) ~~ Clerk EXCERPTOFMINUTESOFAMEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON JUNE 5, 2017 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit Present: Mayor Kaye J. Crawford (presiding). Commissioners Jon Blanchard. Trent Davis. Melissa Rose Hodges. and Karl Ryan. The Mayor declared that a quorum was present and called the meeting to order • •••••••••••••• (Other Proceedings) Thereupon, there was presented for fll'St reading an Ordinance entitled: AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING AND PROVIDING FOR THE CONSTRUCTION OF CERTAIN IMPROVEMENTS RELATING TO THE SMOKY IDLL RIVER RENEWAL PROJECT IN THE CITY; AND AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO PAY THE COSTS TIIEREOF. Thereupon, Commissioner Ryan moved that said Ordinance be approved on first reading. The motion was seconded by Commissioner Davis. Said Ordinance was duly read and considered, and upon being put, the motion for approval was carried by the vote of the governing body, the vote being as follows: Yea: Mayor Kaye J. Crawford (presiding). Commissioners Jon Blanchard. Trent Davis. Melissa Rose Hodges. and Karl Run. • ••••••••••••• (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CERTIFICATE (Signature page to Excerpt of Minutes) ! i I CITY OF SAUNAr KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 12, 2017 4:00 p.m. The Oty Commission convened at 1:00 for the Expo Center Tour and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. ht Room 107. City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges, and Karl Ryan. Also present: Jason Gage, Oty Manager; Michael Schrage, Deputy City Manager; Greg Bengtson_ City Attorney; and Shandi Wiclcs, Oty Oerk. AWARDS AND PROCLAMATIONS (3.1) The month of June, 2017 as "Elder Abuse Awareness Month• in the city of Salina. Courtney Tl'ain-Domestic Violence Association of Central Kansas (DV .Aaq Community Outreach and Engagement Coordinator, read the proclamation and highlighted activities for the event. (3.2) The day of June 18, 2017 as the "l()()th Anniversary of City Management Day" in the city of Salina. Rachel Hinde, Community Engagement Coordinator, read the proclamation. Mayor Crawford thanked the Oty of Salina management for all of their hard work. CmzENs FORUM None. PuBuc HEARINGS AND ITEMS ScHEDULED R>R A CERTAINDME (5.1) Public hearing and report on Petition No. 4386, {filed by Lewis Erickson, on behalf of Foley Equipment Company), requesting the vacation ol I<DOT acquired right-of- way west of the right-of-way line for North Ohio Street and vacation of the platted restricted access along the south side of the access road abutting Lot 1, Block 1 of the Replat of Foley Addition to the City of Salina, Saline County, Kansas. Dean Andrew, Director of Planning, stated due to the need for further analysis of the affected parties' property interests involved in the vacation request, staff would recommend that the public hearing be continued to the July 10, 2017 meeting. Mayor Crawford opened the public hearing. 17-0156 Moved by Commissioner Ryan_ seconded by Commissioner Davis, to continue the public hearing requesting the vacation of I<DOT acquired right-of-way west of the right-of-way line for North Ohio Street and vacation of the platted restricted access along the south side of the acxess road abutting Lot 1, Block 1 of the Replat of Foley Addition to the City ol Salina, Saline County, Kansas to the July 10, 2017 meeting. Aye: (5). Nay: (0). Motion carried. Page 1 CONSENT AGENDA (6.1) Approve the minutes of June 5, 2017. (6.2) Authorize piping repair in three (3) aeration basins at the Wastewater Treabnent Plant by Walters-Morgan Construction, Inc., Manhattan, Kansas in the amount of $42.450.00. (6.3) Authorize the Mayor to sign the agreement with Charles and Kathleen Elsea, 508 E. Country Club Road, for payment of cost to relocate landscape and related items on the Country Club Road Improvements, Project No. 63143, in the amount of 534,945.30. (6.4) Acceptance of public sidewalk easement dedications on the west side of Fairdale Road adjacent to Meadowlark Ridge Elementary School and on the south side of Pueblo Avenue adjacent to Sunset Elementary School. Commissioner Blanchard requested that Item 6.3 be removed from the consent agenda. 17..0157 Moved by Commissioner Blanchard, seconded by Commissioner Hodges, to approve the consent agenda items 6.1, 6.2 and 6.4. Aye: (5). Nay: (0). Motion carried. (6.3) Authorize the Mayor to sign the agreement with Charles and Kathleen Esea, 508 E. Country Club Road, for payment of cost to relocate landscape and related items on the Country Club Road Improvements, Project No. 63143, in the amount of $34,945.30. Commissioner Blanchard provided hJs thoughts on the past practice of improvements in the right-of-way, asked how projects were typically handled and the bidding process. Dan Stack, City F.ngineer, stated the improvements to relocate the landscape and related items for 508 E. Country Club Road were bid with-the Country Club Road Improvements project but the property owner preferred to have the landscaping company they worked with to perform the work. He continued to state that there could be some savings on the project with the landscape company performing the work. Commissioner Blanchard asked if there was a waiver for improvements within the right-of- way. Mr. Stack stated that the addition of a waiver could be an option that staff could look into. Mayor Crawford asked if the landscape improvements did not meet the owner's wishes, what would happen. Mr. Stack stated the agreement was between the Qty of Salina and the property owner but the Qty of Salina would pay the contractor once the owner was satisfied with the landscape improvements. Commissioner Blanchard. asked if these types of agreements would come to the City Commission in the future. Jason Gage, City Manager, stated the agreement came before the City Commission due to the agreement being with the property owner. He continued to state that the City of Salina typically would return the property back to its original condition after a project was completed. A conversation ensued between the Commission, Mr. Stack and Mr. Gage regarding the neighborly approach to returning property back to its original condition. 17-0158 Moved by Commissioner Blanchard, seconded by Commissioner Davis, to authorize the Mayor to sign the agreement with Charles and Kathleen Elsea, 508 B. Country Oub Road, for payment of Page2 cost to relocate landscape and related items on the Country Oub Road Improvements, Project No. 63143, in the amount of $34,945.30. Aye: (5). Nay: (0). Motion carril!d. ADMINISTRATION (7.1) Second reading Ordinance No. 17-10884 changing the zoning district classification from R (Single-Family Residential) to 1-2 (Ught Industrial) on property addressed as 1123-1127 Van Home. Mayor Crawford no~ that Ordinance No. 17-10884 was passed on first reading on June 5, 2017 and since that time no comments have been received. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to adopt Ordinance No. 17- 10884 on second reading. A roll call vote was taken. Aye: (5) Blanchard. Davis, Hodges, Ryan. Crawford. Nay: (0). Motion carried. (7.2) Second reading Ordinance No. 17-10887 amending the Future Land Use Map (Figure 2.1) of the Salina, Kansas Comprehensive Plan to change the future land use designation of the northwest comer of South Fifth Street and Prescott. Avenue from future Urban Residential to future Hospital-Medical Mayor Crawford noted that Ordinance No. 17-10887 was passed on first reading on June 5, 2017 and since that time no comments have been received. 17-0160 Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Ordinance No. 17- 10887 on second readJng. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. (7.3) Second reading Ordinance No. 17-10885 authorizing and providing for the construction of certain improvements relating to the Smoky Hill River Renewal Project in the city and authorizing the issuance of General Obligation Bonds of the City to pay the costs thereof. Mayor Crawford noted that Ordinance No. 17-10885 was passed on first reading on June 5, 2017 and since that time no comments have been received. · 17-0161 Moved by Commissioner Ryan. seconded by Commissioner Hodges, to adopt Ordinance No. 17- 10885 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Cnawford. Nay: (0), Motion carried. (7.4) Second reading Ordinanc:e No. 17-10888 authorizing and providing for the construction of certain street, waterline, and storm sewer improvements related to the Downtown Streetscape project in the dty; and authorizing the issuance of General Obligation Bonds and Utility System Revenue Bonds of the city to pay the costs thereof. · Mayor Crawford noted that Ordinance No. 17-10888 was passed· on first reading on June 5, 2017 and since that time no comments have been received. 17-0162 Moved by Commissioner Hodges, seconded by Commissioner Ryan, to adopt Ordinance No. 17- 10888 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. Page3 17-0163 (7.5) Resolution No. 17-7460 approving a contract for the design and engineering of the Police Training Center/Range facility. Chief Brad Nelson explained the project. contract, fiscal impact and action options. Commissioner Hodges asked for information on a potential public/private partnership. Jason Gage, Oty Manager, sta~ the new potential facility was still in the planning stages and the facility would not fully meet the requirements for a city training facility. Commissioner Hodges asked if there was a plan on what could be used while the facility was being constructed. Chief Nelson stated both the Kansas Highway Patrol and the United States Army have offered their facilities for use by the Salina Police Department during the construction of the new facility. Moved by Commissioner Davis, seconded by Commissioner Ryan. to adopt Resolution No. 17- 7460 approving a contract with Police Facility Design Group for design and engineering of the Police Training Center/Range facility. Aye: (5). Nay: (0). Motion carried. (7.6) Award the contract for 2017 Bridge Rall Painting, Project No. 70015. Dan Stack, City Engineer, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked for the life expectancy of the bridge and rails. Mr. Stack stated the bridge was six (6) years old and in good shape with good structural hand rails. He continued to state the bridge wouJd be able to last through its twenty (20) year expectancy. Commissioner Hodges asked what the color of the bridge hand rails would be. Mr. Stack stated the hand rails would be painted black. Commissioner Blanchard asked if there was another option to take the project overage from instead of the pavement sealing. Jason Gage, City Manager, stated staff could look into the sales tax fund to c:Over the overage. Commissioner Blanchard asked if a project came in under budget could the remaining project budget amount be kept to use for overages on other projects. Mr. Gage stated staff could take that approach for future projects. 17-0164 Moved by Commissioner Hodges, seconded by Commissioner Blanchard, to award th~ contract for Project No. 70015, 2011 Bridge Painting to Thomas Industrial Coatings of Pevely, MO in the amount of 510,400.00 with a tOS construction contingency ($7,040.00). Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OmER BUSINESS Mayor Crawford thanked the staff and volunteers for their hard work on the Smoky Hill River Festival. Commissioner Blanchard asked for an update on the 5I' AR Bond legislation. Jason Gage, City Manager, stated the Kansas House of Representatives and Kansas Senate approved a tax bW that was vetoed by the Governor but both the Kansas House of Representatives and Kansas Senate were able to come up with enough votes to pass through the tax bill. He Page4 11-0& i I 17-0166 continued to state that the sr AR Bond legislation was approved therefore the City of Salina project would be able to move forward as planned. (9.1) Request for executive session Oegal). Moved by Commissioner Davis, seconded by Commissioner Blanchard, to recess into executive session for 45 minutes to discuss legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and to discuss confidential data relating to the trade secrets of a business entity for the reason that public discussion of the information would competitively disadvantage the business entity and reconvene at 5:45 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:00 p.m. and reconvened at 5:45 p.m. No action was taken. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to extend the current executive session for an additional 65 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:45 p.m. and reconvened at 6:50 p.m. No action was taken. ADJOURNMENT 17-0167 Moved by Commissioner Ryan. seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:50 p.m. (SEAL] Al JEST: ~UJW Shanell Wicks, CMC, Oty Clerk Pages i • I I Summary published in Tht Salina Journal on June _!2_, 2011 pnscd pn thr Qty nCSaUna wd>sitc fiom J1me ·11,, -11 , 2017 ORDJNANCE NO. 17-10885 AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING AND PROVIDING FOR THE CONSTRUCTION OF CERTAJN IMPROVEMENTS RELATING TO THE SMOKY HILL RIVER RENEWAL PROJECT IN THE CITY; AND AUTHORIZING THE ISSUANCE OF GENERAL OBUGATION BONDS OF THE CITY TO PAY THE COSTS THEREOF. \VHEREAS1 K.S,A. 12-63lr(a) ti stq. (the "Act") provides, in part, that whenever the goveming body of any city determines it is necessary to construct stonn ~wers. channels. retention basins or drains for the purpose of managing the storm drainage areas of all or any portion of such city and in the unincorporated areas omside of but within three miles of the corpo11te limits of such cit)•, the go\-eming body may authorize the conslnlCtion of such storm sewers, channels, ~ention basins or drains. such construction shall be authorized by ordinance; such ordinance shall designate where such storm sewers, channels, retention basins or drains shall be located; and WHEREAS, Aniclc 12, § S of the Constihltion of the State of Kansas (the "Home Rule Amendment") and K.S.A. 12-101 empowers cities to detcnnine their local affairs and government and provides that such power and authority granted dlereby to cities shall be liberally construed for the purpose of giving to cities the largest measure of self-government; and WHEREAS, the City of Salina. Kansas (the "City") is a city within the meaning of the Home Ruic Amendment; and WHEREAS, the Project (as defined below) is located within the boundaries of the City, and there is no enactment of lhc Kansas legislablre which authorius the City to issue general obligation bonds to provide funds to finance the ponion of lhe Project unrelated to stonn sewer and drainage improvements, or which· prohibits the City from issuing general obligation bonds to provide funds to finance such portions of the Project; and WHEREAS, in order to provide for the general health. safety and wetruc of the City and its citiuns, the governing body of the Cily has considered the need to construct certain stonn sewer, river, trai~ street and related improvements within 1he City described as follows (the "Project"): ; and The design, construction, improvement, and restoration of approximately 6.8 miles of the Original SmoL.")' Hill River alignment within the City and adjacent property (beginning at the flood control levee-inlet strUCtUrC and ending at lhe flood con1rol levee-outlet suucmre). including any land acquisition necessary therefor, all pursuant to the Smoky Hill River Renewal M~ Plan, including. but not limited to: removal or sediment. dredging, filtration, channel cleaning, restoration of stream flow, installation of a concrete channel and other various in-channel river improvements, the conscruction of a multi-use hiking and biking 1r1i~ sidewalk construction and improvements, replacement of drainage pipes and other storm se\\'CI' and drainage improvements, construction of bridges, various landscaping and aesthetic improvements, and all things necessary and appurtenant thereto WHEREAS, the governing body of the City hen:by filrther finds and dctcnnines that it is ncccssmy and advisable and in the interest of the public health, safety and welfare of the City to authorize the issuance of general obligation bonds of the City to provide ftlnds to finance the Project. ~ i • I NOW, THEREFORE. BE IT ORDAINED BY nm GOVERNING BODY OF THE cm OF SALINA, KANSAS: Section I. Public Benefit. The go\reming body of the City hereby finds and detennines that conslnlction of the Project is in the interest of 1he public health, safety and welfare of the City and its citizens. Sttdon 2. Flnandng Authorization; Reimbursement. The costs of the Project, inrerest on imerim fmancing and associated f1111ncing costs are hm:by authorized to be paid, in whole or in part, from the proceeds of genenl obligation bonds of the City (lhe "Bonds"), which me hereby authorized to be issued for such purposes pursuant to the collective authority of the Home Rule Amendment, K.S.A. 12.10 I and the Act. The 1o1&1 estimated costs of the Project arc $27 ,000,000, plus interest on any temporary financing and costs of issuance. The City expects to make expendilWeS related to the Project prior to the date of issuance of the Bonds, and hereby declares its intent to use proceeds of such Bonds to reimburse expenditures made on or 1fter the date which Is 60 days before the date of this Resolution, pursuant to Trcuury Regulation§ 1.150-2. Section 3. Further Aatborlcy. The officials of the City, the City's attorney, Gilmore .t Bell, P .C., as bond counsel, and other consultants are authorized to proceed with such planning and document preparation as necessary in order to comply with the intent of this ordinance, subject to final approval of such documents by the governing body. Section 4. EITectf\•e Date. This Ordinance shall be effective from and after final p1551ge by the governing body, approval and signarurc by the Mayor and publication once in the official City newspaper by the following summary: Ordinance No. 17-10885 Summary On June 12, 2017, the Goveming Body of the City of Salina, Kansas. adopted Ordinance No. 17·10885, authorizing and providing for c:enain improvements related to the Smoky Hill River Renewal Project and authorizing the issuance of general obligation bonds to pay the costs thereof. The complete text of this ordinance may be obtained or viewed free of charge at the oft"ace of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's oft"teial website address, www.salina-ks.gov, where 1 reproduction of the original ordinance will be available for a minimum of one week following this summary publication. (BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 ~ PASSED b)· the go\'Cming body oflhe City of Salina, Kansas, on June 12, 2017 and APPROVED AND IGNm by the Mayor. ' SEAL) I [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Signarure Page to Ordinance) PUBLICATION SUMMARY OF ORDINANCE NO. 17-10885, PASSED BY THE GOVERNING BODY F THE CITY OF SALINA, KANSAS ON THE 12m DAY OF JUNE, 2017 SUMMARY On June 12, 2017, the GO\'Cl'fting Body of dte City of Salina, Kansas, adopted Ordinance No. 17-108851 uthorizing and providing for the consuuction of cenain improvements relating the Smok)' Hill River Renewal Project in the City. The complete text of this ordinance may be obtained or viewtc:I free of charge at the off"1ee of the City Clerk, 300 West Ash Street, Salina, Kansas. or on the City's official website address, www.salina-ks.gov, whe~ a reproduction of the original ordinance \\111 be available for a minimum of one week following this summary publication. Publish one time and mum one Proof of Publication to the City Clerk and one to the City Attorney Publisher's Affidavit I, _.,_..;QW&1ri.us~t;yufi1;&n111k._ __ • being duly sworn declare that I am a _ _,,1..,cg5'•1.1.I ..._cnnnt1111illlll111Jni.i•t1.11mL...--- ol 11iE SALINA JOURNAL a daily newspaper published al Salina. Saline County, Kansas, and of gencrel circulation in si1id count)•, which neY--spaper has bl-crl admitted to tht' mails as srnmd class matter in said county, and continuously and uninterruptedly .~~~~-'°' five CONeCUtiw years prior to fJnt publication or attached notice. and that the Ordinance 17-10885 Notice has --~-------------------been correct!)• published in the entire issue o! said newspaper Oftl' time, publication being gi\"en in the issue ol Jun~ 15, .m? D,1 i ~lv t2: u. ' Su\M'ribed and swam to bcf ore me. lhis //? )!!:. Prin1cr0s F= iHa b1~· -.. . . . _: ' - ••• :. J •• A.0.2012. • ' .~ t''". - - - CITY OF SAUN~ KANSAS REGULAR MEETING OF mE BOARD OF COMMISSIONERS March 11, 2019 4:00p.m. The City Commission convened at 2:30 p.m. for Land Bank Policy and at 3:45 p.m. for Citizens Forum at Oty-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, Qty-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. Absent Karl Ryan AWARDS AND PROCLAMA.'110NS (3.1) Special Recognition for the Salina Police Department. Mayor Davis read the Award of Valor and presented the Award of Valor plaques to Sergeant Kyle Tonniges, Officer Michael Baker and Officer Kevin Reay. CmZENS FORUM None. PuBUC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIMB None. CONSENT AGENDA (6.1) Approve the minutes of March 4, 2019. 19-0065 Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the consent agenda as presented. Aye: (4). Nay: (0). Motion carried. ADMINISTRA'l10N (7.1) Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Deparbnent and authorizing the issuance of Temporary Notes and/or General Obligation Bonds of the Oty to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked if the project was following the normal sequence of events for the ORT meeting. Michael Schrage, City Manager, stated there had been a ORT meeting for the project but the zoning change had not occurred. He further stated the normal sequence of events had varied for projects in the past and staff was working to create a standard sequence. Page 1 - - - Commissioner Hodges provided her thoughts on the sequence of events for projects. Commissioner Hoppock stated there was another agenda item pertaining to bonding of the items. Mr. Schrage stated that bond counsel was in attendance to discuss other options such as cash fmancing. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to adopt Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Department and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Qty to pay the costs thereof. Aye: (4). Nay: (0). Motion carried. (7.2) Resolution No. 19-7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Oty to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fJScal impact and action options. Commissioner Hoppock asked if there were other projects to be completed under the Parks . Master Plan would there be funds available in the property tax fund. Ms. Pack stated if this project was approved, there would not be additional funds available in this fund but could be in other funds or utilizing cash. Gina Riekhof, Gilmore & Bell, explained the funding options for the project and Owter Ordinance No. 39. Commissioner Hodges asked if the Outrter Ordinance was the home rule power. Ms. Riekhof stated there was a provision in the Kansas Constitution that permitted home rule powers and continued to explain State Statute I<SA 13-1024A and Charter Ordinance No. 39. Commissioner Hodges asked if the Qty of Salina had maxed out the limit on a project in the charter ordinance in the past and continued to fund the project in the next year through the same charter ordinance. Ms. Riekhof stated she was not aware of it occurring in the past but mentioned that Charter Ordinance No. 39 did waive the election requirement. Commissioner Hay asked when the project was actually supposed to start. Scott Garrie, Deputy Director of Parks &c Reaeation, stated the intent was to have the project start after September but had rccaivcd some feedback wanting the construction to start sooner. Mike Hargrave, Golf Course Manager, stated the main lines were scheduled to be dug in late July and early August and begin the laterals by early September. Commissioner Hoppock asked what the major defidendes were and what would happen if nothing was done. Mr. Garrie stated the budget for inigation maintenance was $15,000 yearly and the cost continues to increase on a yearly basis. Mr. Hargrave stated the maintenance of the system continues to take ndditional time of the Dlllinlenance staff. Commissioner Hodges stated that the system had been depleting for at least 10 years. Mr. Hargrave stated at least if not longer. Commissioner Hoppock asked who was performing the cash flow analysis of the property tax fund. Ms. Pack stated there was an amortization schedule attached to agenda item 7.4. MichaeJ Schrag<?, Oty Manager, stated staff had conversations with bond counsel on refinancing the bonds to even out the amortization schedule in the future. Ms. Pack stated she performed the amortization schedule and explained the schedule created. Pagc2 Commissioner Hodges asked for information on the debt service fund. Ms. Pack stated the debt service fund balance at the end of 2018 was $600,000. She continued to provide -information on projects within the debt service fund. - - f "' I Jon Blanchard, 1117 State Street, provided information on Charter Ordinance No. 39, his thoughts on the project and asked the City Commission to look at additional alternatives for financing. Commissioner Hodges asked if the City Commission would like to amend the charter ordinance what that would look like. Mr. Schrage stated it would need to be prepared and brought back for consideration and asked if Ms. Rielchof would explain the amendment requirements. Ms. Riekhof stated staff would need to know what the amendment to the charter ordinance would be. She asked Greg Bengtson, City Attorney, if the ordinance could be approved on two readings on the same date. Greg Bengtson, City Attomey, stated the ordinance would be able to be approved on both readings on the same day with a 2/3 majority vote. Ms. Riekhof further stated the ordinance would require two (2) readings with a 2/3 majority vote and once passed the ordinance would need to be published once a week for two weeks and a 60 day protest period before the charter ordinance would go into effect Mayor Davis asked if bond counsel could review the options for the $500,000 balance. Ms. Riekhof stated lease purchasing. cash financing. phasing the project over multiple years, or resizing the project to fit the $1 million dollar amount A conversation ensued between the City Commission regarding the financing options. Commissioner Hoppock asked if there was a reason Charter Ordinance No. 39 listed $1 million dollars for public parks. Mr. Schrage explained the history of the various charter ordinance adoptions. Mayor Davis provided his thoughts on the current request and Charter Ordinance No. 39. Mr. Bengtson stated the amount was not the crucial amendment to addressing the-policy decision. He further stated the charter ordinance would need to be amended to limit the bonding amount and the overall project cost. He continued to state the charter ordinance limited the bonding of the project not the project amount and Gilmore & Bell would not have offered this financing option if it was not in line with the charter ordinance. Commissioner Hay asked if the charter ordinance was amended what affect would it have on Agenda Item 7.4. Mr. Schrage stated the debt service financing of the irrigation project would not be able to occur until the charter ordinance amendment went into effect. Mr. Schrage stated.if the commission wanted to debt finance $1 million dollars and cash finance the $500,000, conversations would need to occur on the effect an other projects. Commissioner Hodges provided her thoughts on cash financing the remainder of the project. 19-0067 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Aye: (3). Nay: (1) Hodges. Motion carried. (7.3) Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Pagel Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. -Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. - Commissioner Hodges asked what the invesbnent was on the project so far. Jim Kowach, Director of Public Works, stated approximately $50,000. Commissioner Hodges asked about the' scope of the project changing. Mr. Kowach stated staff would like to look at the entire project and thought there was a need for additfonaJ engineering and would Jike to bring the item back for additional scoping. Michael Schrage, City Manager, stated staff asked RDG Planning & Design if the project was paired down would it be able to fit in the $3 million dollar budget. Commissioner Hoppock provided his thoughts on the project and the need for further discussions prior to spending the additional money for design. Mayor Davis asked what the properties would look like beyond the sidewalk. Mr. Schrage stated it was more of a master plan or land use factor and continued to explain what the project would look like if it was phased ouL Lauren Driscoll, Director of Community & Development Services, staled the improvements recommended in the plan would fall within the Comprehensive Plan. Mayor Davis provided his thoughts to the uses of some of the properties and the driveway entrances. A conversation ensued between the City Commission, Ms. Driscoll and Mr. Schrage regarding the project plan. Commissioner Hodges provided her thoughts on the project and eliminating the budget for brick street maintenance. Mr. Schraga stated this project had been the topic of conversation for years and if the Governing Body had a concern for the design expense, staff could break up the design of the project Commissioner Hodges stated she would like the project to be part of the Strategic Planning session coming up in April. Commissioner Hay asked if they could look at option 2. Mr. Schrage stated the item could be postponed or could be brought back at a later date. Mr. I<owach stated the project area was close to needing a pavement overlay but there was need of additional investigation of whether the project would need to be completely rebuilt or just a pavement overlay and the investigation would cost approximately $50,000. 19-0068 Moved by Commissioner Hodges, seconded by Commissioner Hay, to postpone consideration of Resolution No. 19-'76'76 authorizing and providing for iinprovements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Oty to pay the costs thereof with any additional information supplfod by staff to Monday, May 6, 2019. Aye: (4). Nay: (0). Motion carried. _The City mmission recessed at 5:45 p.m. for a 5 minute break. The meeting resumed at 5:50 p.m. (7.4) General Obligation Bonds and Temporary Notes. Pagc4 - (7.4a) Resolution No. 19-7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.4b) First reading Ordinance No. 19-10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Commissioner Hodges appreciated the extra time and additional information provided by staff and thanked Ms. Riekhof for coming today and preparing a memo regarding the state statutes. Michael Schrage, City Manager, stated one of the items financed was the Pheasant Ridge Addition project and staff chose to put the financing mechanism first then the action for the contra cl Jon Blanchard, 1117 State Street, provided his thoughts on the bonding of the downtown streetscape project especially the overhead sbuctures, provided information on the main traffic way act and asked if the legislature intended for overhead structures, benches, trash receptacles and plazas to be part of the main traffic way act. He asked if we were funding part of the downtown strcetscape project with sr AR Bond money. Mr. Schrage stated the accounting demonstrated how the ST AR Bond money would be used. A conversation ensued between Mr. Blanchard, Ms. Pack and Mr. Schrage regarding the financing of the Downtown Streetscapc projccl Mr. Schrage read a portion of the language included in the staff report from January 17, 2017 pertaining to the scope of the Downtown Streetscape projecl -19-0069 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No.19- 7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. Aye: (3). Nay: (1) Hodges. Motion carried. - 19-0070 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to pass Ordinance No. 19- 10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A on first reading. Aye: (3). Nay: (1) Hodges. Motion carried. (7.5) Award contract for Pheasant Ridge Addition No. 3, Phase IL Project No. 80025. Jim Kowach, Director of Public Works, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked if there was an overage, would the City be responsi'ble for il Mr. Kowach stated if there were changes or modifications to the plan, it would be the responsibility of the City. Mayor Davis asked if there were modifications would staff meet with the contractor to discuss. Mr. Kowach stated yes. Joan Ratzlaff, Salina, asked what the prices would be for the houses and lots in the subdivision. Todd Welsh, 221 S. Morris Drive, stated the homes would be in the $225,000 to $325,000 range and the lot price& would remain at $35,000 each. He provided information on the project bids and asked the contingency amount to be returned to the developer instead of to reduce the special assessments. Ms. Ratzlaff provided her thoughts on the Broadway Boulevard Improvements and the PagcS need for affordable housing. -Wayne Nelson, Civil Engineer II, stated the construction contingency allowed for change orders to occur in the field, up to the approved amount and if there was remaining contingency the project final cost would come under the approved amount and the special - - f IU assessments would be reduced based on the project final cost. Michael Schrage, Oty Manager, asked in the event the project comes in without using the contingency would the developer's expenses be eligible for reimbursement. Gina Riekhof, Gilmore & Bell, stated a portion of the money paid upfront by Mr. Welsh could be returned if it remained unused. Mr. Schrage stated it was posSt1'le the remaining amount could be returned to Mr. Welsh but that would have to be determined at the end of the project. A conversation ensued between the Oty Commissi~ Mr. Schrage, Mr. Kowach and Mr. Welsh regarding the ability to refund any remaining construction contingency to the developer. 19-0071 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to award contract for the Pheasant Ridge Addition No. 3, Phase Il, Project No. 80025 to APAC-I<ansas in the amount of $509,233.15 with a 5% construction contingency of $25,461.66 for a total of $534,694.81. Aye: (3). Nay: (1) Hodges. Motion carried. (7.6) Acceptance transfer of ownership of the Former Schilling Air Force Base Treatment Plant property (Water Well Road &: Ohio Street), five water well sites and water tra1'\Smission lines. Martha Tasker, Director of Utilities, explained the acceptance, the project and action options. Mayor Davis asked if there was a specific change in the motion. Ms. Tasker stated the language should state the Former Schilling Air Force Base Water Treatment Plant Property. Greg Bengtson, Oty Attorney, stated Tract 108 and 111 were owned by fee title by the Salina Airport Authority and would be owned by lee title by the Oty of Salina. He continued to state the remaining properties were considered as easements and would be assigned over to the Oty of Salina. He further stated that staff would be able to include additional information on the document for those easements due to information that was obtained by John Harvey, the City Surveyor. Mr. Bengtson explained the specific sections of the Kansas Umited Warranty Deed. 19-0072 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to accept transfer of ownership of the Former Schilling Air Force Base Water Treatment Plant Property, Tract 108 and 111. Aye: (4). Nay: (0). Motion carried. (7.7) Approve Change Order No. 1 for the Brick Crosswalks, Project No. 80012C. Jim Kowach, Director of Public Works, explained the project, change order, fiscal impact and action options. Conunissioner Hodges asked if we were taking Brick Street Rehabilitation off the table. Mr. Kowach stated no, staff was going to pool money from other projects for a significant slormwater repair at the comer of Mulberry & Fifth Street. · Pagc6 - - - 19-CQ3 ! i I 19..0074 Michacl Schrage, City Manager, stated with the brickwork and the stormwater project at Mulberry and Fifth Street, there would be significant changes to the area. Mr. Kowach stated yes, thal was correct. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to approve Change Order No. 1 authorizing $4,529.10 (Option 2 bid amount minus previous authorization} plus a $2,970.90 (12.1 % of entire project} construction contingency for City Project No. 80012C Brick Crosswalks. Aye: (4). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1} Application No. Z19-1, (filed by Joe Hill on behalf of the Joe Hill Trust), requesting a change in .zoning district classification from I-2 (Light Industrial) to R-2 (Multi- Family Residential) to allow construction of two new residential dwellings at the southwest comer of Reynolds Street and Lincoln Avenue. (8.la) First reading Ordinance No. 19-10996. Dean Andrew, Director of Planning, explained the request, Planning Commission recommendation and action options. Commissioner Hoppock asked if Mr. Hill owns the south part of the mobile home park but was just leaving it vacant. Mr. Andrew stated yes. · Barb Young, 1100 West Grand, wanted to commend Joe Hill for his request for infill and wanted the item to be considered a positive move forward. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to pass Ordinance No. 19-10996 changing the zoning district classification from I-2 (Ught Industrial) to R-2 (Multi-Family Residential} to allow construction of two new residential dwellings at the southwest comer of Reynolds Street and Lincoln Avenue on first reading. Aye: (4). Nay: (0). Motion carried. (8.2) First reading Ordinance No. 19-10995 requesting annexation of the South Water Treatment Plant site located at lhe squtheast comer of South Ohio Street and East Water Well Road. Dean Andrew, Director of Planning, explained the request, stated due to the property not being contiguous with the city limits, the property could only be annexed in with the consent of the Saline County Commission which would require an additional action to approve a resolution that staff has distnbuted to the commission, and the ordinance. Mr. Andrew asked legal counsel if the motion for the ordinance should be made first. Greg Bengtson, City Attorney, stated yes. He also stated the Kansas Limited Warranty Deed was in hand for signature. Commissioner Hodges asked if staff had approached county staff regardirig the annexation and if they were in approval of the annexation. Mr. Andrew stated staff would work with the County Administration to take this item to the Saline County Commission. Mr. Bengtson stated it would depend if the county would hold fee interest of the road fn question and stated if the road annexation and impact fee agreement remained active, the county would not require annexation of the road. Mr. Andrew stated the County Counselor was aware of the request and he would be working with the Saline County Planning Department tomorrow to discuss the request. Jon Blanchard, 1117 State Street, stated the population information would be available soon Page7 - and there needed to be a conversation on the potential increases in water bills in the future. Commissioner Hodges stated there was no fiscal impact of the item today and would complete getting the property under our control. - - 19-0077 Moved by Commissioner Hodges, seconded by Commissioner Hay, to pass Ordinance No. 19- 10995 requesting annexation of the South Water Treatment Plant site located at the southeast comer of South Ohio Street and East Water Well Road on first reading. Aye: (4). Nay: (0). Motion . carried. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to adopt Resolution No. 19-7688 requesting the Board of Saline County Commissioners to determine the advisability of the annexation of a tract of land into the City of Salina, Kansas and give its consent to such annexation. Aye: (4). Nay: (0). Motion carried. OTHER BUSINESS (9.1) Request for executive session (legal). I move the city commission recess into executive session for _ minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to K.S.A. 45-7319(b)(2). The open meeting will resume in this room at_ p.m. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to recess into executive session for 30 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the ·need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to KS.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 5 minute break at 7:30 p.m. and recessed into executive session at 7:35 p.m. and reconvened at 8:05 p.m. No action was taken. 19-0078 Moved by Commissioner .Hodges, seconded by Commissioner Hoppock, to recess into executive session for 10 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:16 p.m. Aye: (5). Nay: (0). Motion carried. 19-0079 The City Commission recessed into executive session at 8:06 p.m. and reconvened at 8:16 p.m. No action was taken. ADJOURNMENT Moved by Commissioner Hay, seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:16 p.m. Page8 - - - [SEAL] A'ITFST: • ~~ Shandi Wicks, CMC, City Ocrk Trent W. Davis, M.D., Mayor Page9 RESOLUTION NO. 19-7679 A RESOLUTION AUTHORIZING AND PROVIDING FOR THE DESIGN, CONSTRUCTION AND IMPROVEMENT OF A PUBLIC BUILDING IN THE Cl1Y OF SALINA, KANSAS AND PROVIDING FOR THE PA VMENT OF 111E COSTS THEREOF. WHEREAS, the City of Salina (the "City") is authorized and empowered pursuant to K.S.A 12- 1736 ti stq. (the "Act") to em:t or construct, acquire a public building or buildings and procure any neeess&I}' site therefore and may alter, repair, reconstruct, remodel, replace or make additions to, ftlmish and equip a public building or buildings; and WHEREAS, the City is authorized and empowered pursuant to the Act to issue general obligation bonds for the purpose of financing the costs associated with the foregoing; and WHEREAS, the governing body of the City hereby finds and detennines that it is necessary to authorize and provide for the construction and improvement of cenain public buildings in the City, as more fully described herein, and to provide for the payment of the costs thereof. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Project Authori7.atlon. The governing body of the City hereby finds and detennines that it is necessary to make the following improvements: lmprovmients to parking facilities at and adjaceni to the Police Dcpanmcnt headquaners. including the design, construction and improvement of a new surface parking lot located at the nonhwest comer of Elm and Io• Street, including improving any adjacent surface parking or property, and all other necessary improvements and equipment related thereto (the "Improvements"). Section 2. Project Fiaandng. The estimated cost of the Improvements is $400,000. The cost of the Improvements and the associated fmancing costs shall be payable from the proceeds of genera) obligation bonds and/or temporary notes of the City issued under the authority of the Act. Section 3. Relmbunement. The City expects to make capital expenditures in connection with the Improvements and intends to reimburse itself for such expenditures with the proceeds of general obligation bonds and/or temporary notes in "an amount not to exceed $400,000, plus associated fmancing cosrs and costs of issuance. An)' general obligation bonds and/or temporary notes issued under the authority of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Regulation §1.150-2. Section 4. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED by the go\'eming body of the City of Salina, Kansas, on March 11, 2019. (SEAL) -i I ATI'EST: • 2klHfii. 11 JtW Shandi \Vicks, CMC, City Clerk 2 I CITY OF SAUNA, KANSAS, REGULAR MEETING OF THE BOARD OF COMMISSIONERS February 1, 2016 4:00p.m. The City COmmission convened at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of ~egiance and a moment of silence. · Those present and comprising a quorum: Mayor Jon R. Blanchard (presiding), Commissioners Kaye Crawford, Trent Davis, Randall Hardy, and Karl Ryan. Also present Jason Gage, City Manager; Michael Schrage, Deputy City. Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Cerk. AWARDS AND PRE>CLAMATIONS (3.1) The month ot'February, 2016 as "Black History Month'' in the city of Salina. Gregory Gibson read the procl~tion. CmZENFORUM None. PuBUC HEARINGS AND ITEMS SOIEDULED FOR A CERTAIN nMB None. CONSENT AGENDA (6.1) Approve the minutes of January 25, 2016. (6.2) .Approve Resolutibn No. 16-7316 amending Section 5.c. of Resolution No. 12-6875 regarding terms of appointment for youth liaisons. (6.3) Authorize the City Manager to approve the purchase of a used vehicle for the fire department in the amount of $20,789. 16-0033 Moved by Commissioner Hardy, seconded by Commissioner Ryan, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Consider the authorization of donated funds for 2 acres of unused land at East· Crawford Reaeation Area for the construction of a public dog park. Vanessa Cowie, Animal Services Manager, explained the process, public outreach campaign, results, Parks & Reaeation Advisory Board input, construction estimates and recommended action. Commissioner Davis asked if there were any plans to put a public restroom in the park. Ms. Cowie stated the initial construction did not include the construction of a public restroom. Commissioner Davis asked if there would be running water accessible for the park. Ms. Cowie stated there would be rwming water available and the water bowls would be heated Page 1 in the winter. Commissioner Crawford asked if there were complaints received for the Indian Rock Park location. Ms. Cowie stated written complaints were received for both Indian Rock Park and Lakewood Park. · A conversation ensued between Mayor Blanchard and Ms. Cowie regarding the park location. Mayor Blanchard asked how the park would be funded on a yearly basis and how the use of the park would be measured. Ms. Cowie stated the cost for running the park would come out of the Animal Shelter operating budget and staff could install a data tracker to help determine the usage of the park. Mayor Blanchard asked how long the fencing around the park would last. Ms. Cowie stated a poly coated chain link fence would be installed and the fence would last longer than a regular chain link fence. Jason Gage, Oty Manager, asked if the donated funds could be used to replace the fence in the future. Ms. Cowie stated the funds were unrestricted and could be used for anything. Abner Perney, 101 Overhill Road, stated he would like to propose three alternative locations at East Crawford Reaeation Area and he did not like that the location would impinge on the car activities that have been located there for over forty (40) years. Mayor Blanchard stated the car show was brought up during the study session and it could be worked around. Norman Manne!, 7532 W. Pleasant Hill Road, stated he was concerned about the cleanup of the park and the health of the animals going to the location. Ms. Cowie stated the car events were considered when the location was 'chosen, the park would be closed for maintenance a couple times a year for sanitizing, fertilizing and cleaning. Mr. Gage asked if the location of the park could be adjusted if need be to accommodate the car shows. Ms. Cowie stated the location could be adjusted to work with the car shows. 16-0034 Moved by Commissioner Davis, seconded by Commissioner Crawford, to authorize the use of up to $80,000 in donated funds and 2 acres of unused land at East Crawford R~ation ~ea for the construction of a public dog park. Aye: (5). Nay: (0). Motion carried. (7.2) Select a real estate firm to assist city staff in selling the vacant building parcel located at 2626 Quail Hollow Drive. Gary Hobbie, Director of Development Services, explained the history of the property and selection criteria. Commissioner Davis asked if there was a list of criteria to select the firms. Mr. Hobbie stated the list provided included all real estate brokerage firms located in Salina. Mayor Blanchard asked if there was a specific firm that sold vacant lots more than a home. Mr. Hobbie stated he was not aware of a specific .firm. Commissioner Crawford asked if they could choose a first choice and an alternate choice. Mayor Blanchard picked Advantage (aka:ReMax Advantage) for the first choice. Page2 16.0035 Commissioner Crawford picked an alternative to be All American Realty. Moved by Commissioner Crawford, seconded by Commissioner Davis, to select Advantage (aka:ReMax Advantage) as the .first choice and All American Realty as the second choice as the real estate brokerage firm to handle the sale of a vacant parcel of land located at 2626 Quail Hollow Drive. Aye: (5). Nay: (0). Motion carried. (7.3) First reading Charter Ordinance No. 39 a charter ordinance exempting the City of Salina, Kansas from the provisions of KS.A. 13-1024a and providing substitute and additional provisions on the same subject relating to general improvements and the issuance of bonds for the purpose of paying for said improvements; and repealing Charter Ordinance Number 38. Jason Gage, City Manager, explained the changes, field house design work and cost estimation. Conunissioner Hardy asked if the final design option of the field house would affect the decision today. Mr. Gage stated the decision today would not affect the final design. Commissioner Hardy asked if the time&ame would allow for the alternate design option to be considered. Mr. Gage stated stall had the question in to the designer and are currently waiting on the answer Conunissioner Davis stated he would like to get the number right this time so the number would not have to be increased in the future. Mr. Gage stated he felt the number was high but he wanted to put a larger number to keep from coming back in the future. Commissioner Davis asked what the probability was for the ST AR Bonds to be used for the project. Mr. Gage stated the basic primary needs would be able to be funded by ST AR Bonds. Commissioner Hardy stated he was hoping the private-public partnership could continue to be a 50/50 partnership. Mr. Gage stated the commission had been very clear the funding would be a 50/50 partnership. Mayor Blanchard stated he was very supportive of the field house. Guy Walker, Salina 2020, Inc., thanked the Commission for considering the item and staff for all of their work on the project so far. Dave Miller, 133 East Lake Drive, stated some of the cost estimates bothered him. Mr. Gage stated the project was brought by the private sector and the preliminary work that was done brought the estimate of $9 million dollars but did state the demand for construction work was driving up the costs. Commissioner Davis asked when the design would be finalized. Mr. Gage stated the guaranteed maximum price would be ready in late March to early April. Commissioner Davis asked if there was a requirement for the final design to come before the board. Mr. Gage stated the design would come before the commission for approval. Judy Larson, 2801 Ray Avenue, encouraged the city to communicate to the community and stated there were a lot of people that were skeptical of the project. Brian Richardson, 519 S. Santa Fe, stated he had the 3 bids received in 2013 for the construction of the field house and stated there were increases in the construction industry Pagel all over the country. Mayor Blanchard asked if there was any feeling there would be a need for additional money. Mr. Richardson stated if you look at design today and design 3 years ago things have changed. Commissioner Davis asked who was going to decide on the exterior fa~ade and when. Mr. Gage stated the input of the private partner and the commission would both be in on the decision and estimated the plan to coine before the Commission in a couple of weeks. · Don Boos, 2532 Angus Lane, stated there had been an increase of tourism and there was a ~eed for the field house to begin constructi0n on time in order for the other downtown businesses to develop. Commissioner Crawford stated she was in favor of the field house but did not think we needed the Taj Mahal. Mayor Blanchard thanked everyone for the work and provided his thoughts on the project. Commissioner Hardy asked if there was an end to the ordinance. Mr. Gage stated a surety. of the project estimates and alternates would happen and he did not think the project would be that high. 16-0036 Moved by Commissioner Ryan, seconded by Commissioner Crawford, to pass Charter Ordinance No. 39 on first reading. Aye: (4). Nay: (1) Blanchard. Motion carried. DEVELOPMENT BUSINESS (8.1) First reading Ordinance No. 16-10819 amending Section 2-2f1/ through 2-212 of the Salina Business Improvement District Design Review Board ordinance. Dean Andrew, Director of Planning, explained the guidelines, proposed ordinance amendments, board recommendation and action alternatives. Commissioner Davis asked if the Lee District Board of Advisors had authority to change the Design Review Board recommended amendments. Mr. Andrew stateti the Lee District Board of Advisors would provide input on how the board was working or an opinion on the changes. Commissioner Hardy asked how many certificates of compatibility were approved last year. Mr. Andrew stated there were 12 certificates approved. Commissioner Hardy asked how long it took to approve a certificate of compatibility and if staff felt a fee should be charged for the service. Mr. Andrew stated it took the same ~ount of time to approve a certificate of compab'bility as it did "for a conditional use permit. He stated a fee was charged for a conditional use permit and felt the fee should be modest, to help off-set the service provided. Mayor Blanchard asked if the amendments would help allow more items to be approved administratively instead of requiring them to go to the board. Mr. Andrew stated the amendments would allow a larger amount of applications to be handled administratively. Mayor Blanchard asked if now was a good time to make the changes and asked if there. were several applications filed. Mr. Andrew stated there was currently 1 application on file. ::::t6-0037 Moved by Commissioner Davis, seconded by Commissioner Hardy, to pass Ordinance No. 16- 10819 amending Section 2-207 of the Salina Business Improvement District Design Review Board ordinance, repealing the existing Section 2-207 on first reading. Aye: (5). Nay: (0). Motion carried. Page4 16-0038 Moved by Commissioner Davis, seconded by Commissioner Har4y, to declare a compelling public purpose exists for second reading approval of Ordinance No. 16-10819 on the same day as the first reading. Moved by Commissioner Davis, seconded by Commissioner Hardy, to adopt Ordinance No. 16- 10819 amending Section 2-207 of the Salina Business Improvement District Design Review Board ordinance, repealing the existing Section 2-207 on second reading. A roll call vote was taken. Aye: (5) Crawford, Davis, Hardy, Ryan, Blanchard. Nay: (0). Motion carried. OTHER BUSINESS (9.1) Request for executive session (legal/personnel). 16-0040 Moved by Commissioner Ryan, seconded by Commissioner Hardy, to recess into executive session for 65 minutes to discuss with legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and for the purpose of discussing matters pertaining to non-elected City personnel for the reason that public discussion of the matter would violate the privacy rights of the non-elected personnel involved; and reconvene at 7:00 p.m. The City Commission recessed into executive session at 5:55 p.m. and reconvened at 7:00 p.m. No action was taken. 16-0041 Moved by Commissioner Hardy, seconded by Commissioner Crawford, to extend the current executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 7:00 p.m. and reconvened at 7:30 p.m. No action was taken. 16-0042 Moved by Commissioner Davis, seconded by Commissioner Hardy, to extend the current executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 7:30 p.m. and reconvened at 8:00 p.m. No action was taken. 16-0043 Moved by Commissioner Davis, seconded by Commissioner Ryan, to extend the current executive session for an additional 1 hour and 20 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 8:00 p.m. and reconvened at 9:20 p.m. No action was taken. ADJOURNMENT 16-0044 Moved by Commissioner Davis, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 9:20 p.m. [SEAL] A1TEST: ~·Mayor Pages ~IU.Qa Shandi Wicks, CMC, Qty Oerk Page6 CITY OF SALINA, KANSAS SPECIAL MEETING OFTIIE BOARD OF COMMISSIONERS February 16, 2016 8:30a.m. The Special Meeting of the Board of Commissioners was called to order at 8:30 a.m. in Room 107, City-County Building. Roll call was taken followed by th!! Pledge of Allegiance and a momen~ of silence. Those present and coinprising a quorum: Mayor Jon R. Blanchard (presiding), Commissioners, Kaye J. Crawford, Trent Davis, Randall R. Hardy and Karl Ryan. A:Jso present Jason A. Gage, City Manager; Michael D. Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Oerk. ADMINISTRATION (3.1) Second reading Charter Ordinance No. 39 a charter ordinance exempting the City of Salina, Kansas from the provisions of I<.S.A. 13-1024a and providing substitute and additional provisions on the same subject relating to general improvements and the issuance of bonds for the purpose of paying for said improvements; and repealing Charter Ordinance Number38. Jason Gage, City Manager, stated John Frew, FREW Development, would introduce a project theme and a presentation for the field house project. John Frew, FREW Development, stated the company was the owner's representative for the Qty of Salina and continued to provide information on the various projects Frew Development has built in various dties aaoss the United States. Mr. Frew provided a brief overview of the project scope. Kerry Newman, SFS Architecture, provided a presentation on the options of the layout for the project. Jolm Frew, FREW Development and Chris Stanton, McCown Gordon Constru~on, explained the budget for the layout options. Mayor Blanchard asked if the time to convert the court surface for the two (2) options were comparable. Mr. Gage stated the conversion time would vary depending on the layout and court types. Mayor Blanchard requested a 5 minute break at 9:20 a.m. The meeting reconvened at 9:25 a.m. Mayor Blanchard asked for the commissioners' thoughts on the design direction and project funding. A conversation ensued between the Coinmission and Mr. Gage regarding the layout and the budget. Commissioner Hardy asked who was involved in the initial design. Mr. Gage stated Parks and Recreation staff, SFS Architecture, FREW Development and McCown Gordon Construction. Mayor Blanchard asked if the commissioners were all in favor of the 3 x 3 B option. Commissionei: Davis asked if the two (2) plastic courts would have turf on them unless they are needed for basketball. Mr. Gage stated there would be four (4) hardwood courts Page 1 and two (2) synthetic courts with the ability to install the turf over the top of the synthetic courts. Commissioner Davis asked if there was a separation between the courts and asked how much time it would take to convert the court to turf. Mr. Gage stated there would be a curtain separating each of the courts and utilizing 4 to 5 people the court could be converted in a couple hours. Mayor Blanchard asked who the members of the private group were. Mr. Gage stated Brian Richardson was a good part of the group and there were 10 to 80 private stakeholders. Mayor Blanchard stated if there was a gap, it would be helpful to determine the private group in order to have an agreement in the future. Commissioner Ryan asked how much longer it would take to develop the budget. Mr. Newman stated it would take an additional 4 weeks. Commissioner Davis asked if the purchase of the property and the fire lane were included in the 12.5 million dollar project Mr. Newman stated the property acquisition and the fire lane were included in the project total. Mayor Blanchard asked if the outside of the building would look similar to the Assurance Partners building. Mr. Newman stated the outside of the building had been approved by the Design Review Board and had stone on the lower portion of the building with a metal design on the upper portion of the building. Commissioner Hardy asked about the lighting for the building. Mr. Newman stated there would be natural lighting with panels to reduce the glare of the natural light. Commissioner Davis asked if there was a solid wall between the lobby and the courts. Mr. Newman stated the wall was a combination of both wall and glass. Commissioner Crawford asked why there was a need for 3 courts on the north and why there was a need for the turf. Mr. Gage stated the idea for the turf was a practice space for soccer, baseball and softball. Mayor Blanchard asked about the meu.anine and the enhanced option. Mr. Gage stated he felt the mezzanine should be eliminated and stated there would need to be a closer look at the storage of the materials. Commissioner Crawford stated she was in favor of the larger lobby. Mr. Gage stated there was not a perfect formula to determine the number of people that would be inside the lobby at any given time but felt the expanded lobby would be a benefit. Mayor Blanchard stated the next step was the cost reduction and value engineering. Mr. Gage stated there were a lot of small things that need to be evaluated. Mayor Bhmchard stated the project was currently at 12.5 million. Mr. Gage stated yes with conting-;ndes and there could be a consideration of a competitive bid process. Mayor Blanchard asked if the contract with McCown Gordon Construction would determine the guaranteed maximum price. Mr. Gage stated yes but if the commission would like to consider the competitive bid process, the decision would need to be made today. Mayor Blanchard asked if there was a recommendation from staff and the construction manager at risk to go with the competitive bid process versus the guaranteed maximum Page2 price and if the specifications would be the same for either process. Mr. Gage stated the specifications would be the same for both processes. Todd Knight, McCown Gordon Construction, stated Mc.<:own Gordon Construction was part of an interview process for the competitive process of the construction manager at risk process. Mr. Knight stated the project would be competitively bid and there would be the ability to reduce the cost by the 50 cost reduction options. Mr. Knight stated McCown Gordon Construction had obtained budget numbers from approximately 20 sub-contractors to help determine the budget for the layout options. Mr. Knight provided information on the differences on the bidding processes. Commissioner Davis asked if the construction manager at risk would acquire any of the cost savings. Mr. Knight stated the savings would go to the Oty. Commissioner Hardy asked if McCown Gordon Construction worked directly with FREW Development on tlie bid process. Mr. Knight stated FREW Development would be at the bid opening of all of the sub-contractors for the project. Mr. Frew stated FREW Development would not have a role in determining the sub-contractors. Commissioner Davis asked if there was a preference in local contractors. Mr. Knight stated the decision for hiring local contractors would be up to city staff and the Commission. He continued to state the sub-contractors would be determined by the cost they submitted and the types of work they have done in the past Mr. Gage stated to determine the most competitive process, the use of the competitive bid process would be best Mayor Blanchard asked if a formal motion would need to be made on the use of the competitive bid process. Mr. Gage stated a consensus on the use of the competitive bid process would be needed today and staff would bring back a formal request at the next meeting. The Commission determined in a consensus to use the competitive bid process. Mr. Gage stated staff would bring back a formal request at the next meeting. Mr. Gage stated the charter ordinance .does not in any way determine the budget of the project; staff was trying to avoid encumbering the general fund by allowing the charter ordinance to cover the gap. Mr. Gage also stated information on the availability for the New Market Tax Credits and the STAR Bond District would probably be available at the time of the approval of the project. Commissioner Davis asked if the gap would need to be funded by the private donors and the Cty of Salina, what type of agreement would need to be developed for the private donors. Mr. Gage stated there would not be a formal agreement for the private donors, and he did not think it was unreasonable to request the private donors to provide additional funding. Commissioner Ryan stated he did not think the private donors would need to be asked to provide additional funding. Commissioner Ryan asked where the charter ordinance amount would need to be if the project was at the budget amount today. Mr. Gage stated $8 million. Mayor Blanchard called for a 5 minute recess at 10:24 a.m. The meeting reconvened at 10-.30 a.m. Jim Vint, 1115 Andrew Avenue, provided his thoughts on the field house and urged the Commission to vote no on the second reading of the ordinance. Norman Manne], 7532 W. Pleasant Hill Road, stated the private funding money needed to Page3 be acquired first Mr. Gage stated there was commibnent for the private funding. Pat Beatty, 14 Crestview, provided his thoughts on the competitive bid process, New. Market Tax Credits and urged the Commission to move to the next step. Ray Hruska, 235 N. Santa Fe, stated there was concern about the donor list. He asked Brian Richardson to provide the donor list and stated the list should be subject to open public records. Mr. Hruska provided his thoughts on the project and the funding. Mayor Blanchard asked if the donor list was available. Mr. Gage stated he did not know if a · fist was available but reiterated that he stated there were 70 or so stakeholders. Judy Larson, 2801 Ray Avenue, stated she was asked to ask how many cars could be parked at the location. Mr. Gage stated depending on the option chosen, there could be anywhere &om 20 to appro~tely 70 spaces and Assurance Partners has offered their parking lot through an agreement for use for the facility along with additional parking in approximately a block radius. Mayor Blanchard asked how many parking spaces would be needed. Michael Schrage, Deputy City Manager, stated there was not a requirement for parking in the C-4 District Mr. Gage stated staff felt there was an ability to distribute the cars in a close proximity of the field house. Brian Richardson, 519 S. Santa Fe, thanked the developing team for their time yester~y and felt the stakeholders were in favor of the option chosen today. Mayor Blanchard asked Mr. Richardson if there was a willingness of the stakeholders to provide additional funding. Mr. Richardson stated once the gap was determined, he could take the request to the stakeholde~. Commissioner Davis asked if the commission would like to change to a lower amount, could it be approved on second reading today. Greg Bengtson, Qty Attorney, stated if the amount was equal or a lesser amount, it could be approved on second reading today. Commissioner Ryan stated he would be in favor of approving the ordinance on second reading at $7.5 million. Mr. Bengtson stated the main motion of the second reading should include the section and number for the amount. A conversation ensued between Mayor Blanchard and Mr. Gage regarding the funding of the project and the gap. • Mayor Blanchard asked for a status on the SfAR Bond District. Mr. Gage stated the SfAR Bond District for Salina would be allowed as long as the budget bill was passed by both chambers and the governor signed the bill. He continued to explain the current issues regarding the ST AR Bond Districts and the Kansas Legislature. Monte Shadwick, Saline County Commission Chair, announced the County Commission would have their formal meeting at 11:00 a.m. in the City-County Building, Room 209. Commissioner Davis asked for a status on the New Market Tax Credits. Mr. Schrage stated staff, upon request, provided additional information and would know more in a couple weeks. Mayor Blanchard asked how much money could come out of the New Market Tax Credits. Mr. Schrage stated the top end would be in the $2 million dollar range and if the budget Page4 would remain at $12 million, there would still be a $1 million dollar gap. Commissioner Davis asked if there was a way to prioritize the primary use of the Sf AR Bond District for the field house. Mr. Gage stated there was flexibility and it would fall to the Commission for administration of the plan. Mayor Blanchard asked if the utility relocation could be recouped through the STAR Bond District. Mr. Gage stated it would be an eligible cost but would be part of the final priorities of the plan. Mayor Blanchard provided. his thoughts on the project and stated there was a need for clear leadership for a private partnership to help fund the gap. Mayor Blanchard asked for a status on the downtown development. Mr. Gage stated there would be development agreements attached to the various downtown developments. Trace Walker, 1608 Reece Road, Brookville, Kansas, stated with the action by the Kansas Legislature, it was important to submit the plan to the Kansas Department of Commerce for the STAR Bond District and the legal fees up to today were paid by Salina 2020, Inc. Mr. Walker stated the field house was a big piece of the STAR Bond District and we would not know an answer if it was accepted until the plan was submitted. Mayor Blanchard asked when the application would be submitted for the ST AR Bond District. Mr. Gage stated the application was ready to be submitted and an answer would hopefully be received soon. 16-0055 Moved by Commissioner Ryan, seconded by Commissioner Davis, to approve second reading Charter Ordinance No. 39 a charter ordinance exempting the Oty of Salina, Kansas from the provisions of I<.S.A. 13-1024a and providing substitute and additional provisions on the same subject relating to general improvements and the issuance of bonds for the purpose of paying for said improvements; and repealing Charter Ordinance Number 38, and amending Section 2 (4) a maximum of $7,500,000 under project category H. Commissioner Hardy stated he was not comfortable with the $7.5 million but would consider $7 million and would like to amend the motion. 16-0056 Moved by Commissioner Hardy, seconded by Commissioner Davis, to amend the motion to reflect a reduction of the amount of $9,500,000 to $7,000,000. Aye: (5). Nay: (0). Motion carried. Mayor Blanchard restated the motion to approve second reading Charter Ordinance No. 39 a charter ordinance exempting the Qty of Salina, Kansas &om the provisions of K.5.A. 13-1024a and providing substitute and additional provisions on the same subject relating to general improvements and the issuance of bonds for the purpose of paying for said improvements; and repealing Charter Ordinance Number 38, and amending Section 2. (4) a maximum of $7,000,000 under project category H. Commissioner Davis stated he was hoping the discuss~on would allow the local sub-contractors to bid on the project and stated the gap would be funded by the City of Salina. Mayor Blanchard stated this project was one step of a very publicized and very ambitious plan. He stated he was a strong proponent of downtown and felt the only way downtown was successful was housing in the core and health in the core. He went on to say there was a need to get the Pages 16-0057 16-0058 ages up in the community and the aeation of the economic development organization was a efit to the conununity. mmissioner Crawford stated she hoped the citizens would get on board with the project once the building started going up. Aye: (5) Crawford, Davis, Hardy, Ryan, Blanchard. Nay: (0). Motion carried. Mayor Blanchard noted there was a petition period av~ble for a charter ordinance. Greg Bengtson, City Attorney, stated the petition process was a process to conduct an election through the County Election Office upon review by the County Counselor. Mayor Blanchard asked if a packet of information could be put together on the petition process. Mr. Gage stated the County Election Office would be the appropriate office to provide information. Mr. Bengtson stated the sixty days would start after the second publii::ation of the ordinance. ~ Moved by Commissioner Hardy, seconded by Commissioner Davis, to direct staff to work with the design team to move towards the 3 x 3 B option for the Salina Field House. Aye: (5). Nay: (0). Motion carried. Moved by Commissioner Crawford, seconded by Commissioner Davis, to direct staff to work to with the project team to value engineer for the project budget cost and focus on options such as New Market Tax Credits and STAR Bond Districts or any other options. Aye: (5). Nay: (0). Motion carried. · Mr. Gage stated if the Commission would like to go through the complete indej>endent sealed bid approach, the Commission could make a motion to direct staff to bring back the approach at a later meeting. A conversation ensued between the Conunission, Mr. Gage· and Mr. Frew regarding the bid processes. Mr. Knight stated there were benefits to both processes and stated McCown Gordon Construction provided a discount of $75,000 for the overlap of the Bicentennial Center project and the Salina Field House project Bob Miller, 500 Country Oub Road, stated in our market area, there were only a third of the sul>- contractors that would bid the CMAR process but more contractors would bid the design, bid, build process. Commissioner Davis asked why the local sub-contractors would not bid the CMAR process. Mr. Miller stated it was a new process that not a lot of contractors were familiar with. Mayor Blanchard thanked everyone who worked on the Bicentennial Center project and the Fire Station No. 1 project and would like to stay with the process that was currently under way. 16-0059 Moved by Commissioner Hardy, seconded by Commissioner Ryan, to direct staff to make provisions to provide for a design, bid, build process approach for the Salina Field House at a future meeting. Aye: (5). Nay: (0). Motion carried. ADJOURNMENT Pagc6 16-0060 ! -i I oved by Commissioner Davis, seconded by Commissioner Hardy, that the regular meeting of the ard of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting djoumed at 12:09 p.m. [SEAL] A'I"l'EST: . ~lO!a handi Wicks, CMC, City Clerk Page7 i I (Published in the Salina Journal February 19 and February 26, 2016) Effective April 27, 2016 CHARTER ORDINANCE NUMBER 39 A CHARTER ORDINANCE EXEMPTING THE CITY OF SALINA, KANSAS FROI\f THE PROVISIONS OF K.S.A. 13-I024a Al\'D PROVIDING SUBSTITUTE AND ADDmONAL PROVISIONS ON THE SAl'\m SUBJECT RELATING TO GENERAL IMPROVEMENTS AND THE ISSUANCE OF BONDS FOR THE PURPOSE OF PA YING FOR THE IMPROVEMENTS; AND REPEALING CHARTER ORDINANCE NUMBER 38. BE IT ORDAINED b)• the Governing Body of the City of Salina, Kansas: Section t. Election to Exempt The City of Salin11t Kansas (the "City") by virtue of the powers vested in it by Article 12, Section S, of the Constitution of the State of Kansas, hereby elects to ex~pt itself from and hereby make inapplicable to it Section J 3-1024a, Kansas Statutes Annotated, that applies to the City, but is pan of an enactment which does not apply unifonnly to all cities, and thereby provides substitute and additional provisions on the same subject as hereinafter provided. Section 2. Substitute and Additional Provisions. The City of Salina, Kansas hereby adopts the following substitute and additional provisions of Section 13-1024a, Kansas Statutes Annotated: As a complete alternative to all other methods provided by law, the city may borrow money and issue its bonds for the purpose of paying the project cost (which may include acquisition of interests in real estate and architectural, engineering, and other professional services) for the following categories of projects: Project Category Description A. Streets. Construction, reconstruction, improvement or repair of any street or roadway located within or partially within the city limits and not designated as a main trafficway pursuant to K.S.A. 12-685 et seq. B. Bridges and Vi&ducts. Construction, reconstruction, improvement or repair of any bridge or viaduct located within or partially within the city limits and not located on a street designated as a main trafficway pursuant to K.S.A. 12- 685 et seq. C. Public Parks. Acquisition of land for public park purposes and acquisition, construction, reconstruction, improvement and repair of park and recreation facilities other than those more specifically addressed under categories G and H below, whether loaucd inside or outside the city limits. D. Public Buildings. Acquisition, construction, reconstruction, improvement or repair of public buildings or acquisition of land for the construction. reconstruction, improvement or repair of public buildings, whether located inside or outside the city limits. I E. Stonn Water Drainage Sy51ems. Improvement, extension, or repair of the city-owned water works and/or sanitary sewer systems. and appurtenances thereto, whether located inside or outside the city limits. F. G. Water Works and/or Sanitary Sewer Systems. Improvement, extension: or repair of the city-owned water worlcs and/or sanitary sewer systems, and appurtenances thereto, whether located inside or outside the city limits. Familv Aquatic Parle. Financing, constructing, equipping, supplying and maintaining a family aquatic park. H. Public Building for Recreational Purposes. Acquisition or construction of a public building for recreational purposes and acquisition of land for the consuuction of a public building for recreational purposes. ssuance of bonds by the city pursuant to this charter ordinance shall require authorization by a dority of the votes cast at an election held for that purpose, except, however, that in any calendar the city may issue bonds pursuant to this chaner ordinance without an election, as follows: (I) a maximum of$ I ,000,000 under each of project categories A through E; (2) a maximum of $2,000,000 under project category F; (3) a maximum of $12,500,000 under project category O; and (4) a maximum of$7,000,000 under project category H. Section 3. ealed. Repealer. That Charter Ordinance 38 of the City of Salina, Kansas, is hereby Section 4. Publication of Ordinance. This Charter Ordinance shall be published once ch week for two consecutive weeks in the official City newspaper. Section S. Effective Date. This Chaner Ordinance shall take effect sixty-one (61) days er final publication unless a sufficient petition for a referendum is filed requiring a referendum to be held on this ordinance as provided in Anicle 12, Section S, Subdivision (cXJ) of the Constitution of the State of Kansas, in which case the ordinance shall become effective if approved by a majority of the electors voting thereon. Passed by the governing body, not less than two-thirds of the members elect voting in favor thereof. [SEAL] ATI'EST: !lllitJL~ ... al~ks, CMC, City Clerk Introduced: February I, 2016 Passed:Fcbruary16,2016 P ote of S yes; 0 no; 0 abstain , Mayor Publisher's Affidavit I, Christy Fink , being duly sworn ----~------' declare that I am a Legal Coordinator of TiiE SALINA JOURNAL. a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for rave consecutive years prior to first publication of attached notice, and that the attached • Ordinance 39 notice has been correcdy published in the entire issues of said newspaper ____ _.tw ..... o _____ times, Subscribed and sworn to before me,, this __._/_2 __ _ day of "fYlfl.A.G.l-J A.O. 20 -1.k 'fi]Jha llui~blk Printer's Fee 5924.00 1' • ·: • • • ~,. ? ~"'*'*' lnb • BllliaJaumml t ~1.,: GllDllfAllC! • NUll9Slst ' A CtWnElt Oltllto ! NANCE !X!llPTINQ · ==~~' PROYlllOHI ' OP IC.I.A. ll-1-AND PROVIDING IUUTlo TUT! AND ADDI· 1IOHAL l'ttCMllONI ON 1HI UMI IU ... .llCT RILATINCI TO GEHlllAL lllPllOVI· lllNTI AND 'nm .. • IUAICCE' OF llOHDS POR THE' PURPOSE OP PAYING FOR Ttl2 m'nB:M~~: TH 'ORDINANCE ....... ·-:· IE If ORDAINED~ =~~ -= CERTIFICATE Of NO PROTEST STATE OF KA SA ) ss: COUNTY OF SALi E ) The under igned Clerk of the City of Salina, Kansas (the ·Cit •·) does hereby certify that the go erning body of the Ci ty dul passed Charter Ordinance o. 39, on February 16, 2016, that said Charter Ordinance was pub I ished once a week for two consecutive weeks on February 19, 2016 and February 26, 2016 in th e Salina Joumal the official City newspaper; that more than sixty (60) day have elapsed from the date of the la t said publication; and that the only written protest filed in my office against said Cha11er Ordinan ce, as pro vided in Article 12 Section 5 of the Kansas Constitution, was determined insufficient by the Saline County Election Officer. WITNESS my hand and official seal on July ~, 2016. Shandi Wicks, City Clerk I RESOLUTION NO. 19-7678 A RESOLUTION AUTHORIZING AND PROVIDING FOR THE DESIGN, CONSTRUCTION A1'"D IMPROVEMENT OF A PUBLIC PARK Al\"D THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO FUND A PORTION OF THE COSTS THEREOF, ALL PURSUANT TO CHARTER ORDINANCE NO. 39 IN THE CITY OF SALINA, KANSAS. WHEREAS, pursuant to Anicle 12, § S of the Constitution of the Seate of Kansas the City of Salina. Kansas (the "City") previously passed Chaner Ordinance No. 39 (the "Chaner Ordinance; relating to general improvements in the City, including the acquisition of land for public park purposes and construction, reconstruction, improvement and repair of park and recreation facilities and the issuance of general obligation bonds of the City to finance the costs; and WHEREAS, after publication of the Chaner Ordinance according to the law and expiration of the prescribed protest period with no sufficient protest, the Chaner Ordinance became effective; and WHEREAS, the City is authorized and empowered pursuant to the Chaner Ordinance to issue general obligation bonds for the purpose of financing the costs associated with the foregoing; and WHEREAS, the governing body of the City hereby finds and determines that it is necessary" to authorize and provide for the construction and improvement of certain public parks in the City, as more fully described herein, and to provide for the payment of the costs thereof. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section I. Project Authorization. The governing body of the City hereby finds and determines that it is necessary to make the following improvements: Improvements to the Salina Municipal Golf Course (2500 Crawford Street) including the design, construction and improvement of the irrigation system, and all other necessary improvements related thereto (the "Improvements"). Section 2. Project Financing. The estimated cost of the Improvements is Sl,500,000. The cost of the Improvements and the associated financing costs shall be payable from the proceeds of general obligation bonds and/or temporary notes of the City issued under the authority of the Charter Ordinance. Section 3. Reimbunement. The City expects to make capital c.,;penditurcs in connection with the Improvements and intends to reimburse itself for such expenditures with the.proceeds of general obligation bonds and/or tcmponuy notes in an amount not to exceed S 1,500,000, plus associated financing costs. Any general obligation bonds and/or temporary notes issued under the authority of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Reeulation §l.IS0-2. Section 4. This Resolution shall like effect and be in full force immediately after its adoption by the governing bod)•. 1 ADOPTED by the governing body of the City of Salina, Kansas, on March 11, 2019. (SEAL) AITEST: ~·tUm Shandi \Vicks, CMC, City Clerk 2 CITY OF SAUNA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS March 11, 2019 4:00p.m. The City Commission convened at 2:30 p.m. for Land Bank Policy and at 3:45 p.m. for Otizens Forum at Oty-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, Oty-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, OtyCerk. Absent: Karl Ryan AWARDS AND PROCLAMATIONS (3.1) Special Recognition for the Salina Police Department Mayor Davis read the Award of VaJor and presented the Award of Valor plaques to Sergeant Kyle Tomiges,Officer Michael Baker and Officer Kevin Reay. 0nzENS FORUM None. PuBUC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN nME None. CONSENT AGENDA (6.1) Approve the minutes of March 4, 2019. 19-0065 Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the consent agenda as presented. Aye: (4). Nay: (O}. Motion carried. ADMINISTRATION (7.1) Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Deparbnent and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration. explained the project,, request, fiscal impact and action options. Commissioner Hodges asked if the project was following the normal sequence of events for the ORT meeting. Michael Schrage, City Manager, stated there had been a ORT meeting for the project but the zoning change had not occurred. He further stated the normaJ sequence of events had varied for projects in the past and staff was working lo aeate a standard sequence. Page 1 Commissioner Hodges provided her thoughts on the sequence of events for projects. Commissioner Hoppock stated there was another agenda item pertaining to bonding of the items. Mr. Schrage stated that bond counsel was in attendance to discuss other options such as cash financing. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to adopt Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Department and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Oty to pay the costs thereof. Aye: (4). Nay: (0). Motion carried. (7.2) Resolution No. 19-7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Oty to pay the costs thereof. Debbie Pack, Director of Finance &: Administration, explained the project, request, fiscal impact and action options. Commissioner Hoppock asked if there were other projects to be completed under the Parks Master Plan would there be funds available in the property tax fund. Ms. Pack stated if this project was approved, there would not be additional funds available in this fund but could be in other funds or utilizing cash. Gina Riekhof, Gilmore & Bell, explained the funding options for the project and Charter Ordinance No. 39. Commissioner Hodges asked if the Charter Ordinance was the home rule power. Ms. Riekhof stated there was a provision in the Kansas Constitution that permitted home rule powers and continued to explain State Statute KSA 13-1024A and Charter Ordinance No. 39. Commissioner Hodges asked if the Oty of Salina had maxed out the limit on a project in the charter ordinance in the past and continued to fund the project in the next year through the same charter ordinance. Ms. Riekhof stated she was not aware of it occurring in the past but mentioned that Charter Ordinance No. 39 did waive the election requirement Commissioner Hay asked when the project was actually supposed to start. Scott Garrie, Deputy Director of Parks &: Recreation, stated the intent was to have the project start after September but had rccc..'ivcd some feedback wanting the construction to start sooner. Mike Hargrave, Golf Course Manager, stated the main lines were scheduled to be dug in late July and early August and begin the laterals by early September. Commissioner Hoppock asked what the major deficiencies were and what would happen if nothing was done. Mr. Garrie stated the budget for irrigation maintenance was $15,000 yearly and the cost continues to increase on a yearly basis. Mr. Hargrave stated the maintenance of the system continues to take additional time of the maintenance staff. Commissioner Hodges stated that the system had been depleting for at least 10 years. Mr. Hargrave stated at least if not longer. Commissioner Hoppock asked who was performing the cash flow analysis of the property tax fund. Ms. Pack stated there was an amorti7.ation schedule attached to agenda item 7.4. Michael Schrage, Oty Manager, stated staff had conversations with bond counsel on refinancing the bonds to even out the amortization schedule in the future. Ms. Pack stated she performed the amortization schedule and explained the schedule created. Pagc2 Commissioner Hodges asked for information on the debt service fund. Ms. Pack stated the debt service fund balance at the end of 2018 was $600,000. She continued to provide information on projects within the debt service fund. Jon Blanchard, 1117 State Street, provided information on Charter Ordinance No. 39, his thoughts on the project and asked the City Commission to look at additional alternatives for financing. Commissioner Hodges asked if the City Commission would like to amend the charter ordinance what that would look like. Mr. Schrage stated it would need to be prepared and brought back for consideration and asked if Ms. Riekhof would explain the amendment requirements. Ms. Riekhof stated staff would need to know what the amendment to the charter ordinance would be. She asked Greg Bengtson, City Attorney, if the ordinance could be approved on two readings on the same date. Greg Bengtson, City Attorney, stated the ordinance would be able to be approved on both readings on the same day with a 2/3 majority vote. Ms. Rielchof further stated the ordinance would require two (2) readings with a 2/3 majority vote and once passed the ordinance would need to be published once a week for two weeks and a 60 day protest period before the charter ordinance would go into effect. Mayor Davis asked if bond counsel could review the options for the $500,000 balance. Ms. Riekhof stated lease purchasing, cash financing, phasing the project over multiple years, or resizing the project to fit the $1 million dollar amount A conversation ensued between the City Commission regarding the financing options. Commissioner Hoppock asked if there was a reason Charter Ordinance No. 39 listed $1 million dollars for public parks. Mr. Schrage explained the history of the various charter ordinance adoptions. Mayor Davis provided his thoughts on the current request and Charter Ordinance No. 39. Mr. Bengtson stated the amount was not the crucial amendment to addressing the policy decision. He further stated the charter ordinance would need to be amended to limit the bonding amount and the overall project cost. He continued to state the charter ordinance limited the bonding of the project not the project amount and Gilmore & Bell would not have offered this financing option if it was not in line with the charter ordinance. Commissioner Hay asked if the charter ordinance was amended what affect would it have on Agenda Item 7.4. Mr. Schrage stated the debt service financing of the irrigation project would not be able to occur until the charter ordinance amendment went into effect. Mr. Schrage stated if the commission wanted to debt finance $1 million dollars and cash finance the $500,000, conversations would need to occur on the effect on other projects. Commissioner Hodges provided her thoughts on cash financing the remainder of the project. 19-0067 Moved by Commissioner Hoppoclc, seconded by Commissioner Hay, to adopt Resolution No. 19- 7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the Qty to pay the costs thereof. Aye: (3). Nay: (1) Hodges. Motion carried. (7.3) Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Pagel f "' i i j Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked what the invesbnent was on the project so far. Jim Kowach, Director of Public Works, stated approximately $50,000. Commissioner Hodges asked about the scope of the project changing. Mr. Kowach stated staff would like to look at the entire project and thought there was a need for additional engineering and would like to bring the item back for additional scoping. Michael Schrage, City Manager, stated staff asked RDG Planning & Design if the project was paired down would it be able to fit in the $3 million dollar budget. Commissioner Hoppock provided his thoughts on the project and the need for further discussions prior to spending the additional money for design. Mayor Davis asked what the properties would look like beyond the sidewalk. Mr. Schrage stated it was more of a master plan or land use factor and continued to explain what the project would look like if it was phased out Lauren Driscoll, Director of Community & Development Services, slated the improvements recommended in the plan would fall within the Comprehensive Plan. Mayor Davis provided his thoughts to the uses of some of the properties and the driveway entrances. A conversation ensued between the City Commission, Ms. Driscoll and Mr. Schrage regarding the project plan. Commissioner Hodges provided her thoughts on the project and eliminating the budget for brick street maintenance. Mr. Schrage slated this project had been the topic of conversation for years and if the Governing Body had a concern for the design expense, staff could break up the design of the project Commissioner Hodges stated she would like the project to be part of the Strategic Planning session coming up in April. Commissioner Hay asked if they could look at option 2 Mr. Schrage stated the item could be postponed or could be brought back at a later date. Mr. Kowach stated the project area was close to needing a pavement overlay but there was need of additional investigation of whether the project would need to be completely rebuilt or just a pavement overlay and the investigation would cost approximately $50,000. 19-0068 Moved by Commissioner Hodges, seconded by Commissioner Hay, to postpone consideration of Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof with any additional information supplied by staff to Monday, May 6, 2019. Aye: (4). Nay: (0). Motion carried. The Qty mmission recessed at 5:45 p.m. for a 5 minute break. The meeting resumed at 5:50 p.m. (7.4) General Obligation Bonds and Temporary Notes. Pagc4 i (7.4a) Resolution No. 19-7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.4b) First reading Ordinance No. 19-10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Commissioner Hodges appreciated the extra time and additional information provided by staff and thanked Ms. Riekhof for coming today and preparing a memo regarding the state statutes. Michael Schrage, City Manager, stated one of the items financed was the Pheasant Ridge Addition project and staff chose to put the financing mechanism first then the action for the contract. Jon Blanchard, 1117 Stale Street, provided his thoughts on the bonding of the downtown streetscape project especially the overhead structures, provided information on the main traffic way act and asked if the legislature intended for overhead structures, benches, trash receptacles and plazas to be part of the main traffic way act He asked if we were funding part of the downtown strcetscape project with sr AR Bond money. Mr. Schrage stated the accounting demonstrated how the STAR Bond money would be used. A conversation ensued between Mr. Blanchard, Ms. Pack and Mr. Schrage r<?garding the financing of the Downtown Streetscape project. Mr. Schrage read a portion of the language included in the staff report from January 17, 2017 pertaining to the scope of the Downtown Streetscape project 19-0069 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. Aye: (3). Nay: (1) Hodges. Motion carried. 19-0070 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to pass Ordinance No. 19- 10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A on first reading. Aye: (3). Nay: (1) Hodges. Motion carried. (7.5) AwarJ. contract for Pheasant Ridge Addition No. 3, Phase Il, Project No. 80025. Jim Kowach, Director of Public Works, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked if there was an overage, would the City be responsible for it Mr. Kowacb stated if there were changes or modifications to the plan, it would be the responsibility of the City. Mayor Davis asked if there were modifications would staff meet with the contractor to discuss. Mr. Kowach stated yes. Joan Ratzlaff, Salina, asked what the prices would be for the houses and lots in the subdivision. Todd Welsh, 221 S. Morris Drive, stated the homes would be in the $225,000 to $325,000 range and the lot pric:eS would remain at $35,000 each. He provided information on the project bids and asked the contingency amount to be returned to the developer instead of to reduce the special assessments. Ms. Ratzlaff provided ber thoughts on the Broadway Boulevard Improvements and the Pages i .. Ill I need for affordable housing. Wayne Nelson, Civil Engineer ll, stated the construction contingency allowed for change orders to occur in the field, up to the approved amount and if there was remaining conti11gency the project final cost would come under the approved amount and the special assessments would be reduced based on the project final cost. Michael Schrage, City Manager, asked in the event the project comes in without using the contingency would the developer's expenses be eligible for reimbursement. Gina Riekhof, Gilmore & Ben, stated a portion of the money paid upfront by Mr. Welsh could be returned if it remained unused. Mr. Schrage stated it was possible the remaining amount could be returned to Mr. Welsh but that would have to be determined at the end of the project. A conversation ensued between the City Commission, Mr. Schrage, Mr. Kowach and Mr. Welsh regarding the ability to refund any remaining construction contingency to the developer. 19-0071 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to award contract for the Pheasant Ridge Addition No. 3, Phase ll, Project No. 80025 to APAC-Kansas in the amount of $509,233.15 with a 5% construction contingency of $25,461.66 for a total of $534,694.81. Aye: (3). Nay: (1) Hodges. Motion carried. (7.6) Acceptance transfer of ownership of the Former Schilling Air Force Base Treatment Plant property (Water Well Road & Ohio Street), five water well sites and water transmission lines. Martha Tasker, Director of Utilities, explained the acceptance, the project and action options. Mayor Davis asked if there was a specific change in the motion. Ms. Tasker stated the language should state the Former Schilling Air Force Base Water Treatment Plant Property. Greg Bengtson, City Attorney, stated Tract 108 and 111 were owned by fee title by the Salina Airport Authority and would be owned by fee title by the City of Salina. He continued to state the remaining properties were considered as easements and would be assigned over to the City of Salina. He further stated that staff would be able to include additional information on the document for those easements due to information that was obtained by John Harvey, the Oty Surveyor. Mr. Bengtson explained the specific sections of the Kansas Umited Warranty Deed. 19-0072 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to accept transfer of ownership of the Former Schilling Air Force Base Water Treabnent Plant Property, Tract 108 and 111. Aye: (4). Nay: (0). Motion carried. (7.7) Approve Change Order No. 1 for the Brick Crosswalks, Project No. 80012C. Jim Kowach, Director of Public Works, explained the project, change order, fiscal impact and action options. Commissioner Hodges asked if we were taking Brick Street Rehabilitation off the table. Mr. Kowach stated no, staff was going to pool money from other projects for a significant stormwater repair at the comer of Mulberry & Fifth Street. Pagc6 19-0()J3 i Micha<!l Schrage, City Manager, stated with the brickwork and the stormwater project at Mulberry and Fifth Street, there would be significant changes to the area. Mr. Kowach stated yes, that was correct. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to approve Change Order No. 1 authorizing $4,529.10 (Option 2 bid amount minus previous authorization) plus a $2,970.90 (12.1 % of entire project) construction contingency for City Project No. 80012C Brick Crosswalks. Aye: (4). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1) Application No. Z19-l, (filed by Joe Hill on behaH of the Joe Hill Trust), requesting a change in zoning district classification from 1-2 (Light Industrial} to R-2 (Multi- Family Residential) to allow construction of two new residential dwellings at the southwest comer of Reynolds Street and Lincoln Avenue. (8.la} First reading Ordinance No. 19-10996. Dean Andrew, Director of Planning, explained the request, Planning Commission recommendation and action options. Commissioner Hoppock asked if Mr. Hill owns the south part of the mobile home park but was just leaving it vacant. Mr. Andrew stated yes. Barb Young, 1100 West Grand, wanted to commend Joe Hill for his request for infill and wanted the item to be considered a positive move forward. 19-0074 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to pass Ordinance No. 19-10996 changing the mning district classification from 1-2 (Light Industrial) to R-2 (Multi-Family Residential) to allow construction of two new residential dwellings at the southwest corner of Reynolds Street and Lincoln Avenue on first reading. Aye: (4). Nay: (0). Motion carried. (8.2) First reading Ordinance No. 19-10995 requesting annexation of the South Water Treatment Plant site located at the southeast comer of South Ohio Street and East Water Well Road. Dean Andrew, Director of Planning, explained the request, stated due to the property not being contiguous with the city limits, the property could only be annexed in with the consent of the Saline County Commission which would require an additional action to approve a resolution that staff has distributed to the commission, and the ordinance. Mr. Andrew asked legal counsel if the motion for the ordinance should be made first. Greg Bengtson, City Attorney, stated yes. He also stated the Kansas Limited Warranty Deed was in hand for signature. Commissioner Hodges asked if staff had approached county staff regarding the annexation and if they were in approval of the annexation. Mr. Andrew stated staff would work with the County Administration to take this item to the Saline County Commission. Mr. Bengtson stated it would depend if the county would hold foe interest of the road in question and stated if the road annexation and impact fee agreement remained active, the county would not require annexation of the road. Mr. Andrew stated the County Counselor was aware of the request and he would be working with the Saline County Planning Department tomorrow to discuss the request. Jon Blanchard, 1117 State Street, stated the population information would be available soon Page7 19-00fs i and there needed to be a conversation on the potential increases in water bills in the future. Commissioner Hodges stated there was no fiscal impact of the item today and would complete getting the property under our control. Moved by Commissioner Hodges, seconded by Commissioner Hay, to pass Ordinance No. 19- 10995 requesting annexation of the South Water Treatment Plant site located at the southeast comer of South Ohio Street and East Water Well Road on first reading. Aye: (4). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to adopt Resolution No. 19-7688 requesting the Board of Saline County Commissioners to determine the advisability of the annexation of a tract of land into the City of Salina, Kansas and give its consent to such annexation. Aye: (4). Nay: (0). Motion carried. OTHER BUSINESS (9.1) Request for executive session Qegal). I move the city conunission recess into executive session for _ minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to K.S.A. 45-7319(b)(2). Tite open meeting will resume in this room at p.m. 19-0077 Moved by Commissioner Hodges, seconded by Commissioner Hoppoclc, to recess into executive session for 30 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 5 minute break at 7:30 p.m. and recessed into executive session at 7:35 p.m. and reconvened at 8:05 p.m. No action was taken. 19-0078 Moved by Commissioner .Hodges, seconded by Commissioner Hoppock, to recess into executive session for 10 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:16 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 8:06 p.m. and reconvened at 8:16 p.m. No action was taken. ADJOURNMENT 19-0079 Moved by Commissioner Hay, seconded by Commissioner Hodges, that the regular meeting of the Board of Oty Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:16 p.m. Pages [SEAL] A'JTFST: ' ~~ Shandi Wicks, CMC, City Clerk Trent W. Davis, M.D., Mayor Page9 ; ~I ii I f le -iig a If~ ~~ ! IJ Ji I 111 I s~ • '' I~ t if i~~ I; :~ ·1 fJ I ~ ~se i :f Iii f 11 i · !ll I i!i ; 1rJ ~ ~ ,i I ~I~~ 1f · o J f · r >a1111" a. 1i' Jr ii ~f I !11 I l!f 11 ~ i I I, .. .. ~ I . a. , · l l d I fr· H I I r !I~ 111a . I i'~ J!se ' 111 1 f.f f JI 1 1f r i11 z!e ! !!Iii iii !1 i ilJ I I' if a.tr i I f ·' c i s• .. I H~ IB ur 0 a.~r I r1~ 11 >o if g g g . g . 111 I ~ s; I: p r ; ~ i ,~ f Jt ,~ ;; 1~1 ~ f I f ~ 1~ ~ I J ~ if I 1·1 ~I I, Jl 1'1 ~,, I 11 J ~~ ' _, 1· 111• 11~ f 11 1 r ' ~ H .. . I~ r ~,I r J~ 11 ~g af 1!J iii f t I if I ! f 1 ! a I I a . = ~ 11 t r F • J 1,:!::t 1. 1 r .... 1 !I ~" ; 1 1 ~ i:i !I s a ~ i !m •i re l i IJ i I I 'f ii ll I !i iii ~ l ! I I I if J If ' I t t i ii I lf lJ! i ! 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I r ti r! if i! i! ~ii if If I I I .1 Ii ~I J i 'J ' I Ii !I JI 11 If l!J II J I i I I Ii 1: I ' ! I 1! i '! .-~ IJ l f ~--R B' ~ ... I -a It , , I t l ~1 i p I . I !r I f t r ~· a 0 ,,. Mdaml 02-Sl9 ADIOURNMINT Mowd by Qnmf•sioner Jilb. IOCOllded by Cornmfpf":llJr:r DI.me, lbat die Regular Medias oldie s-d ofCmmnlssfcmm be ldjoumed. Aye: (S). Nay: (0). Modoa c:mfod. 1'bo meedng ldjoamo4 at 4:32 p.m. p~ rtH r-" ,. .. ti= P ,. "" "' ri "' ~ ( u I' II !~~~ fl" ii: iii f~I II i 1!1 If~ l~i ii_i t~~ ii~ J.~t :1 ! I. i~ r ~ii ~lJ ii.! lf I Ir~ Iii f ll iii ill 11-i .. ii i !t & I i al ·1 ii 'ti }wi itj 111 atl ~ii ;a~I "J~ 'Ir . ~~ iJ h h Ir J1, ~~I qu h 9U l:a if I Hi r ~s~ ii! 111 j f s· r t I 8 f . N M CID1iDs trdlic bclweeD the City's norda CCDbll llld I01dhan COiiiiDeftUl dilldds llld ia. piDcfpalmet cmying nardlllcndb trdic lbroa8h 1be camI portion oltbo City. M. NOIU11S'IRBB'I'isam1Jarm.ial11reetrumi.lq hm tbewatcity limits to die cat city limill ad ii. prim:ipa1 llreet C8ll)'iDa eutlwest tramo tlnagh tho nmth portion o1111o a1y. N. omo snumT 11amJarllfaill111\!d nmn1na IOlltb 1am aae ottbe JabiadldB 70 fllleldilnaes to die ICllllh city limlll llld II the pdncipal meet CIDJDllllCldb.lloath 1raBic cm tho wt-cenlnl aide of tho Qty. O. PACPIC AVJ!NUB isa~arterial lllllCltluaaing em JiamNilllh Sbcl to the .. city limlll ad ii. priacipal llrcct cm)'iDa Cllllwest bafBc fhroagh 1be Dlldb partion ofdle Qty. P. REPUBUC AVBNUB ... ~ collecaor llreet nmnina eut mm Ccntamial Road to die cat citylimitncmtbe Oood lmc Q11rm ad la. priDcipll street cm,ina eat/wal tll1lic dlrouah the IOllth pmticm ofdleaty. Q. SANTA FB A'VBNUB is a J111jor artcria1 1bect nmniq DCldh fiam CJaflfa to Oda llld ... principal llrect can,iQs llClldilloalb traftic llmlagll the CCDbll pGrtion oftllo City. R. sam.tJNG ROADlaamJar llfaial llreetrmmfna watiom Ohio Street to AmoJd AWlllle fa tllo Allport IDdallrial Ana llld is I p.riacipa1meetClll'yinseutJwestlrdictlnaagli1be IOalb portion ar dioaty. S. SOUI1I STRBBT fl 1 mJor coJlec:tor street rmmlns eut &om Bmadwq BoaJmn1 to FGarlb Sln=et and ii I principll llred ccrying catlwat tnflic dnqb the cealral portian olthe Cly. T. STA'IE S11tBID' Is a~lltaial llrldrmmlal-hm llllmtllfc 135 to 1bo &lClllrl1 bulma dillliat ad ... p:lncipal ltnat cm)'ing eat1wat tllflic Cbmq1a t11c DOdh partion ora. aty. U. WATBR. WBU. ROAD II a msjor artcfal llrM nmalng Wit hm NinfbStreel dmr&la a.e IGlllllmd ora...,indm«rW ma to Abpad Raed. and ii a piacipal 11n1c1t CID7hig eat and Wiit trdic bctwem mejor lntlmldal camamrclal and lnlmtatll 135 fDterdmlses. 5rt!1e 2. 1'blt Alb Siled. BelmaatBaalevlnl, Bl'Olldwq BauJmnf. Q:nlmnial ROid, aa.l Street, Coaaby Clab 1bled. Oawbd Awaae. lllla AWllUll, Mapolfa Road, Mmklq ROid, ~Rmd, NfnlbStreee, Noda StreeC, Ciiio SfNd, Pict& A--,Rqia1illoAwme, Slld&Jr. A..._ SehilHngRmd, Salllh Slnec, Stlte snot, ad Water Well Rmd 1n1bcnby dmipted ml ,.,,,,,..., • "mlin 1mflir.wl:yl" pll'lllllll fD Jt.S.A. 12-4515. """en 3. To pnMdD ........... cmmldlom wilh the Ciiio SlnetmliD tmflic-rin aaler fD nliew9tndBceqe&1ian111111 milia.a. tramo llfcty ._ nlaW to tbo OCIDllnlCtimotebo Nmtb ado ICaUload OftlPISI 11111 ldlled lmpmwmenll ii is uecemry to esbli&m die followlaa .. tnflicway CI nnrc4iam A. VAN HORNB STRBET-At 111111 near ils connectioD wilb North Ohio Street. B. YORK. STRBBT-M ml near ill eaaaectioD with North Obia Street. C. UNNAMBDPR.ONTAGBllOAD-To bo ............ cmbmcrNodb OllioSlnet d&bl-o~WIY to coanect sea lll'eltl wilb redped Nodb Ollfo S1neL M'en 4. TUI Ordialce Namber"-9562 ishmh)'npaled. - ,.., s. That ttn. ordinance Wl1 be in filll me llld dl'ect &om lad after its ldoplioa ad pablicdon once fD the ofliciaJ city newspaper. Lieu Allll Nicola, aty Ciak ID1nlducccl: Pcbnllly 11, 2002 Puled: FebntmJ 25, 2002 ..... -I . ,.. ---·. ---- I ' Affidavit of. Publication OnL No. o.z.ucrn. F.ollowlnal1alnleandC0"9Clcoprof ______________________ _ ,.,,_ """ proof of pullllelttcjft of ,... UlllL . ... AFFIDAVIT '·---....:::ICha=.:.N::.:m::.:~=DOCl;;;.. __ 1111ftO da!Y lwom, decllrll that I Im U. Mw!Ullna Manqer of THE MUNA JOURNAL. a dllllr n......-pubtlehld at ...... lalfne eaum,,•IClnlll, and of..,.,.. clrc:ulaUon In uld countr, whlctl lllWIP91* 11aa bffn cont1nuoustr Ind uni• tenuptedlr putllllhad for fin collllClltlft ,..,. prior to ftrst llUbllcatlon ol IUIOllad nottae. and Uiat 1111 aftadlld--:. QnL No. CD-100'1l hll lllln cornctlr pubtlallld ... uld ....... ,_t __ tlmn, _____ _ lntht""" ol~~-, 11--~,,em/ i I OTY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS March 4, 2019 4:00p.m. The City Commission convened at 2:30 p.m. for Fire Department Performance Analysis at Fire Station No. 3 at 2633 Belmont and at 3:45 p.m. for Citizens Forum at City-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppock, and Karl R)'an. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, CityOerlc. AWARDS AND PROCLAMATIONS None. CmzENSfORUM Lisa Graham, 1310 E. North Street, provided information regarding a case of unequal treatment by Brad Nelso~ Police Chief and Christina Trocheck, City Prosecutor. Michael Schrage, City Manager, stated he had reviewed the incidents with Chief Nelson and the documentation provided by Ms. Graham. He continued to state that staff was not able to come to same the conclusion as Ms. Graham. Mayor Davis asked if there were certain remedies that could be suggested to Ms. Graham or further action that could be taken. Greg Bengtson, City Attorney, stated he was not aware of any offhand. Mr. Schrage agreed. Ms. Graham continued to provide information on the incidents. Mayor Davis asked if Ms. Graham talking with the city prosecutor was an option. Mr. Schrage stated he could try to facilitate that conversation. Commissioner Hodges pro\'ided her thoughts on the matter. M&)'Or Davis thanked Ms. Graham for coming to the commission and stated that Mr. Schrage would be in contact with her. Norman Mannel, Salina. provided his thoughts on the conduct of law enforcement, the need for additional training of the officers and provided information on an article in the newspaper relating to law enforcement. Michael Schrage, City Manager, asked Mr. Mannel if he could provide him with information on the date of the article in the newspaper. Pusuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of February 25, 2019. Page 1 (6.2) Approve Resolution No. 19-7681 appointing members to the Accessibility Advisory Board, Community Art and Design Advisory Committee and Tree Advisory Board. (6.3) Approve Resolution No. 19-7680 authorizing the Mayor to execute a Vault aosure Agreement allowing for closure of an underground vault in the public right-of-way located at 144, 146and148 S. Santa Fe Avenue with the Boyd E. Smith Trust. (6.4) Award contract for the 2019 Chip Seal, Project No. 90019, to Circle C Paving and Construction, LLC of Goddard, Kansas, in the amount of 5130,649.05, with a $9,350.95 contingency (7.1 %). Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMll\'ISTRA 110N (7.1) Resolu~on No. 19-7683 authorizing the acceptance of a grant award from the Federal Edward Byrne Memorial Justice Assistance Grant Program as a sub-grantee of the State of Kansas under the Kansas Governor's Grants Program for upgrade of the Computer Aided Dispatch (CAD); authorizing the use of 911 Funds to assist in the funding for any remaining costs associated with the upgrade; and approving an amendment to the City's current agreement with Tyler Technologies, Inc. for the CAD upgrade. Wayne Pruitt, Communications Supervisor, explained the grant program,, grant award, the agreement, fiscal impact and action options • • Commissioner Hodges complemented staff on their negotiation skills. Commissioner Hodges asked if the fire and EMS software would work with the CAD program. Mr. Pruitt stated the software purchase included the necessary components to allow the programs to work together. Commissioner Hay asked if there was annual maintenance of the system. Mr. Pruitt stated the cost of the annual maintenance was split out between the city and the county. Commissioner Hay asked if the software upgrade would benefit the backup system. Mr. Pruitt stated the backup computen would be upgraded as well. Mayor Davis asked if this item and the anticipated upgrade to the community wide radio system were tied together. Mr. Pruitt stated the radio system and the CAD system were two separate systems. Commissioner Hoppock asked what else was paid out of the 911 funds. Mr. Pruitt stated there was an annual maintenance fee for software from the State of Kansas, CAD, mobile bills, 24-hour voice recorder, and copy machine to name a few. 19-0059 Moved by Commissioner Hay, seconded by Commissioner Hodges, to adopt Resolution No. 19- 7683 authorizing the acceptance of a grant award from the Federal Edward Byrne Memorial Justice Assistance Grant Program as a sub-grantee of the State of Kansas under the Kansas Governor's Grants Program for upgrade of the Computer Aided Dispatch (CAD); authorizing the use of 911 Funds to assist in the funding for any remaining costs associated with the upgrade; and approving an amendment to the City's current agreement with Tyler Technologies, Inc. for the CAD upgrade amending the use of 911 funds in the amount not to exceed $33,220 in Section 1 and the current Pagel agreement with Tyler Technologies the amount not to exceed $106,600 in Section 2. Aye: (5). Nay: (0). Motion carried. (7.2) Resolution No.19-7677 authorizing and providing for the removal and replacement of the North Ninth Street Bridge and authorizing the issuance of Temponuy Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request.. fiscal impact and action options. Commissioner Hoppock asked if the project was for both sides of the bridge or one side. Ms. Pack stated one side. Commissioner Hoppock asked for information on the point scale of the bridges and when would the bridge be not drivable. Dan Stack, Qty Engineer, stated once a bridge was opened it was automatically a 7 and could continue to downgrade. He continued to state once a bridge was downgraded to a 2 or lower, the bridge could be closed. Jim I<owach, Director of Public Works, stated a bridge listed as a 4 on the point system was safe to the public but was posted at 20 tons. Commissioner Hodges asked if a 20 ton load was equal to most semis. Mr. Kowach stated the truckers were aware of how the ton limit affected them. Commissioner Hodges asked if we get many permits for an oversize load on a bridge. Mr. Stack stated staff gets a haH a dozen or less a year for different areas in to\\'11. Commissioner Hodges asked if preventative maintenance was performed on bridges prior to the need for replacement and whl!lt the typical life span was on a bridge. Mr. Stack stated most bridges were built with less load limits requirements in the 1930's to 1950's than today. He continued to state there were options for rehabilitation but it depended on the structure of the bridge. Michael Schrage, City Manager, stated the inspection schedule was a proactive step and staff had worked to determine if replacement of the bridge was the best option. Conunissioner Hodges asked if the authorization was required to bond the project. Ms. Pack stated due to the ordinance we were able to designate the area as a main trafficway. Norman Mannel, Salina, provided his thoughts on the amount of weight a truck can hold. 19.()()6() Movm by Commissioner Ryan, seconded by Commissioner Hay, to adopt Resolution No. 19-7677 authorizing and providing for the removal and replacement of the North Ninth Street Bridge and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Aye: (5). Na)': (0). Motion carried. (7.3) Approve 2019 Vehicles & Equipment Purchases. Debbie Pack, Director of Finance & Administration, explained the bids received, fiscal impact and action options. Commissioner Hodges asked what was included in the total of up to $1,037,040 on the 2019 Sub-CIP sheet Ms. Pack stated the items highlighted in yellow were moving forward; the items highlighted in green were the three (3) one ton units to be bid on March 15"'. She further stated the 5 Ton dump truck would be moved to 2020 and the 6 foot mower would be rebid and the 10 foot mower and 300 gallon turf sprayer were under further review. Page3 Commissioner Hodges stated the sales tax fund balances and asked if there was some concern with the fund balance being under S750,000. Michael Schrage, City Manager, stated staff was mindful of th~ target fund balance and the agenda items coming before the Oty Commission. Commissioner Hodges asked where the 1 % increase in the sales tax fund came from. Ms. Pack stated it was just being conservative on items moving forward. Mr. Schrage stated staffs intent was to look at the most recent information and provide the most updated information when items were presented to the commission. Commissioner Hay asked if we were required to take the low bid. Ms. Pack stated we typically take the low bid unless it does not meet our specifications. Mayor Davis asked if there was a small percentage amount could the bid be kept local. Mr. Schrage stated we have not adopted a local preference polic)'. He further provided information from the purchasing policy relating to the bid award. Mayor Davis asked if the bids matched penny for penny what would happen. Mr. Schrage stated it would be up to the Governing Body to determine what the outcome would be. Mayor Oa\•is asked if a low bid did not meet specifications at what point would the bid be rejected instead of listed as not meeting specifications. Mr. Schrage stated there was an obligation to report all bids. He further stated the bids probably do not need to be listed as low bidder on the spreadsheet Mr. Schrage asked staff to provide information on the entire process of specifications for bidding of vehicles and equipment. Jim Teutsch, Operations Manager, provide detailed information on the specification and bidding process. Commissioner Hay provided his thoughts on selecting a local bid for the purchase of the Half Ton 4x4 .crew Cab pickup. Commissioner Hoppock provided his thoughts on the bid selection. A conversation ensued between the Qty Commission regarding local bidder's preference. Norman Manne), Salina, provided his thoughts on a local bidder's preference. Mr. Schra~ stated he was aware of the incident Mr. Mannel was referring to and staff had prepued the documentation to show all information available to give the City Commission the ability lo make the best decision. 19-0061 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the 2019 Vehicles and Equipment Plan as recommended, authorize staff to proceed with purchases and authorize the City Manager to sign contracts with selected vendors. Aye: (5). Nay: (0). Motion carried. (7.4) Award contract to paint the exterior of five slides at Kenwood Cove Aquatic Park. · Jeff Hanunond, Recreation Supervisor, explained the project, bids received, fiscal impact and action options. 19-0062 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, lo award contract to Dale Cooper LLC dba Safe Slide to paint the exterior of five Kenwood Cove Slides in the amount of $68,800. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS Page4 0mER BUSL'lESS Commissioner Hodges asked if she could have confirmation on the status of the joint tipping fee agreemenl Greg Bengtson, City Attorney, stated the exhibits were finalized to reflect the descriptions of the roads and were approved by engineering staff for both the City of Salina and Saline County. He continued to state a joint statement of the Qty Attorney and County Counselor was submitted to Judge Elliott, upon receipt, he replied that he had retired fully as a district court judge and was unable to sign off on the matter. He further stated that the County Counselor had a conversation with Judge Hidcman that would allow Judge Hickman to be reassigned to the case. He further stated that the revised order would be resubmitted to Judge Hickman to review. Commissioner Hodges asked if the revision made any changes of the documents approved by both the Salina City Commission and Saline County Commission. Mr. Bengtson stated there were no modifications to the text and the exhibits were created and approved by both city and county staff. Commissioner Hodges asked what the timetable was to have the matter completed and behind us. Mr. Bengtson stated the joint petition had been filed with the agreement attached. He continued to state once Judge Hickman was assigned to the case, staff would re-file the order. He further stated he hoped it would be completed in the next ten (10) days. Commissioner Hodges thanked staff and Great Plains Manufacturing on the partnership to provide the community opportunity to seed and plant the prairie restoration areas at Indian Rock Park. Commissioner Hodges asked if a parks tour could be scheduled. Michael Schrage, City l\.fanager, stated staff was working to put together a tour schedule. Mr. Schrage provided an update on the concrete of the fieldhouse floor, the downtown streetscape project the Alley Entertainment Center, downtown hotel, the Police Training Center and the county expo center agreement Commissioner Hoppock asked if we were still dealing with horizontal and no vertical cracks on the fieldhouse floor. Mr. Schrage stated correct and continued to state there was a need for additional testing on the floor. (9.1) Request for executive session (real estate). I move the city commission recess into executive session for _ minutes to discuss the potential acquisition of specific real estate, the identification of which would be contrary to the public interest, based upon the need for the preliminary discussion of the acquisition of real property pursuant to I<.S.A. 75-4319(b)(6). The open meeting will resume in this room at __ p.m. ,9-0063 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to recess into executive session for 20 minutes to discuss the potential acquisition of specific reaJ estate, the Identification f which would be contrary to the public interest, based upon the need for preliminary discussion Pages of the acquisition of real property, pursuant to KS.A. 75-4319(b)(6). The open meeting will resume in this room at 6:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 2 minute break at 5:43 p.m. and recessed into executive session at 5:45 p.m. and reconvened at 6:05 p.m. No action was taken. ADJOURNMENT Moved by Commissioner Hay, seconded by Commissioner Ryan, that the regular meeting of the Board of Qty Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:08 p.m. [SEAL] A'JTEST: ~tJ~ Shandi Wicks, CMC, Oty Oerk ~~r'l Trent W. Davis, M.D., Mayor Page6 I RESOLUTION NO. 19-7677 A RESOLUTION INITIATING PROCEEDINGS BY THE GOVERNING BODY FOR IMPROVEMENTS TO THE N. 9m STREET BRIDGE IN THE CITY OF SALINA, KANSAS. \\'HEREAS, by the adoption of Ordinance No. 02-10071 on February 25, 2002, the ovcming body of the City of Salina, Kansas {the "City"}, designated Ninth Street as a main trafficway pursuant to K.S.A. 12-685 et seq. (the '~Act''); and WHEREAS, the governing body of the Cit)' has detcnnincd that it is necessary to improve or reimpro\'C ponions of said main trafficway as follows: Removal, replacement and reconstruction of the North~ S~t bridge, and all other related improvements including, but not limited to, right of way acquisition, design, engineering, construction, consultant inspection, drainage improvements and other related and necessary improvements; and (the "Improvements"}; and 'VHEREAS, repons, estimates and plans ha,•e been compiled and furnished to the oveming body of the City to provide them with sufficient infonnation in order to enable them to commence proceedings for the construction of the Improvements. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE TV OF SALINA, KANSAS: Section 1. Jt is hereby deemed and declared to be necessary to make the Improvements under the authority of the Act, in accordance with plans and specifications therefore prepared or approved by the City Engineer. Section 2. The estimated cost of the Improvements is $2,000,000. The cost of the Improvements and the associated financing costs shall be payable from the proceeds of general bligation ~nds andlor temporary notes of the City issued under the authority of the Act. Section 3. The Cit)' expects to make capital expenditures in connection with the provements and intends to reimburse itself for such expenditures with the proceeds of general obligation bonds and/or temporary notes in an amount not to exceed $2,000,000, plus associated nancing costs and costs of issuance. Any general obligation bonds andlor temporary notes issued under the authority of this Resolution ~y be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Regulation §1.150-2. Section 4. This Resolution shall take effect and be in full force immediately after its adoption ry the governing body of the City. 1 ADOPTED by the go\'cming body of the City of Salina, Kansas, on March 4, 2019. (SEAL) AITEST: Shandi Wicks, CMC, City Clerk 2 l L L CITY OF SALINA, KANSAS SPECIAL MEETING OF THE BOARD OF COMMISSIONERS March 25, 2020 4:00p.m. Mayor Hoppock asked the Clerk for verification that notice had been sent for today's City Commission meeting. The Clerk replied yes. The Special Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Michael L. Hoppock (presiding), Commissioners Trent W. Davis, M.D., Rod Franz, Melissa Rose Hodges, and Karl Ryan. Also present Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS None. CmZENS FORUM Michael Schrage, City Manager, provided information regarding the new format for the meetings due to the guidance from the Centers for Disease Control (CDC) and the Kansas Governor including public input. He provided information regarding the meeting requirements for the Kansas Open Meeting Act. He also provided the call-in phone number along with the participant number that citizens would need to use. Mayor Hoppock made a few comments regarding the COVID-19 virus, the precautions necessary, thanked City staff, Saline County and Jason Tiller, Saline County Health Officer, for their hard work. He also made comments regarding the effect on local businesses and how the Salina Area Chamber of Commerce could be of assistance to those businesses. He lastly asked for all individuals to pray for our community, the nation, the first responders, and the business community. Kenny Hancock, Salina, provided the information on the level of detail between City staff and the baseball/ softball group on the creation of the development agreement for the baseball/ softball project and asked for a commitment that the City will consider discussing the project within the next 30 days and if that is not reasonable to extend another 30 days. Michael Schrage, City Manager, stated that the request was part of the first agenda item and can be discussed at that time. Jane Anderson, Friends of the River Foundation, provided information on the Smoky Hill River Renewal project. Joan Ratzlaff, Salina, noted that there was a delay between the audio and the visual and urged the staff to think environmentally regarding plastic grass. She continued to provide her thoughts on the flow of the river and the river project. Page 1 l l l PuBuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the ntinutes of March 9, 2020. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) COVID-19 Related Budgetary Guidance. Michael Schrage, City Manager, explained the possible financial ramifications, revenue sources impacted, the 2020 Smoky Hill River Festival, baseball and softball project, fiscal impact and action options. Debbie Pack, Director of Finance & Administration, presented a financial overview. Michael Schrage, City Manager, provided additional information on the suggested direction to be provided by the City Commission to the City Manager. Commissioner Franz provided his thoughts on the significant impacts and the need to look 6 months to a year out along with need to coordinate with the entities that use the transient guest tax funds. Michael Schrage, City Manager, stated that staff was looking at the transient guest tax significantly. Commissioner Franz continued to provide his thoughts on the potential impact on the finances. Mayor Hoppock stated this was the first of many discussions on this topic but needed to make some decisions and then need to revisit the topic. Mayor Hoppock asked if any of the stimulus dollars were going to flow down to the local governments. Mr. Schrage stated staff spent time on the Families First Coronovirus Response Act that will be discussed later and stated he did not know how the money would land for the stimulus package. Mayor Hoppock provided information on the potential impact of the stimulus plan to the various states and communities. Commissioner Davis stated he had received an email from the National League of Cities regarding the stimulus plan and the size of communities that may receive funds. Commissioner Hodges provided her thoughts on the impact of sales tax and asked if there was a figure in ntind to budget to at this time for the general fund expenditures. Ms. Pack stated the original budget for the general fund expenditures was $43.9 million dollars. Commissioner Hodges asked what the reduction would need to look like. Ms. Pack stated the reduction would need to be $2.8 million dollars for a total of $41.1 million dollars. Commissioner Hodges asked if staff could provide a list of contracts and projects that staff was looking to postpone or hold. Mr. Schrage stated if there was a general consensus from the Governing Body, staff could put together the list. Page2 L l l Commissioner Hodges provided her thoughts on the reducing discretionary expenditures. Mr. Schrage stated the conversation had been on the effects to the employees of the organization to now the budgetary ramifications. Commissioner Ryan provided his thoughts on the possible financial ramifications and the need to provide staff with the tools needed and would like to further discuss the river festival and the baseball project. Commissioner Davis provided information regarding the impact of the COVID-19 on the community and the need to look at the sales tax and transient guest tax. He continued to state he was in favor of the discretionary spending, capital improvements and contracts and bids awarded but not yet commenced but was only in favor of projects and services currently underway but not completed. Mayor Hoppock stated the Governing Body needed a list of the capital improvements and contracts to look at. A conversation ensued between the City Commission, Mr. Schrage and Ms. Pack regarding the information to be provided to the Governing Body. Commissioner Hodges asked if the surplus money for dues paid would be transferred to the general fund. Ms. Pack stated there was a set amount that would be transferred into the general fund. Commissioner Hodges asked if staff could provide a list of those transfers. Ms. Pack stated yes. Commissioner Hodges asked if two (2) payments were made for the STAR Bonds. Ms. Pack stated yes, April and December each year. Commissioner Hodges asked if there was enough money to pay for the April and December payments for 2020. Ms. Pack stated yes and explained where the money comes from. Commissioner Ryan asked if there was a way to shift the money out of the street spending. Ms. Pack stated that staff had reviewed the projects dedicated for the street fund and there was approximately $2 million dollars that could be saved. Commissioner Hodges provided her thoughts on the South Wellfield project and asked if the project could be pushed out as far as we could. Mr. Schrage stated that staff had revisited contracts and the river festival and staff would need time to compile the list and bring it back to the City Commission. Commissioner Ryan stated the South Wellfield was paid for from user fees, correct. Mr. Schrage stated yes. Commissioner Ryan provided his thoughts on the projects utilizing user fees. Mayor Hoppock asked if we could go through the list, starting at the bottom of page 2. Mr. Schrage stated that staff didn't want to complete all of the work but wanted direction from the Governing Body. Commissioner Ryan stated that some of the discretion could fall on the City Manager to make the decisions since he would know best. Mayor Hoppock stated he did not think that it should be laid on the City Manager. Commissioner Davis asked if we planned a meeting next week. Mr. Schrage stated that he was going to ask about holding a meeting next week. A conversation ensued between the City Commission and Mr. Schrage regarding a meeting Page3 l l l z 0.. w next week and budgetary discussions. Commissioner Hodges asked if each director had the discretion to spend up to $20,000. Mr. Schrage stated that the directors did have the authority based on his authority. Commissioner Hodges stated the potential need to limit the spending of the directors and have it reviewed by the City Manager or someone else. She continued to state she was willing to meet more often if necessary. Mr. Schrage stated that generally spending authority was broadened and not limited in situations like this. He continued to state public safety expenditures, water and sewer, and computer technology. Commissioner Ryan asked if an expansion of spending authority would be beneficial for the City Manager. Mr. Schrage stated there was an added agenda item that he could cover later in the meeting. Mr. Schrage stated that staff could provide a higher level of detail on discretionary spending and no new contracts and no new expenditures. Mayor Hoppock stated we would first talk about the cancellation of the 2020 River Festival. Brad Anderson, Director of Arts & Humanities, provided information on the recommendation of the cancellation of the Smoky Hill River Festival. Commissioner Ryan wanted to say he was sorry and stated he did not disagree with his decision and asked if some type of event could happen in the park or a fallback if there was an opportunity to do so. Mr. Anderson stated if time and resources would allow for some type of event at a later time when people were allowed to gather, the Arts and Humanities staff would be ready. Commissioner Hodges thanked Mr. Anderson for his hard work and making the recommendation on behalf of the citizens. Mr. Schrage thanked Mr. Anderson for his leadership. Mayor Hoppock also thanked Mr. Anderson for his leadership. 20-0088 Moved by Commissioner Davis, seconded by Commissioner Hodges, to accept the Arts & Humanities Commission recommendation to cancel the 2020 Smoky Hill River Festival. Aye: (5). Nay: (0). Motion carried. Mr. Schrage provided information regarding the baseball and softball project and the use of transient guest tax funds for the project. Commissioner Davis provided his thoughts on the postponement of the project Commissioner Hodges asked if the transient guest tax receipts are received two (2) months in arrears like sales tax. Ms. Pack stated that information was received quarterly so we would not know that information until about July. Commissioner Hodges provided her thoughts on the project and thought a 6 month postponement timeframe was best. Commissioner Ryan provided his thoughts on the postponement timeframe of the project. Commissioner Franz stated he would see the postponement timeframe of the project as 90 days. Mayor Hoppock stated he was thinking about a 90 day postponement timeframe. Page4 l 2().-0089 Moved by Commissioner Franz, seconded by Commissioner Davis, to postpone further consideration of the East Crawford Recreation Area and Bill Burke Baseball & Softball Improvements Project for 90 days at which time we would reevaluate how to proceed. Aye: (5). Nay: (0). Motion carried. L l 20-0090 Mr. Schrage stated that he did not have much information that he could additionally provide on the River Renewal Project, other than it was currently in the design phase. Commissioner Davis asked at what time a decision need to be made on the project. Ms. Pack stated there was still final design to occur on the project in later 2020. Mayor Hoppock asked if there was still funding from the Corp of Engineers. Mr. Schrage stated that it was a core piece of the project and there would need to be conversations regarding the project and he did not have a good timeframe to give the Governing Body. Ms. Pack stated the portion of the Corp of Engineers work was late in the project process sometime next year. Commissioner Ryan asked if postponing our design would postpone the Corp of Engineers portion. Ms. Pack stated from her understanding our design portion was separate from the Corp of Engineers portion of the project. Jane Anderson, Salina, stated the Corp of Engineers would not make a decision until January 2021 and provided her thoughts on the project status and potential postponement. Moved by Commissioner Hodges, seconded by Commissioner Franz, to postpone new commitments or expenses associated with the River Renewal Project for a period of 90 days, while maintaining or support for the project going forward. Commissioner Davis stated he would like to keep the item on the same schedule as the baseball project. Mr. Schrage stated that if the project was put out to December, staff may be visiting it sooner. He stated the postponement could be for 90 days and may have to be postpone again in the future. Mayor Hoppock called the question. Aye: (5). Nay: (0). Motion carried. Mr. Schrage provided an update on the proposed wastewater treatment plant upgrades. Commissioner Hodges asked when the improvements needs to be completed. Mr. Schrage stated the improvements would need to be completed within the 5 year period. He stated that staff recommended a 90 day postponement Commissioner Hodges stated that this project was a mandatory project and the other projects were discretionary. 20-0091 Moved by Commissioner Ryan, seconded by Commissioner Davis, to postpone new commitments or expenses associated with proposed wastewater treatment plant upgrades for a period of 90 days. Aye: (5). Nay: (0). Motion carried. (7.2) General Obligation Bonds and Temporary Notes. (7.2a) Resolution No. 20-7814 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.2b) First reading Ordinance No. 20-11029 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2020-A. Page 5 l l l "' "' z ll. w .. c ~ i i 20-0092 (7.2c) Resolution No. 20-7820 authorizing the offering for public sale of General Obligation Refunding Bonds. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Michael Schrage, City Manager, stated that existing commitments were projects that contracts were executed, work had been completed and payment needed to be made. David Arteberry, Stifel Financial Group, provided an update on the bond market. Mayor Hoppock asked what the contingencies were. Mr. Arteberry stated it could be possible to renew the temporary notes and stated he had been in contact with the bank that currently held the notes that would be willing to renew the notes or find a bank within the state that would be willing to take on the renewal of the notes. Commissioner Hodges asked if there had been any bond sales across the State that would show the type of scenario we were facing. Mr. Arteberry stated the City of Shawnee, Kansas sold a bond issue on Monday for $4.9 million dollars and received three (3) bids with an interest rate of 2.5%. Commissioner Hodges asked if there was a bond rating call this week. Mr. Schrage stated there was a prep call but the bond rating call was scheduled for tomorrow. Commissioner Hodges asked for the status of the special assessment projects. Ms. Pack stated one development was to construct yet this year and the other one would be early next year. She also stated the City of Salina had made a commitment to the developer through the development agreement to reimburse the expenses. Mr. Schrage stated that staff had a conversation with bond counsel regarding the developments but had not had the conversation with the developers yet but plan to do so before we go to market. Mayor Hoppock stated those would not be an obligation of the City of Salina but only if the developer would default they would be an obligation of the City of Salina. Mr. Schrage stated that was correct. Commissioner Franz mentioned the Ninth Street Bridge under existing commitments and new funding and asked if the existing commitment was for design and if the decision was to not proceed, there would be a design available to proceed in the future. Ms. Pack stated that was correct, the department anticipated bidding the project in the fall of 2020 so the delay would not impact the project from its original intent. Commissioner Franz stated the resource for the Police Training Center funding was sales tax and asked if that was a commitment to utilize those funds. Ms. Pack stated that the source of debt payment was not listed on the resolutions or ordinances but was a decision of the City of Salina. Commissioner Hodges provided her thoughts on the special assessment developments. Mr. Schrage stated that staff was committed to having those conversations with the developers. Moved by Commissioner Davis, seconded by Commissioner Franz, to adopt Resolution No. 20- 7814 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds in a maximum amount of $7,335,165 with issuance costs. Aye: (4). Nay: (1) Hodges. Motion carried. Ms. Pack provided information related to the bond issuance. Mr. Arteberry noted the maximum cost for the temporary notes and potential need to amend the motion. Page6 l l 20-0094 l Commissioner Davis asked if the yearly cost was higher than the temporary note due to the 5 year term for the landfill cell. Ms. Pack stated yes. Mr. Schrage stated staff was trying to sync the project with the life of the cell. Moved by Commissioner Hodges, seconded by Commissioner Davis, to pass Ordinance No. 20- 11029 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2020-A on first reading. Aye: (5). Nay: (0). Motion carried. Ms. Pack stated that staff's recommendation was to not act on that item and if the City Commission was in agreement, no motion was necessary. The City Commission recessed at 6:45 p.m. for a 5 minute break. The meeting resumed at 6:54p.m. (7.3) Award contract for the abatement (removal) of nuisances related to property maintenance for properties within the city limits of Salina for a period of April 1, 2020 through March 31, 2021. Lauren Driscoll, Director of Community & Development Services, explained the nuisance abatement process, bids received, fiscal impact and action options. Michael Schrage, City Manager, provided information regarding the option to award the contract to other contracts but the low bid. Commissioner Davis asked if United Field Services offered a plan on how they would be responsive to providing the service from over 100 miles away and how they would be providing the equipment needed. Ms. Driscoll stated United Field Services was not very responsive in responding to questions asked by staff. She continued to state that staff had contacted references of the company. Mayor Hoppock stated the costs would not necessarily be costs of the City of Salina but would be added to the property taxes of the property owner affected. Commissioner Franz stated he was concerned about the equipment availability and if sub- contractors could sub the work out to another contractor. Ms. Driscoll stated staff recommended Loux Home Repair and staff would amend the bid document to ask more questions to obtain the information necessary. Commissioner Franz asked if the typical cost for an abatement was $125.00 Ms. Driscoll stated yes for an average lot. Mr. Schrage stated there was an administrative fee on top of it as well. Commissioner Davis asked if the cost was recouped from the property owners and how much was recouped. Ms. Driscoll stated that she did not have that information available but could provide it. Mayor Hoppock stated the abatement costs were recouped at some point. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to award the nuisance abatement contract to Loux Home Repair for the amounts indicated in the bid tabulation summary and the contract documents for the period of April 1, 2020 through March 31, 2021, and authorize the Mayor to sign the contract for services. Aye: (5). Nay: (0). Motiol) carried. (7.4) Resolution No. 20-7822 authorizing temporary COVID-19 related Personnel Manual Updates. Page7 l l L "' "' z IL w • c '; "? I s Michael Schrage, City Manager, explained the Families First Coronavirus Response Act, guidance from Department of Labor, temporary amendments, fiscal impact and action options. Commissioner Davis stated other than emergency sick leave, most of the leave would be full pay as long as the employees were using hours they already accrued. Mr. Schrage stated yes, if the employee was eligible to use City of Salina accrued leave at their hourly rate, whatever amount was used would be paid in full. Commissioner Davis asked if the employee would need to ask for the extended leave before their accrued leave was used. Mr. Schrage stated that an employee could request extended leave to cover the remaining hours to earn a full paycheck. Commissioner Davis asked if employees that were on call received pay. Natalie Fischer, Director of Human Resources, stated there were very few employees that were on an on- call basis. She continued to explain the variations of staff working after hours. Mayor Hoppock asked how leave was calculated for the Fire Department that worked different shifts. Ms. Fischer stated that staff would need to look at how the leave would be handled for the Fire Department based on the direction the City Commission would like to go. Ms. Fischer provided additional information on the act and the guidelines of the act. Mayor Hoppock asked if an employee would understand this. Ms. Fischer stated probably not. Mr. Schrage stated that he had noticed some administrators that told employees that they would get paid regardless. He noted that he had not done that yet. He continued to state that his hope was to communicate to them that the act was in place and will work with the employees on the provisions. Mayor Hoppock asked if some employees have had impacts with child care with school closing. Ms. Fischer stated that about 15 employees at most were impacted last week and there could be a potential that number may increase. Commissioner Hodges asked about the level of leave available to the employees. Mr. Schrage stated that we had to offset the 2/3 provision by allowing additional leave at the full rate to come to a full paycheck. A conversation ensued between the City Commission and Mr. Schrage regarding the extended leave. Commissioner Hodges stated that the municipality was not expecting repayment for the use of hours under the act. Mr. Schrage stated correct and the amount was capped at the dollar amount that the act provided. Commissioner Hodges asked if we were going to pay the employees for the hours the employee would work anyway, then why can't we take the other step and just pay the employee for the full time. Mr. Schrage stated there were so many instances that an employee would need to elect what they would like to do. A conversation ensued between the City Commission, Mr. Schrage, Greg Bengtson, City Attorney, and Ms. Fischer regarding the leave advancement and compliance of the act. Commissioner Davis asked if companies under 500 employees were captured under this. Mr. Schrage stated companies in excess of 500 employees were not covered. Mr. Schrage stated the act created additional banks of leave that we do not have in the system that we Page 8 L L z 0.. w .. c ~ ~ I 20-0095 L are obligated to provide to the employee. Commissioner Davis asked what type of credit the City would receive. Mr. Bengtson stated it was a credit against payroll tax. Commissioner Franz provided a scenario on the various leaves available. A conversation ensued between Commissioner Franz, Ms. Fischer and Mr. Schrage regarding the scenarios of leave . Commissioner Franz asked why $200 a day was $25 per hour, and $300 a day was $37.50 per hour. Mr. Schrage stated an employee would be limited to $200 a day. Commissioner Franz asked if the Emergency Family Medical Leave was handled similar to Family Medical Leave Act. Mr. Schrage stated the Emergency Family Medical Leave was an extension of paid leave. Mayor Hoppock asked if staff would be able to account for this. Ms. Fischer stated staff was looking at other software systems to track leave forms and processing the leave. Commissioner Hodges asked if there had been a thought to allow for work from home or flexible schedule directives. Mr. Schrage stated there had been conversatiqns but his concern was essential versus non-essential and if a stay-in place order was put in place. He continued to state that staff had to stay focused on if it was essential or needed right now. Ms. Fischer stated work for department heads was to determine what work could be offered to employees that did not have the needs to work from home. Commissioner Davis asked if those individuals were ones who had children that were home to take care of and would generally be in school and would be working their full schedule. Mr. Schrage stated correct but what he was referring to were people that were on emergency paid sick leave because of the stay-at-home order. Commissioner Davis asked what the reduced leave would be to where an employee could still get their benefits. Ms. Fischer stated the City had been pretty liberal in the past for employees that were on leave to receive benefits. She continued to state the personnel manual stated a full time employee was 40 hours a week and a classified part-time employee was 25 to 30 hours a week. Commissioner Hodges asked if the leave would cover both essential and non-essential personnel. Ms. Schrage stated yes. Mr. Schrage continued to provide information on the use of leave for a non-essential employee. A conversation ensued between the City Commission and Mr. Schrage regarding the components of the resolution. Mr. Bengtson stated in Section 1 of the resolution, possibly adding "or the equivalent for employees who work other than the 40 hours per week work schedule" after 110 hours. A conversation ensued between the City Commission, Mr. Schrage, Mr. Bengtson, and Ms. Fischer regarding the language to add to the resolution. Moved by Commissioner Hodges, seconded by Commissioner Davis, to adopt Resolution No. 20- 7822 addressing personnel measures in response to the COVID-19 Public Health Emergency adding under Section 1 -CM authorized to grant up to 110 hours or the equivalent for employees who work other than 40 hours per week work schedule. Page9 l l l Mr. Bengtson stated the need to make a few non-substantive changes to the resolution in Sections 9-12. Mayor Hoppock called the question. Aye: (5). Nay: (0). Motion carried. (7.5) Follow-up discussion and explanation for the change in the Downtown Streetscape Project related to the License Agreement for sidewalk dining with Lighthouse Properties ill, Inc. at Starbucks on the comer of Mulberry and Santa Fe approved by the City Commission on March 9, 2020. Jim Kowach, Director of Public Works, explained the streetscape project, project plans, location of flower bed, impact to sidewalk dining area, fiscal impact, and action options. Michael Schrage, City Manager, provided information on the size of contingency on a $11 million dollar project, the decision by staff, and the work performed by staff. Commissioner Davis stated it was a non-issue for him. Commissioner Hodges stated she noticed a pattern of behavior where commissioners asked questions and asked if the hotel was going to be able to open on April 1, 2020 and if another extension was needed. Mr. Schrage stated he did not think they would be open by April 1 but would be within the 90 day window. Commissioner Franz noted his original question on March 9th but noted that a picture was submitted to him had part of the planter box missing so he questioned it. He also stated that just because a question was asked did not mean that a staff person had to have an answer. Mr. Kowach wanted to thank Commissioner Franz for noticing it and notifying staff and it minimized the additional cost that would have occurred if staff was not notified. Mayor Hoppock provided his thoughts on the request. Mr. Schrage thanked the Governing Body and acknowledged that staff tried their best to be light on their feet to respond to questions asked. Mr. Kowach apologized to the Governing Body and City Manager. 20-0096 Moved by Commissioner Ryan, seconded by Commissioner Franz, to approve use of project funds to pay for the additional $1,000.00 for relocation of the planter in conflict with the sidewalk dining request and license agreement granted 3/9/2020. Aye: (5). Nay: (0). Motion carried. (7.6) Resolution No. 20-7823 granting additional temporary authority to the City Manager related to COVID-19 response. Michael Schrage, City Manager, explained the request, temporary authority, and action options. Mayor Hoppock asked if there was a requirement for the citizen's boards and committees to meet. Mr. Schrage stated that he could touch on that under the next agenda item. Commissioner Davis asked if there was a limit to the City Manager's emergency spending authority. Mr. Schrage stated it would truly need to be an emergency that was imminent and if he could bring it to the Governing Body he preferred to do so. Commissioner Franz stated that he did not think there was a spending limit for the Page 10 l L L f w t 20-0ci7 B emergency spending. Commissioner Franz asked if the golf course was open. Mr. Schrage stated on a limited schedule. Commissioner Franz asked what Tony's Pizza Events Center operations were. Mr. Schrage stated they were following the CDC guidelines and had cancelled most events or were working on rescheduling those. Mr. Schrage provided information on the necessity to close the recycling center. Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 20- 7823 temporarily expanding the authority of the City Manager to act on behalf of the City in response to the COVID-19 emergency, and ratifying previous decisions regarding the COVID-19 Emergency. Aye: (5). Nay: (0). Motion carried. (7.7) Resolution No. 20-7784 cancelling meetings of certain City of Salina, Kansas subordinate boards, committees, and commissions in response to the COVID-19 Public Health Emergency and the Governor's Executive Order No. 20-14. Michael Schrage, City Manager, explained the request for a temporary suspension of meetings, and action options. Commissioner Ryan asked if the Board of Zoning Appeals had an item that had no other option but to go to district court, could the board meet. Mr. Schrage stated he would use discretion based on the information available. Greg Bengtson, City Attorney, stated part of the structure of the resolution was based upon direction of the Governor's Executive Order pertaining to the timeframe the resolution was in effect. Commissioner Hodges thanked staff for keeping an eye on the judicial boards and the applications submitted. 20-0098 Moved by Commissioner Ryan, seconded by Commissioner Davis, to adopting Resolution No. 20- 7784 cancelling meetings of certain City of Salina, Kansas subordinate boards, committees, and commissions in response to the COVID-19 Public Health Emergency and the Governor's Executive Order No. 20-14. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTHER BUSINESS Commissioner Davis noted that Robby's Cheesecake was still open and through all of this, he was still giving out free lunch sacks to citizens. He also encouraged citizens to help others. Commissioner Ryan asked if legal counsel was still working on a lease for the Expo Center. Michael Schrage, City Manager, stated that he had pulled the City Attorney in a lot of directions lately. Greg Bengtson, City Attorney, stated he had a conversation with Mr. Schrage providing additional information and he was hoping that would be back to the top of his list tomorrow .. ADJOURNMENT Page 11 l 20-0099 l l "' "' ~ w Moved by Commissioner Ryan, seconded by Commissioner Davis, that the special meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 9:27 p.m. [SEAL] ATIEST: ~w~ Shandi Wicks, CMC, City Oerk Page 12 RESOLUTION NO. 20-7814 RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL -OBLIGATION BONDS, SERIES 2020-A, AND GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2020-1, OF THE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously authorized certain internal improvements described as follows (collectively, the "Note Improvements"): Estimated Ordinance/ Improvement Proiect Description Resolution No. Authority Fund Deoosit* Ord. 02-10071; North 9111 Street Bridge Res No. 19-7677 K.S.A. 12-685 et seq. 2,000,000.00 Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. l 2-6a0 l el seq. 530,165.28 Article 12, §5 ofthe Constitution of the State of Smoky Hill River Renewal Ord. 17-10885 Kansas 1,800,000.00 Police Training Facility Res. 19-7743 K.S.A. 12-1736 5,900,000.00 Stone Lake 2 K.S.A. 12-6a01 et seq. 405,000.00 Total: $10,635,165.28 *Excludes costs of issuance and interest on any temporary financing. WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds to pay a portion of the costs of the Note Improvements; and -WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its obligations incurred in constructing the Note Improvements prior to the completion thereof and the issuance of the Issuer's general obligation bonds, and it is desirable and in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer; and WHEREAS, the Issuer has previously authorized certain internal improvements described as follows (collectively, the "Bond Improvements," and together with the Note Improvements, the "Improvements"): Estimated Ordinance/ Improvement Project Description Resolution No. Authority Fund Deoosit* Article 12, §5 of the Smoky Hill River Constitution of the State of Renewal Ord. 17-10885 Kansas $2,300,000.00 Police Parking Res. 19-7679 K.S.A. 12-1736 et seq. 275,000.00 Golf Irrigation Res. 19-7678 Charter Ordinance No. 39 500,000.00 Landfill Cell #20 Res. 19-7672 K.S.A. 12-2101 et seq. 2,315,000.00 Total: $5,390,000.00 *Excludes costs of issuance and interest on any temporary financing. WHEREAS, the Issuer desires to issue its general obligation bonds in order to pennanently finance a -portion of the costs of such Bond Improvements and to retire a portion of the following temporary notes of the Issuer, which were issued to temporarily finance a portion of the costs of the Improvements (the "Refunded Notes"): - - - Dated Maturity/Redemption Original Series Date Date Amount 2019-1 Aoril 24, 2019 May 1, 2020 $6,085,000 2019-2 October 15, 2019 May 1, 2020 5,085,000 ; and WHEREAS, the Issuer has selected the firm of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri ("Financial Advisor"), as financial advisor for one or more series of municipal temporary notes and one or more series of general obligation bonds of the Issuer, to be issued in order to provide funds to pay the costs of the Improvements; and WHEREAS, the Issuer desires to authorize the Financial Advisor to proceed with the offering for sale of said general obligation bonds and general obligation temporary notes and related activities; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation bonds and general obligation temporary notes; and WHEREAS, the Issuer desires to authorize the Financial Advisor and Gilmore & Bell, P.C., Kansas City, Missouri, the Issuer's bond counsel ("Bond Counsel"), in conjunction with the Clerk, and other officers and representatives of the Issuer to proceed with the preparation and distribution of a preliminary official statement and notice of sale and to authorize the distribution thereof and all other preliminary action necessary to sell said general obligation bonds and general obligation temporary notes. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Issuer is hereby authorized to offer for sale the Issuer's General Obligation Bonds, Series 2020-A (the "Bonds"), and General Obligation Temporary Notes, Series 2020-1 (the "Notes," and together with the Bonds, the "Obligations") described in the Notice of Sale, which is to be prepared by Bond Counsel in conjunction with the Financial Advisor and representatives of the Issuer, as authorized below. Section 2. The Mayor and Clerk, in conjunction with the Financial Advisor and Bond Counsel, are hereby authorized to cause to be prepared, if necessary, a Preliminary Official Statement, and such officials and other representatives of the Issuer are hereby authorized to use such document in connection with the sale of the Obligations. Section 3. The Clerk, in conjunction with the Financial Advisor and Bond Counsel, is hereby authorized and directed, if necessary, to give notice of said bond sale by publishing a summary of the Notice of Sale not less than 6 days before the date of the bond sale in a newspaper of general circulation in Saline County, Kansas, and the Kansas Register and is hereby authorized to distribute copies of the Notice of Sale and Preliminary Official Statement relating to the Obligations to prospective purchasers of the Obligations. Bids for the purchase of the Obligations shall be submitted upon the terms and conditions set forth in said Notice of Sale, and shall be delivered to the governing body at its meeting to be held on the date of such sale, at which meeting the governing body shall review such bids and shall award the sale of the Obligations or reject all bids for a particular series of the Obligations. Section 4. For the purpose of enabling the purchaser(s) of the Obligations (the "Purchaser(s)") to comply with the requirements of Rule I 5c2-12 of the Securities and Exchange Commission (the "Rule"), the Mayor, Clerk, City Manager, Finance Director, or other appropriate officers of the Issuer arc hereby authorized, if necessary: (a) to approve the form of said Preliminary Official Statement and to execute the "Certificate - - - Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preliminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and {c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser(s) to comply with the requirement of the Rule. Section 5. If necessary, the Issuer agrees to provide to the Purchaser(s) within seven business days of the date of the sale of the Obligations or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchaser(s), whichever is earlier, sufficient copies of the final Official Statement to enable the Purchaser(s) to comply with the requirements of the Rule and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. Section 6. The Mayor, Clerk, City Manager, Finance Director and the other officers and representatives of the Issuer, the Financial Advisor and Bond Counsel, are hereby authorized and directed to take such other action as may be necessary to: (a) carry out the sale of the Obligations, including providing for the sale of all or a portion of the Obligations through a private placement of such Obligations; and (b) make provision for payment and/or redemption of the Refunded Notes from proceeds of the Obligations. Any sale of the Obligations shall be subject to further approval by the governing body. Section 7. This Resolution shall be in full force and effect from and after its adoption. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ADOPTED by the governing body on March 25, 2020. - (SEAL) ATIEST: Shandi Wicks, CMC, City Clerk - - (Signature Page to Sale Resolution) - - - To: EXHIBIT A CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL March_, 2020 Re: General Obligation Bonds, Series 2020-A; General Obligation Temporary Notes, Series 2020- 1 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule 1 Sc2-12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: Title: Finance Director NOTICE OF SALE CITY OF SALINA, KANSAS $7,080,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 $5,250,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Email and electronic (as explained below) bids for the purchase of the General Obligation Temporary Notes, Series 2020-1 (the "Notes") and General Obligation Internal Improvement Bonds, Series 2020-A (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Financial Advisor on APRIL 13, 2020 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2020-1 Notes Series 2020-A Bonds SUBMITTAL HOUR (Central Time) 1:00 p.m. 1:00 p.m. Bids may only be submitted via PARITY®, or via email to the Municipal Advisor at arteberryd@stifel.com. Fax bids and hand-delivered written bids will not be accepted. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on one or both series of the Obligations. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of$5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated April 29, 2020 (the "Dated Date"), and will become due on May 1, 2021. The Notes will bear interest from the Dated Date at rates to be determined when the Notes are sold as hereinafter provided, which interest will be payable at maturity. Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Notes, depending on the purchase price bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rate bid as a result of any changes made to the principal amount of the Notes as described herein. If there is an increase or decrease in the final aggregate principal amount of the Notes as described above, the Issuer will notify the Successful Bidder by means of telephone or email, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The actual purchase price for the Notes shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Notes, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of and interest on each Note will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Such amounts will be payable to the Registered Owner of such Note as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Notes, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Note Registration. The Notes will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Redemption of Notes Prior to Maturity. General Whenever the Issuer is to select Notes for the purpose of redemption, it will, in the case ofNotes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on November 1, 2020, and thereafter, as a whole at any time or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Notice and Effect of Call/or Redemption. Unless waived by any owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Note shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101to10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvement projects and to pay costs associated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated April 29, 2020 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount* Year Amount* 2021 $520,000 2029 $230,000 2022 600,000 2030 235,000 2023 615,000 2031 210,000 2024 630,000 2032 220,000 2025 645,000 2033 225,000 2026 205,000 2034 235,000 2027 215,000 2035 240,000 2028 225,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2021 (the "Interest Payment Dates"). Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rates bid as a result of any changes made to the principal amount of the Bonds or the schedule of principal payments as described herein. If there is an increase or decrease in the final aggregate principal amount of the Bonds or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder by means of telephone or email, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The net production as a percentage of the principal amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change to the total principal amount of the Bonds or the schedule of principal payments described herein. Notwithstanding the requirements of the section entitled "Establishment of •Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. Issue Price," ifrequested by the Financial Advisor, the Successful Bidder shall within 20 minutes of such request provide the Financial Advisor with the initial offering prices of the Bonds to the public so as to allow for proper resizing of the Bonds. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Registered Owners. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose of redemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, if less than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2028, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2027, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITY®. Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Bonds. The Bonds are being issued pursuant to K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A.12-1736 et seq, K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the Issuer, Article 12 Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and an ordinance and a resolution adopted by the Governing Body (collectively the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvement projects (the "Improvements"), to pay the costs associated with the issuance of the Bonds and retire a portion of the Issuer's outstanding general obligation temporary notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE OBLIGATIONS Book-Entry-Only System. The Depository Trust Company, New York, New York ("OTC"), will act as securities depository for the Obligations. The Obligations will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of OTC and no beneficial owner will receive certificates representing their interests in the Obligations. During the term of the Obligations, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Obligations to OTC or its nominee as the Registered Owner of the Obligations, OTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Obligations to its participants who shall be responsible for transmitting payments to beneficial owners of the Obligations in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by OTC, its participants or persons acting through such participants. In the event that: (a) OTC determines not to continue to act as securities depository for the Obligations, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Obligations would adversely affect the interests of the beneficial owners of the Obligations, the Issuer will discontinue the book-entry-only form of registration with OTC. If the Issuer fails to identify another qualified securities depository to replace OTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system ofregistration of the Obligations and OTC. Submission of Bids. Email bids shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2020-1" or "Proposal for General Obligation Internal Improvement Bonds, Series 2020-A," as applicable. Electronic bids via PARITv® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. Any bid submitted shall include the initial offering prices to the public for each maturity of the Bonds. If provisions of this Notice of Sale conflict with those of PARITY®, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date. The Issuer shall not be responsible for failure of transmission of any bid. Any bidder desiring to have the Financial Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Financial Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PARIT¥® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 and from the following website: www.newissuehome.i-deal.com. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) the interest rate may not exceed 3.60%; (c) no supplemental interest payments will be considered; (d) the interest rate specified shall be a multiple of 1/100 or 1/8 of I%; and (e) the interest rate shall not be zero (0%) percent. No bid for less than 99.50% of the principal amount of the Notes, and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder and the net interest cost (expressed in dollars) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes, it will provide the certification as to initial offering price described under the caption "Establishment of Issue Price" in this Notice. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 3 .60%; ( c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/20 or 1/8 of I%; (e) no zero (0%) percent interest rates will be permitted; and (f) the maximum difference between the high and low interest rates shall not exceed four percent (3 .00%). No bid for less than 100.00% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid . Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment of Issue Price" in this Notice. Good Faith Deposit. All Obligations: The Successful Bidder(s) must supply a good faith deposit (the "Deposit") in the amount of 2.00% of the principal amount of the of each respective Obligation as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder(s) to comply with the terms of its bid. The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder(s) have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder(s) or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder(s) in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder(s). If the Successful Bidder(s) default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: Subject to the timely receipt of the Deposit as set forth above, the award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, if any, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders are requested to supply an estimate of the TIC for the Obligations on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Financial Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidders' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a purchase agreement between the Issuer and the Successful Bidder(s) for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Obligations herein offered for sale. Such application and ratings are further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations, and will not pay the premium in connection with any policy of municipal bond insurance desired by the Successful Bidder(s). In the event a bidder desires to purchase and pay all costs associated with the issuance of a policy of municipal bond insurance in connection with the Obligations, a commitment from the selected insurer must be attached to such bidder's Official Bid Form, and shall specify all terms and conditions to which the Issuer will be required to agree in connection with the issuance of such insurance policy. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder(s) elect to purchase the Obligations with municipal bond insurance, certain rating agencies will assign their ratings to the Obligations with the understanding that upon delivery of the Obligations, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy after the award of the Obligations shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Obligations. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. The Financial Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CUSIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about APRIL 29, 2020 (the "Closing Date"), to DTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name ofDTC. Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Obligations and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each an "Issue Price Certificate") containing the following for the Notes or for each maturity of the Bonds: (1) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Obligations for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Obligations for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Financial Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Obligations pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Obligations from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and (4) the Issuer anticipates awarding the sale of the Obligations, as applicable, to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Obligations as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms ( 1) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Obligations, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Obligations and (2) that it has an established industry reputation for underwriting municipal securities such as the Obligations. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within 20 minutes of a request by the Issuer, the Successful Bidder(s) shall advise the Issuer if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for the Obligations. If the Successful Bidder(s) do not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price for the Obligations submitted in the bid of the Successful Bidder(s). After the Closing Time, the Successful Bidder(s) agree to provide to the Issuer all reasonably requested information related to establishing the issue price of the Obligations if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated April 7, 2020, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Financial Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder(s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32 (collectively, the "Rules"). Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2019 is $509,082,680. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold, is $71,040,000, including general obligation notes to be issued simultaneously with the Bonds but excluding general obligation notes to be repaid with the proceeds of the Obligations and other available funds. Electronic Transactions. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed by electronic transmission. Copies, telecopies, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Obligations. Additional Information. Additional information regarding the Obligations may be obtained from the undersigned or from the Financial Advisor at the addresses set forth below: DATED: April 7, 2020. Email Bid and Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67402 Phone No.: (785) 309-5735 Email: debbie.pack@salina.org Financial Advisor: Stifel, Nicolaus & Company, Incorporated 4801 Main Street, Suite 530 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 203-8733 Email: arteberryd@stifel.com CITY OF SALINA, KANSAS By: Shandi Wicks, Clerk TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 April 13. 2020 For $7 ,080,000' principal amount of General Obligation Temporary Notes, Series 2020-1, of the City of Salina, Kansas, to be dated April 29, 2020, as described m the Notice of Sale (the "Notice") dated April 7, 2020, said Notes to bear interest as follows: Maturity Mayl 2021 Principal Amount' $7,080,000 Interest Rate ____ % *Sub1ect to change; see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued interest to the date of delivery. Principal Amount ................................................................................................................................. $7,080,000.00' Less Discount (not to exceed 0.50%) ........................................................................................... '-----------' Plus Premium (if any) ................................................................................................................ ···--------- Total Purchase Price .......................................................................................................................... $ ________ _ Total interest cost to maturity at the rates specified...... ...... .. ... ............ ........ .. ......... . .................. $ ________ _ Net interest cost ......................................................................................................................... $ ________ _ D The Bidder elects to purchase Municipal Bond Insurance from· [Assured] [AGM] [BAM],_[ ____ _,]. Circle one or complete blank This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained m the Notice. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed by electronic transmission. Copies, telecopies, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or smt in the appropriate court of law. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by:--------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City ofSalma, Kansas, the above proposal is hereby accepted on April 13, 2020. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Email bids may be sent to the Financial Advisor at arteberryd@stifel.com or electronic bids may be submitted via PARITY®, at or prior to 1 :00 p.m., Central Time, on April 13, 2020. Any bid received after such time will not be considered. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Apnl 13, 2020 For $5,250,000* principal amount of General Obligation Internal Improvement Bonds, Series 2020-A, of the City of Salina, Kansas, to be dated April 29, 2020, as described in the Notice of Sale (the "Notice") dated April 7, 2020, said Bonds to bear interest as follows: Maturity Principal Maturity Principal October 1 Amount" Interest Rate October 1 Amount" Interest Rate 2021 $520,000 % 2029 $230,000 % 2022 600,000 % 2030 235,000 % 2023 615,000 % 2031 210,000 % 2024 630,000 % 2032 220,000 % 2025 645,000 % 2033 225,000 % 2026 205,000 % 2034 235,000 % 2027 215,000 % 2035 240,000 % 2028 225,000 % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Bonds, plus a premium as set forth below. plus accrued interest to the date of delivery. Principal Amount .... .............. . ... ..... ............ ...... .. .. ........ .... ... .. .......... .. ....... .. ...... .. .... .. ....... . . $5,250,000.00' Plus Premium (if any) . . . . . . . .. .. . . . . . . .. . .. . . . .. . . .. . . . . . . . . . . . . . . .. .. .. . . . .. . . . . ................ . Total Purchase Price ........................................................................................................... $ _________ _ Total interest cost to maturity at the rates specified ...... .... .......... ... ...................... ....... . ............. $ _________ _ Net mterest cost (adjusted for Premium) .. .. .... .............. .... ...... .. .. .... . . . ..... . . .... . . . $ _________ _ True Interest Cost . .. ... . .. .. . ..... . .... .. .. .. . . .. .. .. ... .. . . .. . . .. . ...... _____ % D The Bidder elects to purchase Municipal Bond Insurance from. (Assured] [AGM] [BAM] [ ]. Circle one or complete blank D The Bidder elects to have the following Term Bonds: Maturity Date Years Amount* October 1, __ to $ _____ _ October l, __ to $ _____ _ *subject to mandatory redemption requrrements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and if the undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means All bid documents, closmg documents, certificates, ordinances, resolutions and related mstruments may be executed by electronic transmission. Copies, telecopies, electromc files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court oflaw. The acceptance of this proposal by the Issuer by execution below shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State ofKansas. Submitted by:--------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: -------------Telephone No ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April 13, 2020. Attest: Clerk Mayor NOTE. No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid Email bids may be sent to the Financial Advisor at arteberryd@stifel.com or electronic bids may be submitted via PARITY®, at or prior to 1.00 pm, Central Time, on April 13, 2020 Any bid received after such time will not be considered PRELIMINARY OFFICIAL STATEMENT DATED APRIL 6, 2020 New Issues Book-Entry Only Moody's Ratings: Bonds-"Aa3" Notes-"MIG1" In the opinion of Gilmore & Bell, P.C., Bond Counsel to the City, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"): (1) the interest on the Notes and Bonds [(including any original issue discount properly allocable to an owner thereof)] is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. CITY OF SALINA, KANSAS $5,250,000* $7 ,080,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Dated: Date of Delivery Due: As Shown Herein The General Obligation Temporary Notes, Series 2020-1 Notes (the "Notes") will be issued by the City of Salina, Kansas (the "Issuer'' or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book-entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the "Note Paying Agent" and "Note Registrar''). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES -"Redemption Provisions" herein. The General Obligation Internal Improvement Bonds, Series 2020-A Bonds (the "Bonds") will be issued by the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2021 (the "Bond Interest Payment Date"). The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and "Bond Registrar''). The Bonds are subject to redemption at the option of the City as further described herein. See THE BONDS -"Redemption Provisions" herein. MATURITY SCHEDULES (see inside front cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Notes and Bonds will be available for delivery through the facilities of OTC, in New York, New York, on or about April 29, 2020. BIDS FOR THE PURCHASE OF THE NOTES AND BONDS WILL BE RECEIVED PURSUANTTOTHE NOTICE OF SALE: The Series 2020-1 Notes: On or before 1:00 p.m., Central DaylightTime The Series 2020-A Bonds: On or before 1 :00 p.m., Central Daylight Time On Monday, April 13, 2020 THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. * Preliminary; subject to change. Maturity 05-01-21 MATURITY SCHEDULES $7,080,000111 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 Amount $7,080,000 Base cus1pt21 794744 At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on November l, 2020, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. $5,250,000111 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Maturity 10-01-21 10-01-22 10-01-23 10-01-24 10-01-25 10-01-26 10-01-27 10-01-28(3) 10-01-29(3) 10-01-30131 10-01-31(3) 10-01-32(3) 10-01-33(3) 10-01-34(3) 10-01-35(3) <11Preliminary; subject to change. Amount $520,000 600,000 615,000 630,000 645,000 205,000 215,000 225,000 230,000 235,000 210,000 220,000 225,000 235,000 240,000 SERIAL BONDS Base cus1p<21 794744 <21 CUSIP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. 131 At the option of the City, Bonds maturing on October 1, 2028 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2027, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Oty in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED ASA RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND,N "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL {EXCEPT FOR PERMITTED OMISSIONS) BY THE ISSUER FOR PURPOSES OF COMPLYING WITH RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300WestAsh P.O. Box736 Salina, Kansas 67402-0736 CITY COMMISSION Mike Hoppock, Mayor Melissa Rose Hodges, Vice Mayor Trent W. Davis, M.D., Commissioner Rod Franz, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P .C. Kansas City, Missouri MUNICIPAL ADVISOR Stifel, Nicolaus & Company, Incorporated Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT............................................................................................................. 1 THE NOTES.......................................................................................................................................... 2 THE BONDS......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN......................................................................................................................... 13 SOURCES AND USES OF FUNDS.......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................................... 14 LEGAL MATTERS................................................................................................................................. 16 TAX MATTERS..................................................................................................................................... 17 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 19 UNDERWRITING ................................................................................................................................. 19 ABSENCE OF MATERIAL LITIGATION................................................................................................... 19 CONTINUING DISCLOSURE................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT.......................................................................................... 20 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY.............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY..................................................................... A-6 DEBT SUMMARY OF THE CITY....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2018 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2019 [THIS PAGE INTENTIONALLY LEFT BLANK] General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $7,080,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 $5,250,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $7,080,000* General Obligation Temporary Notes, Series 2020-1 (the "Notes"), and its $5,250,000* General Obligation Internal Improvement Bonds, Series 2020-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. *Preliminary; subject to change. 1 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated as of April 29, 2020 (the "Dated Date"), shall become due in the amount on the Stated Maturity and are subject to redemption and payment prior to the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, the Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on November 1, 2020, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the 2 Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar" and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter 3 provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated. Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity (the "Note Interest 4 Payment Date") to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on the Note Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on the Note Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Note Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES-Book-Entry Notes; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entrv Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository 5 and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A.12-1736 et seq, K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the City, and Article 12 Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and an ordinance and resolution adopted by the governing body of the City authorizing the issuance of the Bonds (collectively, the "Bond Resolution"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 6 Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. Description The Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated as of April 29, 2020 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Bond Interest Payment Date to which interest has been paid, on the Bond Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2028 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2027, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. 7 All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees 8 that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Bond Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Bond Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Bond Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. 9 Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. 10 THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities reg istered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with OTC. 2. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. OTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. OTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for OTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of "AA+". The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about OTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with OTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with OTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 11 7. Neither OTC nor Cede & Co. (nor any other OTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, OTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of OTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of OTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of OTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of OTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's OTC account. 10. OTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through OTC (or a successor securities depository). In that event, certificates will be printed and delivered to OTC. 12. The information in this section concerning OTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY 12 THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (collectively, the "Note Projects"), retire a portion of the City's outstanding general obligation temporary notes and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Police Training Center Pheasant Ridge Addition No. 3 Stone Lake 2 The Bond Projects Ordinance/ Resolution Res. 19-7743 Res. 18-7633 Res. 19-7750 Authority K.S.A. 12-1736 K.S.A. 12-6a01 et seq. K.S.A. 12-6a01 et seq. Total: Principal Amount $6,114,030.07 548,691.01 409,807.26 $7,080,000 Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects"), retire a portion of the City's outstanding general obligation temporary notes and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Pro!ect Description Landfill Cell #20 Police Parking Smoky Hill River Renewal Golf Irrigation North 9th Street Bridge Ordinance/ Resolution Res. 19-7672 Res. 19-7679 Ord. 17-10885 Res. 19-7678 Res No. 19-7677 Authority K.S.A. 12-2101 et seq. K.S.A. 12-1736 et seq. Article 12, §5 of the Constitution of the State of Kansas Charter Ordinance No. 39 K.S.A. 12-685 et seq. Total: SOURCES AND USES OF FUNDS Principal Amount $2,004,369.83 255,979.76 2,410,073.60 482,980.68 96,595.14 $5,250,000.00 Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Original Issue Premium/ Discount Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Underwriter's Discount Costs of Issuance Total Application of Funds 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANAL YlE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITERS. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A-FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." Kansas Public Employees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The 14 Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under ''TAX MATIERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on the Securities The initial offering prices of certain maturities of the Securities that are subject to optional redemption may be in excess of the respective principal amounts thereof. Any person who purchases such a Security in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Securities are subject to redemption at par under the various circumstances described under ''THE NOTES- Redemption Provisions" and ''THE BONDS-Redemption Provisions." No Additional Interest or Mandatorv Redemption upon Event of Taxability Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. 15 Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. COVID-19 In December 2019, a novel strain of coronavirus disease known as COVID-19 emerged for the first time in humans in Wuhan, China. Since that date, the virus has spread throughout the world, including the United States and State of Kansas, and has been characterized by the World Health Organization as a pandemic. The continued proliferation of COVID-19 throughout the State and the City may adversely affect the City due to the economic ramifications of mandatory business, school, and other closures. Within the State, the Governor has announced the closure of all K-12 schools through the end of the 2019-20 school year and issued an Executive Order instituting a temporary State-wide stay-at-home order. The COVID-19 pandemic could negatively impact the finances and operations of the City and result in increased costs to the City and/or negative impacts on the collection of property and sales taxes within the City due to increased tax payment delinquencies, disruption of the collection or distribution of taxes by the State and/or Saline County, or other related factors that may pressure the City's budget and cash flows. Such factors could negatively affect timely repayment of the Bonds. Significant developments regarding COVID-19 continue to occur daily and the extent to which COVID-19 will impact the City in the future is highly uncertain and cannot be predicted. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B-FORM OF CONTINUING DISCLOSURE UNDERTAKING. 16 TAX MATTERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities [(including any original issue discount properly allocable to an owner thereof)] is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §26S(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences [Original Issue Discount. For federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is generally the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code § 1288, OID on tax-exempt obligations accrues on a compound basis. The amount of OID that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on such Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual 17 period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual ofOID. For each Security, the stated redemption price at maturity includes all payments on the Security, except interest payable at least annually over the term of the Security ("qualified stated interest"). Since the May 1, 2020 interest payment on the Notes will be paid more than one year after the Notes are issued, none of the interest payments on the Notes constitute qualified stated interest, and the stated redemption price of the Notes includes all payments on the Notes.] [Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of premium.] Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS Moody's Investors Service has assigned a "MIGl" rating on the Notes and a "Aa3" rating on the Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. 18 MUNICIPAL ADVISOR Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by [ ), (the "Notes Underwriter") at a price equal to the principal amount of the Notes, less an underwriting discount of$[ ]. The Bonds are being purchased by [ ____ _, (the "Bonds Underwriter") at a price equal to the par amount of the Bonds, plus a net premium of$[ , less an underwriting discount of$[ ]. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the "Underwriters". ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In connection with the issuance of the Securities, the Issuer will enter into a continuing disclosure undertaking {the "Disclosure Undertaking") wherein the Issuer covenants to annually provide certain financial information and operating data (collectively, the "Annual Report") and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. Pursuant to the Disclosure Undertaking, this Issuer has agreed to file its Annual Report with the national repository ("EMMA") not more than 180 days after the end of the City's Fiscal Year, commencing with Fiscal Year ended in December 31, 2018. In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Certain operating data for the fiscal year ended December 31, 2014 was timely filed in summary form. Additional details related to such summary information were included in the City's audited financial statements for the fiscal year ended December 31, 2014 that were filed on October 26, 2015. 2. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make 19 timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes . The Issuer believes this information was disseminated or available through other sources . The Issuer's audited financial statements for each of the last five fiscal years were not completed by the filing deadlines primarily because of challenges with financial software conversion (which has since been completed), staff turnover and delayed receipt of component unit audits. In compliance with the Issuer's prior disclosure undertakings, the Issuer timely filed unaudited financial statements and promptly filed audited financial statements when they became available. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 20 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2019 Estimated Actual Valuation (1) 2019 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2018 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Utility System Revenue Bonds Outstanding Special Obligation Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,294,115,685 $ 509,082,680 $ 63,960,000 $ $ $ $ $ $ $ $ $ 46,716 1,369 1.94% 12.56% 7,080,000 46,354,852 656,261 10,330,000 22,570,000 122,192,447 239,587,299 5,129 7.27% 47.06% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY-"Estimated Actual Valuation". (2) Includes the Bonds. (3) Excludes outstanding Notes to be retired with proceeds from the sale of the Notes and Bonds and other available funds. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full faith and credit. See DEBT SUMMARY OF THE CITY-"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY -"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2018 U.S. Census Bureau estimate of 46,716. The City is the county seat for Saline County which had an estimated 2018 U.S. Census Bureau population of 54,401. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Mike Hoppock Melissa Rose Hodges Trent W. Davis, M.D. Karl F. Ryan Rod Franz Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2022 2022 2024 2024 2022 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2018 2017 2016 2015 2014 A-2 U.S. Census Bureau Population 46,716 46,994 47,336 47,813 47,867 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 201 full-time employees for out of the 446 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full-time firefighters. The fire department operates 31 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 109 personnel, of which 82 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,300. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 642 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 716 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 50 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. The University of Kansas School of Medicine and School of Nursing have a campus in Salina. This campus is aimed at students with a strong desire to practice medicine in rural areas. The School of Medicine has 8 students and the School of Nursing started with 17 students and has a capacity of 48 students. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by United Airlines. The airline offers daily scheduled passenger air service to Denver International Airport and Chicago O'Hare International Airport. A-3 Utilities and Infrastructure Evergy, Inc. supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"}, a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $942.056 million as of Spring, 2019. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of June 30, 2018, KPERS serves approximately 312,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. A-4 (b) Local Group -all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution is 8.89% of the employee's gross salary for calendar year 2019. The Issuer's contribution is projected to change to 8.61% of gross compensation for calendar year 2020. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2018 (the "2018 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL'') of approximately $1.502 billion at the end of 2018. The amount of the UAAL in 2018 changed from the previous year's amount due to the factors discussed in the 2018 Valuation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2018 Valuation Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2018 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2018 Valuation Report sets the employer contribution rate for the period beginning January 1, 2021, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.87% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2018 Valuation Report. The statutory contribution rate of employers currently equals the 2018 Valuation Report's actuarial rate. As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2018 Valuation Report, KP&F carried an UAAL of approximately $933 million at the end of 2018. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2019, the Issuer contributes 22.13% of employees' gross compensation. Beginning January 1, 2020, the Issuer's contribution is projected to change to 21.93% of gross compensation for calendar year 2020. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums and tennis courts. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue forthe region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, Rev Group, Exide Battery, Advance Auto Parts Distribution Center, and Signify. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor'' of all Kansas first class cities in 2017 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2017, businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 5,996 employees with a total level economic activity for 2017 for approximately $1,168,468,359. The report also cited that the Airport/Airport Industrial Center accounted for 14.3 percent of the employment in Saline County and 37 percent of the total economic activity in a seven-county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2019 to be 25,643 persons and year-to-date 2020 to be 25,766. The estimated median household income for the City in 2018 was $49,079 and owner-occupied housing rates in the City were 64.7%. Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority") is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, United Airlines began daily service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier- manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2019, the Salina Air Traffic Control Tower logged over 76,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.2 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2019 and 118,337 as of January 2020. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight of the businesses and organizations are tenants of the Authority. One of the primary functions of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwan's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina Salina Vortex REV Group Wal mart Signify Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,875 1,700 1,500 1,100 600 425 375 300 250 190 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2018 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A 47,945 44,732 43,552 41,447 41,096 40,235 State of Kansas $50,155 47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2019 (dee) 25,338 24,583 755 3.0% 2018 25,685 24,784 781 3.1 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 A-8 State of Kansas: Total Unemployment Year Labor Force Em!;!IOled Unem!;!IOled Rate 2019 (dee) 1,486,620 1,439,563 47,057 3.2% 2018 1,491,587 1,445,819 45,768 3.1 2017 1,478,783 1,425,216 53,567 3.6 2016 1,484,001 1,422,122 61,879 4.2 2015 1,499,009 1,435,884 63,125 4.2 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 04-24-19 05-01-20 Total Series 2008-B 2009-A 2010-A 2010-B 2011-A 2012-A 2012-B 2013-A 2013-B 2014-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A 2020-A (ll Includes the Bonds. (2l Preliminary; subject t9 change. PUr!;!OSe Internal Improvements Internal Improvements Refunding & Improvement Refunding Internal Improvements Internal Improvements Refunding Taxable Improvements Improvements Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements (the Bonds) Improvements Amount of Issue $3,525,000 23,695,000 6,875,000 7,860,000 6,565,000 2,365,000 3,785,000 1,360,000 4,330,000 7,570,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 11,090,000 5,250,000(2) Final Maturity 07-01-24 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 10-01-39 10-01-40 Amount Outstandingl11 $390,000 595,000 330,000 1,170,000 740,000 1,340,000 180,000 905,000 2,920,000 4,600,000 5,515,000 5,785,000 12,430,000 8,745,000 1,975,000 11,090,000 5.250.000(2) $63,960,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding 2019-1 04-24-19 05-01-20 $6,085,000 $0(1) 2019-2 10-15-19 07-01-20<2> 5,085,000 O(l) 2020-1 05-01-20 10-01-40 7,080,000(3) 7 ,080,000<3> $7,080,000 <1> To be redeemed with proceeds from the Notes and Bonds and other available funds. <2>conditionally called for redemption on May 1, 2020. <3>preliminary; subject to change. Utility System Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturi~ Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $10,330,000 Lease Obligations (as of December 31, 2019): Year Original Final Amount Item Issued Amount Year Outstanding HVACSystem 2012 $1,100,000 2027 $656,261 Special Obligation Revenue Bonds: The following special obligation revenue bonds are payable solely from sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturi~ Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $18,250,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $22,570,000 State Loans The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultimately secured by the City's ability to levy unlimited ad valorem property taxes. A-10 Project Year Final Original Amount Number Purpose Originated Palfment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $ 6,411,458 KDHE 2841 Water 2015 08-01-35 4,250,000 3,693,394 KDHE 2917 Water 2019 02-01-40 32,000,000 32,000,000* KDHE 2957 Water 2019 02-01-40 4,250,000 4,250,000* $46,354,852 *Construction on these projects is in process. The City has not yet drawn down the entire principal amounts shown above but is expected to do so in order to complete the projects. Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Amount Outstanding $ 20,175,000 220,693 109,280,000 Estimated Share of the City Jurisdiction Salina Airport Authority Saline County* Unified School District No. 305 Amount $ 20,175,000 163,268 101,854,179 $122,192,447 *As of June 30, 2019, all other jurisdictions as of December 31, 2019. Annual Debt Payments Percentage 100.00% 73.98 93.20 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2020-A Bonds Year Principal Interest Principal Interest 2020 $4,895,000 $909,329 2021 4,865,000 1,671,789 2022 4,790,000 1,502,298 2023 4,610,000 1,317,644 2024 4,390,000 1,138,598 2025 4,055,000 1,024,004 2026 3,745,000 913,534 2027 3,500,000 806,839 2028 3,180,000 710,294 2029 2,895,000 619,936 2030 2,410,000 539,224 2031 2,430,000 469,321 2032 2,330,000 397,426 2033 2,305,000 325,594 2034 2,110,000 253,813 2035 1,885,000 188,250 A-11 2036 1,610,000 130,763 2037 1,240,000 83,175 2038 725,000 43,950 2039 740,000 22,200 $58, 710,000 $13,067,981 *Excludes payments made prior to the closing date of the Bonds. Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December31 Valuation Valuation Population Capita 2019 $59,170,000 11.69% 1.80% 46,716 $1,266.59 2018 54,885,000 11.25 1.74 46,716 1,174.87 2017 59,985,000 12.46 1.94 46,994 1,276.44 2016 56,875,000 12.03 1.87 47,336 1,201.52 2015 57,535,000 12.43 1.94 47,813 1,203.33 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $26.3 million of improvements. A portion of the debt service payments on bonds issued for these projects are anticipated to be paid from local sales tax and utility system fees. The City has recently discussed the delaying several of these projects in light of the COVID-19 situation. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City has been involved with civil litigation concerning environmental contamination in certain areas in the vicinity of the Salina Regional Airport and the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University (the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency (DoD) caused contamination. The Salina Public Entities reached a mediated settlement agreement with the U.S. Department of Justice (DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provided for a 10% local share of initial project costs paid by the City. The Consent Decree provided for a remedial investigation and feasibility study (Rl/FS) to determine the extent and severity of the contamination and to determine the best method of remediation. The Rl/FS has been completed within budget and the parties are awaiting the issuance of the Kansas Department of Health and Environment's Corrective Action Decision (CAD). Issuance of the CAD will provide the basis for the resumption of mediation with the Federal Government to determine respective financial responsibilities for remediating the contamination. If a mediated settlement results in identification of a potentially material local share of the remediation cost, it may be necessary for the City to issue debt to fund the local share. The exact timing and amount, if any, of such borrowing cannot be determined at this time. A-12 Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the "Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; A-13 (E) expiration of any abatement of property from property tax; or (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or (F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding calendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "(w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax Lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "(b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this A-14 cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2018 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"), which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2015 2016 2017 2018 Property Taxes $9,244,160 $9,217,596 $10,115,784 $9,743,497 Sales Tax 12,930,811 12,780,891 12,906,032 32,900 Other Taxes 5,663,843 6,347,717 5,215,264 5,444,880 Intergovernmental 975,720 1,301,106 1,133,310 1,144,717 Charges for Services 6,046,903 6,472,698 6,153,450 6,366,094 Investment Revenue 0 102,045 3,336 45,477 Miscellaneous 498,557 507.330 1,709,491 452,916 Total Revenues $35,359,034 $36,729,383 $37,236,667 $36,490,207 Expenditures: General Government $5,342,433 $5,422,010 $5,423,241 $5,648,579 Public Safety 21,267,630 21,664,398 21,628,730 22,952,925 Public Works 4,875,641 5,066,426 5,328,315 5,350,056 Public Health and Sanitation 754,347 703,606 749,656 793,780 Culture and Recreation 4,039,856 4,147,736 4,424,221 4,494,713 Planning and Development 586,358 980,950 752,825 766,471 Capital Outlay 1,041,690 1,098,587 896,026 860,115 Total Expenditures $37,907,955 $39,083,713 $39,203,014 $40,866,639 Revenues Over (Under) $(2,548,921) $(2,354,330) $(1,966,347) $$(4,376,432) Other Sources (Uses) 2,962,350 2,546,500 3,816,500 4,236,500 A-15 Net Change in Fund Balance Fund Balance January 1 Restatement of Prior Year Balance Fund Balance December 31 Assessed Valuation $413,429 $4,254,432 172,325 $4,840,186 192,170 $4,840,186 0 $5,032,356 1,850,153 $5,032,356 0 $6,882,509 $(139,932) $6,882,509 0 $6,742,577 According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propertv0 Utilities Vehicle Valuation 2019 $421,108,311 $11,173,863 $22,113,195 $54,687,311 $509,082,680 2018 403,835,383 10,130,718 20,485,144 53,336,677 487,787,922 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 *Personal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2019 2018 2017 2016 2015 2014 2013 Special Assessments Residential Real Estate Equalization Ratio N/A 11.17% 11.04 11.36 11.28 11.65 11.55 Estimated Actual Value $3,294,115,685 3,150,409,123 3,097,885,103 3,046,949,034 2,968,008,193 2,917,267,724 2,889,385,914 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of A-16 Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount 2! Amount 2! 2019* 29.720 $15,037,337 $8,552,180 56.9% $8,552,180 56.9% 2018 28.394 13,780,643 13,427,810 97.4 13,590,888 98.6 2017 26.129 12,728,983 12,381,334 97.3 12,602,044 99.0 2016 27.603 11,564,876 11,320,197 97.9 11,524,101 99.6 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 2014 27.080 10,991,959 9,312,515 84.7 10,832,972 98.6 2013 26.927 10,868,225 8,101,775 74.5 10,839,120 99.7 2012 26.190 10,550,730 6,597,038 62.5 10,500,249 99.5 *Represents collections through December 31, 2019. A-17 Tax Levies Nov Nov Nov Nov Nov Nov 2014 2015 2016 2017 2018 2019 Levy Levy Levy Levy Levy Levy City of Salina 27.080 27.311 27.603 26.129 28.394 29.720 Salina Library 6.034 5.895 5.893 5.989 6.014 5.913 State Education & Other 1.500 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 55.605 56.120 55.743 56.501 57.522 55.508 Airport Authority 4.486 4.396 4.396 4.225 4.998 4.447 Central Kansas Extension District 1.285 1.502 1.510 1.475 1.476 1.198 Saline County 37.047 38.275 37.508 37.321 38.437 41.097 Total 134.037 134.999 134.153 133.140 138.341 139.383 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2019 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Evergy, Inc. Utility $13,682,027 2.69% SFC Global Supply Chain Inc Manufacturing 6,855,966 1.35 Kansas Gas Service Utility 4,415,353 0.87 RAF Salina LLC Retail Shopping Center 4,296,499 0.85 S&B Motels Inc Motel 3,774,927 0.74 Central Mall Realty Holding LLC Retail Shopping Center 2,868,321 0.56 Union Pacific Railroad Co. Railroad 2,570,668 0.51 Menard Inc. Home Improvement Store 2,465,098 0.49 Individual Residential 2,440,724 0.48 Sam's Real Estate Business Trust/Walmart Discount Store 2,286,508 0.45 Total $45,656,091 8.99% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: *Through February 2020. Year 2020* 2019 2018 2017 2016 2015 2014 A-18 Value $2,084,451 20,544,765 71,862,718 59,975,197 97,910,328 56,989,007 24,214,432 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The 2016 sales tax replaced an existing sales tax of .40%. The total sales tax for goods and services in the City is 8. 75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. !1lAs of February 2020 Year 2020!11 2019 2018 2017 2016 2015 2014 2013 Citywide Local Option Sales & Use Tax Receipts $2,437,.227 14,922,404 14,632,584 14,404,702 10,458,630 10,372,573 10,099,512 9,705,026 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $1,372,223 7,608,604 7,415,804 7,368,869 7,312,618 7,376,708 7,188,934 6,998,806 !2lCollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the . 75% 2016 sales tax. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was .90%. The aggregate rate was increased to 1.25% as a result of the approval of the 2016 sales tax discussed above. Source: Kansas Department of Revenue Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. A-19 Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically A-20 established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2018 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.17%, and commercial and industrial property was 22.55%. A-21 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIXB Form of Continuing Disclosure Undertaking [THIS PAGE INTENTIONALLY LEFT BLANK] CONTINUING DISCLOSURE UNDERTAKING $5,250,000* CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A $7,080,000* CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 DATED APRIL 29, 2020 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2020 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 29, 2020, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or Continuing Disclosure Undertaking the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2019, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, Continuing Disclosure Undertaking B-2 as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section ( d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity of less than 18 months. ( c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation ofa merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an Continuing Disclosure Undertaking B-3 action or the tennination of a definitive agreement relating to any such actions, other than pursuant to its tenns, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, tennination event, modification of tenns, or other similar events under the tenns of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, ifthe Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall tenninate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such tennination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such tennination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial infonnation or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (I) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative fonn and also, if feasible, in quantitative form) Continuing Disclosure Undertaking B-4 between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.} Continuing Disclosure Undertaking B-5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk Continuing Disclosure Undertaking B-6 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers B-7 [THIS PAGE INTENTIONALLY LEFf BLANK] APPENDIXC December 31, 2018 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2018, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. [THIS PAGE INTENTIONALLY LEFf BLANK] COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2018 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, 2018 Letter of Transmittal Organizational Chart List of Principal Officials Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i-iv v vi 1 - 3 4-15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2018 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City's Total OPEB Liability and Related Ratios Other Postemployment Benefits -KPERS Schedule of Changes in the City's Total OPES Liability and Related Ratios KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement District Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -70 71 72 73 73 74-75 76 77 78-79 80-81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2018 TABLE OF CONTENTS-CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows-Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds STATISTICAL SECTION Net Position by Component -Last Ten Fiscal Years Changes in Net Position -Last Ten Fiscal Years Fund Balances, Governmental Fund -Last Ten Fiscal Years Changes in Fund Balances, Governmental Funds-Last Ten Fiscal Years Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years Direct and Overlapping Property Tax Rates-Last Ten Fiscal Years Principal Property Taxpayers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 99 100 101 102 -103 104 105 106 Schedule 1 107 2 108 3 109 4 110 5 111 6 112 7 113 8 114 9 115 10 116 11 117 12 118 13 119 14 120 15 121 16 122 17 123 18 124 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 City of !"j 5allna September 25, 2019 To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2018, 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, 2018 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 transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 46,994. 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, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." According to the Kansas Department of Revenue's Annual City Trade Pull Factor report, Salina had a pull of factor of 1.48 in 2017. 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 2018. 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 Salina Field House completed its first year in business. It hosted 16 tournaments and over 91,000 attendees and continues to grow in the number of events that it is drawing to the City. ii Old Chicago Pizza opened for business in the City's downtown corridor in late 2018. STAR Bonds were issued in December, 2018, for the Downtown Revitalization Project. As a result of this funding, several projects are now moving forward including the City's Downtown Streetscape project, the Alley Entertainment Center, a car museum and the new downtown hotel. Other major projects that were on going included gutter and paving on North 91h Street, South Well Field improvements, continued improvements to the water distribution system and preliminary design on the Smoky Hill River Renewal and Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2.5% were implemented in 2018. 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 *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 Mize Houser 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 Municipal Court Risk Management Development Services Lauren Driscoll Building Services Neighborhood Services Planning & Zoning Community Relations Parks & Recreation Chris Cotton Parks Division Recreation Division Golf Course Facility Maintenance Animal Services *Tony's Pizza Event Center Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Computer Technology Jock Rolfs CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rose Hodges Mike Hoppock Joe Hay City Manager Michael Schrage Deputy City Manager Vacant Utilities Martha Tasker Finance/Administration Debbie Pock Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection City Clerk Water Customer Accounting Finance Arts & Humanities Brod Nelson v Legal Services Clark Mize & Linville Chartered* Greg Bengston Continuous Process Improvement Scott Gordner Fire Kevin Royse Fire Administration Fire Suppression Fire Prevention EMS Human Resources Natalie Fischer Police Brod Nelson Administration Patrol Division Support Division Investigative Division vi City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Rose Hodges, Commissioner Joe Hay, Commissioner City Executive Staff Michael Schrage, City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities Scott Gardner, Continuous Process Improvement vi FINANCIAL SECTION I Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT MI ZE0 HOUSER OMPANYr.A. We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2018, 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 Housing Authority of the City of Salina, which is a discretely presented component unit in the accompanying financial statements and which statements reflect total assets and deferred outflows of resources of $7,486,949 as of June 30, 2018 and total revenues of $2,507,375 for the year then ended . 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 Housing Authority of the City of Salina , is based solely on the reports of the other auditors. www.mizehouser.com • mhco@mizehouser.com 534 S Kansas Ave, Suite 700 •Topeka, KS 66603-3465 • 785.233.0536 p • 785.233.1078 I 534 S Kansas Ave, Suite 400 •Topeka, KS 66603-3454 • 785.234.5573 p • 785.234.1037 I 7101 College Blvd, Suite 900 •Overland Park, KS 66210-1984 • 913.451.1882 p • 913.451.2211 I 211 E Eighth Suite Am Lawrence, KS 66044-2771 • 785.842.8844 p • 785.842.9049 I \ 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2018, 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 Change in Accounting Principle As described in Note 3 to the financial statements, the City implemented GASB 75 for other postemployment benefits during the current year. As a result of the implementation, a restatement was made to the net position at December 31, 2017. Our opinion is not modified with respect to this matter. Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2017, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2018, 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. 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 70 and 71, the schedule of the City's proportionate share of the net pension liability on page 72, and the schedule of City contributions on page 72 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. 2 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. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas September 25, 2019 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2018 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31 , 2018. 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 $11 .1 million from current operations with net position increases of $9.8 million and $1 .3 million in governmental activities and business-type activities, respectively. • At the close of 2018, the City's governmental funds reported combined ending fund balances of $19.1 million, a decrease of $2.7 million from the prior year. This primarily resulted from issuance of temporary notes in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance decreased $140 thousand over the prior year. • At the close of 2018, the City's enterprise funds reported a combined ending Net Position of $90.4 million, an increase of $1 .3 million over prior year. Positive performance was shared by the Water and Sewer Fund and the Sanitation Fund, with the Water and Sewer Fund providing the bulk of the change ($1 .8 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 increased by $4.2 million from the prior year and revenues from business type activities increased $.5 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, 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 Other Information CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 41% ($37.5 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $.7 million (2%) from the prior year with the sanitation fund increasing $121K (4.2%) and water and sewer fund increasing $347K (2%). The increase in charges for services in the sanitation fund 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 24.7% ($22.2 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 2018, 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 is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 13.9% ($12.5 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 3.0%. The total City mill levy decreased 5.3%. The overlapping levy decreased in 2018 by .75%. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 $10.1 million from its peak of $39.7 million in 2007. At the 2018 tax rate, this exemption is equivalent to over $775K in annual lost revenue. 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: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year Real Estate and Personal Property Assessed Valuation City Mill Levy ($ per $1,000) Operating (General Fund) Debt Sen.4ce Total City Rate Total Overlapping Levy Percent of Total Taxes Collected Ratio of Total Taxes (including delinquent collections) to taxes 1e-...ed Motor Vehicle Valuation 2018 2017 Change $ 434,451,245 $ 422,364,328 $12,086,917 20.339 21.694 (1.355) 5.79 5.909 (0.119) 26.129 27.603 (1.474) 133.14 134.153 (1.013) 95.9% 99.9% -4.0% 98.4% 101.7% -3.3% $ 53,336,677 $ 50,970,796 $ 2,365,881 The unemployment rate in Salina increased slightly from 2.7% at the end of 2017 to 3.3% at the end of 2018, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force increased to 30, 174 from 27,684 in 2017. In 2018, the top ten property taxpayers accounted for 10.26% of total assessed value. This is less concentrated than ten years ago (at 15.48%). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $223.8 million at December 31, 2018. This represents an increase in net assets of $11.1 million over 2017. A comparative Condensed Statement of Net Position at December 31, 2018 and 2017: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Condensed Staterrant of Net Position As of Decerrber 31 (11$000) Governrrantal Activ~ies Business-Type Activities Total A"1rrery Govermrent %of %of 2018-2017 2016 2017 2016 2017 2016 Total 2017 Total change Cash and investrrants $ 34,302 $ 24,491 $ 32,140 $ 30,336 $ 66,442 17% $ 54,627 15% $ 11,615 Other current assets 16,774 13,636 2,630 2,336 19,404 5% 16,174 4% 3,230 Noncurrent (capllal) assets 210,515 ~ 90,161 91,306 ~ 76% ~ 61% ~ Total assets 261,591 244,927 124,951 123,980 366,542 100% 366,907 100% 17,635 Total deferred outflows of resources 5,527 5,966 602 667 6,329 100% 6,655 100% ~) Total assets and deferred outflows of resources 267,116 250,695 125,753 124,667 392,671 375,762 17,109 Current liabilities 26,623 12,540 3,614 3,679 32,437 21% 16,419 11% 16,016 Noncurrent llabiities 90,931 102,076 31,332 31,665 122,263 79% 133,761 69% (11.496) Total habNJties 119,554 114,616 35,146 35,564 154,700 100% 150,160 100% 4,520 Total deferred inflows of resources 14,113 ~ 224 220 14,337 12,796 ~ Net posibon: Net investrrant in capital assets 144,645 129,921 62,366 63,316 207,213 92% 193,237 91% 13,976 Restricted for perrrenent funds 514 502 514 0% 502 0% 12 Restricted for debt service 1,651 1,510 1,512 1,512 3,363 2% 3,022 1% 341 lklrestncted (13,759) (6.232) 26,503 24,255 12,744 6% 16,023 6% (3,279) Total net post10n 133,451 123,701 ~ 69,063 ~ 100% ~ 100% 11,050 Percent of total net posJIJon 60% 56% 40% 42% 100% 100% Cash and mvestrrants as a percentage of current lebil~es 120% 195% 643% 762% 205% 334% 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 truces 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 2018, the amount of net investment in capital assets increased by $14.0 million. Amount restricted for debt service increased by $341 thousand. Unrestricted decreased by $3.3 million. Outside of these changes, 2018 resulted in a $11.1 million increase to the net position. Total liabilities increased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities increased and non-current liabilities decreased primarily due to an increase in temporary notes and a decrease in general obligation bonds. 8 Statement of Activities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) A Condensed Statement of Activities is shown below. Program Revenues. Charges tor Services Operating Grants and Contributions Capital Grants and Contributions General Revenues: PropertyTaxes Sales Taxes Other Taxes Investment Revenue Other Miscellaneous Total Revenues. Expenses: General Government Public Safety Public Works Public Health and Sanitalio n Culture and Recreation Planning and Development Solid Waste Disposal Water and Sewer Sanitation Golf Course Interest on Long Term Debt Total E"P"nses Increase in net assets before transfers Transfers and otherexlraordinaryitems Change in Net Position Net PositionJanuary1 Prior Period Adjustment Net Position January t restated Net Position December31 Condensed Statement of Activities For the Year Ended December 31 (tlSOOO) Governmental Activities 2011 2017 $ 'll,411 $ 1l,1l0 4,300 4,635 12,508 22,209 7,240 113 4,541 12,960 2\738 6,899 93 ~~ ~ 58,334 12,013 23,892 1),458 t256 7,040 2,369 9,781 23,120 'll,345 \126 6,880 \835 ~~ ~~ 3,403 3,523 ~~ ~~ 123,701 'lfi,869 ~ 125,211 'lfi,869 $ 133,453 $ 123,701 -==- Business-Twe Activities 2011 2017 $ 27,061 $ 26,703 233 2.382 !i,1!0 2,411 926 6,530 129 1)3 2,364 !i,650 2,178 852 5,891 (4,832) (4,367) ~~ 89,083 ~) 88,685 9 87,559 87,559 Total Pnmary Government 2011-2017 2011 % ---~~ Change $ 37,472 42% $ 36,803 43% $ 669 4,300 4,635 5% 5% 12,508 14% 22,209 25% 7,240 8% 415 0% 12,013 !i% 23,892 30% 'll,458 13% \256 2% 7,040 9% 2,369 3% 2,382 3% !i,110 11% 2,411 3% 926 'f'/o 9,933 __ (1) ~ 212,784 ~ 213,904 $ 223,836 - 4,541 5% 0% 12,960 !i% 6,899 8% 222 0% 9,781 13% 23,120 30% 'll,345 14% \126 'f'/o 6,880 9% \835 2% 2,364 3% !i,650 2'f'/o 2,178 3% 852 1'lo 9,414 ~) ~ 203,428 203,428 $ 212,784 =---= (241) 4,635 (452) 471 341 114 2,232 772 113 130 534 11 (460) 241 74 393 511 57 576 9,356 ~ 'll,476 $ 11,052 -= CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Governmental Activities. Charges for services attributable to governmental activities totaled $10.4 million, operating grants for those purposes were $4.3 million and capital grants for those purposes were $4.6 million. Charges for services and capital grants increased from the prior year, while operating grants decreased slightly. The balance was funded by general revenues. Sales taxes accounted for $22.2 million of general revenues, with property taxes providing $12.5 million. The net position increased by $8.2 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, 2018 were $59.1 million compared to $54.8 million in 2017. Governmental activities represent 74% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% of the total. Business Tvoe Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $21 million, or 26% of the City's total expenses. The majority of this expense ($15.2 million) is attributable to water and sewer operations, with the other activities costing a combined total of $5.7 million. Net position increased by $1.7 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, 2018 and December 31, 2017. Gowrnmental Fund Balances as of December 31, (in OOO's) Fund 2018 2017 Change General $ 6,743 $ 6,883 $ (140) Tourism and Conwntion 458 213 245 Special Gas 1,532 1,082 450 Sales Tax Capital 1,984 2,084 (100) Schilling Capital lmprowment 2,136 3,024 (888) Debt Service 1,851 1,510 341 Capital Projects (694) 895 (1,589) SFH QalicB 1,218 1,715 (497) Other Gowrnmental Funds 3,861 4,353 (492) $19,089 $ 21,759 $ (2,670) Total governmental fund balances decreased by $2. 7 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 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2018 and 2017. Consolidated Statement of Re\A9nues and Expenditures for Major Go-.emmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2018 2017 Change Re1A9nues (Including Other Financing Sources) General $ 41,532 $ 41,864 $ (332) Tourism and Com.ention 1,795 1,685 110 Special Gas 1,653 1,598 55 Sales Tax Capital 8,225 8,265 (40) Schilling Capital lmprowment 15 12 3 Debt Sen.foe 6,602 6,659 (57) Capital Projects 13,555 12, 125 1,430 SFH QalicB 504 248 256 Other Go-.emmental Funds 4,161 4,067 94 Total Rewnues 78,042 76,523 1,519 Less Other Sources (21,622) (19,924) (1,698) Re1A9nues, net of other sources $ 56,420 $ 56,599 $ (179) Expenditures (Including Other Finacing Uses) General $ 41,672 $ 40,013 $ 1,659 Tourism and Conwntion 1,550 1,655 (105) Special Gas 1,203 1,328 (125) Sales Tax Capital 8,324 7,848 476 Schilling Capital lmprowment 904 1,049 (145) Debt SeNice 6,955 6,398 557 Capital Projects 15, 144 4,407 10,737 SFH QalicB 1,001 5,344 (4,343) Other Go-.emmental Funds 4,653 3,399 1,254 Total Expenditures 81,406 71,441 9,965 Less Other Uses (4, 186) (4, 160) (26) Expenditures, net of other uses $ 77,220 $ 67,281 $ 9,939 Total revenues, including other sources, were down $179 thousand compared to 2017, with no funds showing substantial changes between the two years. Total expenditures increased $9.9 million over 2017. The majority of that increase was in the Capital Projects Fund as a result of increased spending on projects, specifically the Downtown Streetscape project. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: Corrparative Sunmary Staterrent of Net Posttion as of Decerrber 31 (in $000's) Solid Waste Disposal Water and Sew er 2018 2017 Olange 2018 2017 Olange Current Assets $ 6,569 $ 6,709 $ (140) $ 26,338 $ 24,014 $ 2,324 Capital Assets 2,350 3,196 (846) 86,535 86,888 (353) Deferred Outflows 72 79 (7) 610 676 (66) Total Assets and deferred outflows $ 8,991 $ 9,984 $ (993) $ 113,483 $ 111,578 $ 1,905 Current Liabilities $ 461 $ 445 $ 16 $ 3,183 $ 3,299 $ (116) Noncurrent Liabitties 2,847 3,272 (425) 27,576 27,440 136 Deferred tlflow s 30 30 144 143 Total Liabilities $ 3,338 $ 3,747 $ (409) $ 30,903 $ 30,882 $ 21 Net investrrent in capital assets $ 1,570 $ 2,041 $ (471) $ 59,502 $ 60,053 $ (551) Restricted 1,512 1,512 Ulrestricted 4,083 4,196 (113) 21,566 19,131 2,435 Total Net Posttion $ 5,653 $ 6,237 $ (584) $ 82,580 $ 80,696 $ 1,884 o.irrent Assets as a percentage ot current liabHtties 1425% 1508% 827% 728% Sanitation Golf Course WJ! 2017 Olange 2018 2017 Olange Current Assets $ 1,747 $ 1,787 $ (40) $ 116 $ 164 $ (48) Capital Assets 886 826 60 410 395 15 Deferred Outflows 92 102 (10) 27 32 (5) Total Assets $ 2,725 $ 2,715 $ 10 $ 553 $ 591 $ (38) Current Liabilities $ 106 $ 87 $ 19 $ 64 $ 48 $ 16 Noncurrent Liabilities 684 733 (49) 225 240 (15) Deferred nflow s 38 38 11 11 Total Liabilities $ 828 $ 858 $ (30) $ 300 $ 299 $ Net investrrent in capital assets $ 886 $ 826 $ 60 $ 410 $ 395 $ 15 Restricted Ulrestricted 1,011 1,031 (20) (157) (103) (54) Total Net Position $ 1,897 $ 1,857 $ 40 $ 253 $ 292 $ (39) Current Assets as a percentage of current liabitties 1648% 2054% 181% 342% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. Corrparative Surmery of Revenues, Expenses and Cllanges in Net Fbsition for the Year 81ded Decent>er 31 (h $000's) Solid Waste Disposal Water and Sew er 2018 2017 Cllange 2018 2017 Cllange Operating Revenues $ 3,116 $ 3,185 $ (69) $ 20,207 $ 19,861 $ 346 Operating Expenses 2,353 2,320 33 14,348 14,721 (373) Operating hcome 763 865 (102) 5,859 5,140 719 Non-operating revenues (expenses) 17 (20) 37 (667) (832) 165 hcome (Loss) before Transfers 780 845 (65) 5,192 4,308 884 Transfers in (out) (690) (540) (150) (3,650) (3,450) (200) Cllange in Net Fbsltion 90 305 (215) 1,542 858 684 Net Fbsition January 1 6,237 5,932 305 80,697 79,838 859 Restatement (674) (674) 341 341 Net Fbsition January 1, restated 5,563 5,932 (369) 81,038 79,838 1,200 Net Fbsition Decerrber 31 $ 5,653 $ 6,237 $ (584) $ 82,580 $ 80,696 $ 1,884 Sanitation Golf Course 2018 2017 Cllange 2018 2017 Cllange Operating Revenues $ 3,006 $ 2,886 $ 120 $ 884 $ 876 $ 8 Operating Expenses 2,419 2,178 241 926 852 74 Operating hcome 587 708 (121) (42) 24 (66) Non-operating revenues (expenses) 11 6 5 661 661 hcome (Loss) before Transfers 598 714 (116) (41) 24 (65) Transfers in (out) (492) (377) (115) Cllange in Net Fbsition 106 337 (231) (41) 24 (65) Net Fbsition January 1 1,856 1,520 336 292 268 24 Restatement (66) (66) 2 2 Net Fbsition January 1, restated 1,790 1,520 270 294 268 26 Net Fbsition Decerrber 31 $ 1,896 $ 1,857 $ 39 $ 253 $ 292 $ (39) 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2018. 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, 2018 was $300,696, 162 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2018 and 2017: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Business-type Gowmmental ActilAty Acti'<ity Total 2018 2017 2018 Equipment, Furniture and Fixtures $ 2,374 $ 2,040 $ 1,489 Vehicles 2,957 3,521 1,208 Buildings and lmprowments 31,759 33,079 8,941 Land 24,094 24,093 2,060 Land Leased Under Capital Assets 423 Infrastructure 116,365 114,958 72,312 Leasehold lmprowments 326 Construction in Progress 32,217 28,909 4,171 Total $210,515 $206,600 $ 90, 181 - Changes to capital assets may be summarized as follows: Changes to Capital Assets, 2018 (in OOO's) Gowmmental Acti'<ity $ Business-Type Acti'<ity $ 3,221 2017 2018 $ 1,484 $ 3,863 1,041 4, 165 9,362 40,700 1,542 26, 154 423 75,727 188,677 326 ~ 36,388 $ 91,306 $300,696 - Total Additions Retirements Depreciation Net Additions $ 15,859 (5,898) (5,663) (327) (4, 113) $ 19,080 (6,225) (9,776) $ 3,079 4,298 $ (1,219) ---=-- 2017 $ 3,524 4,562 42,441 25,635 190,685 31,059 $297,906 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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, 2018 totaled $57,250,888. In addition, there were temporary notes outstanding in the amount of $18,123,505, as well as a financing operating lease in the amount of $845,338. Business-type activities had $11,898,051 in revenue bonds outstanding, as well as $5,557,686 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 $10,632,351. The City engaged in the following debt transactions during 2018: • On July 30th, the City issued 2018-1, $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 2018-2, $13,500,000 in temporary notes to pay off the 2018-1 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 2018A, $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, 2018, 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 [THIS PAGE INTENTIONALLY LEFT BLANK] BASIC FINANCIAL STATEMENTS CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December31, 2018 Prma!]: Government Tohll Total Total Governmental Business-type Primary ActMtlos Activities Government ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current •ssets Cash •nd Investments Rece1Vables (net of alk>wance for uncoHectibles) Accounts Taxes Interest Inventory Restncted e11sh and investments Prepaid expenses Total current assets Noncurrent 1ssets Capital Hsets. nondepreciable Constructoo in progress Land Capital assets, depreciable Less· Accumuklted d1precaatlon Total noncurrent assets Total assets DeferT9d outflows of resources· KPERS OPEB deferred outflows ol resources OPEB deferred outflows of resources Pension deferred outfk7Ns of resources Deferred charge on bond issuance To1al doferred outflows of resources Total assets 1nd deferred outflows of resources LJabitlJes• Current IWilbllrbes Accounts payable Retalnage payable Accrued liabild:tes Accrued interest pay1ble Deposits p1yable Current portion of compensated absences Current portion of temporary notes payable Curren1 por!Jon of loans payable Current porbOn of revenue bonds payable Current porbon of specilll assessment debt payable Current portion of general obhgabon bonds payable Total current tlablltbes Noncurrent kabilties Accrued habditles Compensated absences Secunty deposits 19tumable Ne1 OPEB oblgatJon Net KPERS OPES obllg1t1011 Net pension habihty Loans p11yable Revenue bonds payoble Speaol 1ssessment dobt payable General obHgation bonds payable Landfill poet-closurw care l1abilltles Total noncurrent llabihUes To1al iablitlos Oefenwd inflows of resources Unavallllble revenue -property taxes KPERS OPEB -rred ln11ows of resoun:es Pension deferred inftows of resources To1al deferred lnllows of resources Total habllitiM and deferred inftows of resources Net Pooltlon Net Investment m capital assets Restrlctodfor Permanent funds Expendable DobtHrvico Unrestncted Total net poslbon 34,302,149 32,140,053 1,951,605 2,148,480 12,744,529 298,248 16 263,000 481,548 1,516,581 51,076,092 34 770 097 32,217,207 4,171,178 24,516,334 2,059,834 275,280,664 151,140,172 121,498,751 67,190,476 210,515,454 90,180,708 261,591,546 124,950,805 98,101 42,043 71,407 9,096 5,260,473 533,024 96738 217,652 5,526,719 801815 $ 267,118,265 $ 125,752,620 1,491,889 348,222 846,849 226,977 564,494 107,944 249,347 183,858 1,611,375 383,182 18,123,505 527,499 728,696 5,877,280 1,166,063 28,623,336 3,813,844 55,264 1,204,110 286,335 3,093,240 394,062 382,848 164,078 27,918,983 3,114,818 12,185,053 10,104,852 11,169,355 46,091,030 4,116,515 1,981,498 90,930,528 31,331,513 119,553,884 35,145,357 12,267,726 9,290 3,981 1,835,545 220,021 14112581 224,008 $ 133,666,425 35,369,385 $ 144,845,530 $ 62,387,728 514,201 1,851,358 1,512,125 [13,759,249] 26,503,402 $ 133,451,840 90,383,a!55 The notes to the basJC finanaal statements arw an integral part of thss statement 16 66,442,202 4,100,085 12,744,529 298,264 744,548 1,516,581 85,848,189 36,388,385 26,576,168 426,420,836 188,689,227 300,696, 162 386,542,351 140,144 80,503 5,793,497 314 390 6,328,534 $ 392,870,885 1,840,111 1,073,826 564,494 357,291 183,858 1,994,557 18,123,505 527,499 728,696 7,043,343 32,437,180 55,264 1,490,445 3,487,302 546,926 31,033,801 22,289,905 11,169,355 50,207,545 1,981 498 122,262,041 154,699,221 12,267,726 13,271 2,055,572 14,336,569 l 169,035,790 $ 207,213,258 514,201 3,363,483 12,744,153 $ 223,835,095 Com(?2nent Unrts Salln1 Salm a Housing Airport Authorlt~ Authon!l! 2,0Q.4,471 255,390 12,548 145,403 36,351 136,383 42457 7098 2,232,210 407 891 161,977 8,921 1,454,559 9,965,118 8,403,404 78,425,642 4,834,319 44,538,812 5,185,621 43,ll60,1!69 7 417 831 44,268,780 4,294 69,118 111,199 1,266,357 69118 1,381,850 7,486,949 45,650,610 48,850 1,086,778 35,803 73,104 218,063 96,092 2,759 2,153 1,967,000 183 504 3,347,098 23,020 24,833 48,680 8,886 11,126 345,226 605,630 4,901 19,395,792 401 965 20,066,129 585 469 23,413,227 7,277 69,884 184 3,964 21 346 64402 28807 138 250 614,276 23,551,477 5,330,745 22,491,023 14,718 1,527,210 (391,890) 6,872,673 22,099,133 Govemmental llCllvltles: General government Public safety Public wortui Public health and sanllabon Culture and recraabon Planning and development Interest on long-tenn debt Total governmental acbvibes Business-type•~: Solid Waste Disposal Water and Sewer Sanilabon Golf Course Total business-type acbvibes Total pnmary government Component units: Salina Housing Authonty Sahna Airport Aulhonty Total component umts CITY OF SALINA, KANSAS STATEMENT OF ACTNITIES For the Year Ended December 31, 2018 Net (Expenses] Revenue and P~ram Revenues Operabng Capital Charges for Grants and Grants and E~nses Serv1oes Contnbubons Contribubons $ 12,012,840 $ 3,569,264 $ 667,179 $ 4,634,742 23,891,543 4,815,110 1,134,717 10,458,094 284,724 1,872,213 1,256,142 46,990 266,676 7,039,683 1,544,676 200,676 2,369,562 149,864 158,041 2,1171439 59,145,303 10,410,628 4~99,502 4,634,742 2,382,082 3,097,271 15,190,160 20,202,022 2,418,930 3,005,740 926,287 755,655 20,917,459 27,060,688 s 60,062,762 $371471,316 $ 412991502 s 4,634,742 s 2,604,085 s 6,019,332 335,160 s 2,027,232 s 21499,892 117,316 1,474,356 s 8,6231417 s 218351052 s 210271232 s 1,5911672 Generel Revenues: Property taxes levied for General purposes Debt service Motor vehicle tax Genet11I purposes Sales tax General purposes Selecbve purposes Other taxes General purposes Investment revenues Miscellaneous Transfers, net Subtotal general revenues Change in net posillon Net position -begmmng Pnor period adjustment Net posibon -beg1nmng, restated Changes 1n Net Position Prima~ Government Total Total Governmental Business-type AclMlies AclM!Jes s [3, 141,655] s [17,941,716] (8,301,157] [942,476] [5,294,331] [2,061,657] [2,117,439] ~9 ,800,431 J 715,189 5,011,862 586,810 [170,632] 6,143,229 ~9.800,431) 6,143,229 8,623,057 2,456,875 1,428,001 13,292,626 8,916,814 7,240,099 182,895 233,355 1,061,810 152,814 4,831,500 [4,8311500] 48,033,6n [4,445,331] 8,233,246 1,697,898 123,700,850 89,082,816 1,517 744 [397,459) 125,218,594 88,685,357 Total Pnmary Government s [3,141,655] [17,941,716] [8,301,157] [942,476] [5,294,331] [2,061,657] [2, 1171439] ~9,800,431] 715,189 5,011,862 586,810 [1701632] 6,143,229 [33,657 ,202] 8,623,057 2,456,875 1,428,001 13,292,626 8,916,814 7,240,099 416,250 1,214,624 43,588,346 9,931,144 212,783,666 1,120,285 213,903,951 Component Urvts s Salina Housing Authonty [124,377] 15,124 12,543 ~ [96,710) 6,976,479 JZ.096) 6,969,383 $ Sahna Airport Authonty [21045,084) [2,045,084] 2,338,967 3,745 5,375 2,348,087 303,003 21,808,184 [12,054) 21,796,130 Net posllion -ending s 1331451,840 s 90,3831255 $22318351095 $61872,673 $2210991133 The notes to the basic financial statements are an integral part of this statement. 17 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2018 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,210,942 $ 853 $ 1,266,574 $ 2,263,217 Restricted cash Receivables (net) Accounts 1,492,279 457,529 Taxes 9,749,815 320,324 Interest 298,248 Inventory 151,514 Due from other funds 24 544 Total assets $ 16,927 ,342 $ 458,382 $ 1,586,898 $ 2,263,217 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 542,039 $ -$ 26,383 $ 121,237 Retainage payable 28,056 157,656 Temporary notes payable Due to other funds Total liabilities 542,039 54,439 278,893 Deferred inflows of resources Unavailable revenue -property taxes 9,576,319 Unavailable revenue -other 66,407 Total deferred inflows of resources 9,642,726 Fund balance: Nonspendable 151,514 Restricted 458,382 1,359,237 Committed 1,436,972 Assigned 340,106 173,222 547,352 Unassigned 6,250,957 Total fund balances 6,742,577 458,382 1,532,459 1,984,324 Total liabilities, deferred inflows of resources and fund balances $ 16,9271342 $ 4581382 $ 1,586,898 $ 2,263,217 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ $ 2,151,875 $ 1,801,968 $ 13,270,861 $ 7,663 $ 4,033,111 $ 30,007,064 1,516,561 1,516,561 494,287 1,797 2,445,892 2,674,390 12,744,529 298,248 151,514 196,939 221,483 2, 151,875 $ 4,476,358 $ 13,467,800 $ 2,018,511 $ 4,034,908 $ 47,385,291 15,749 $ -$ 352,630 $ 243,131 $ 149,019 $ 1,450,188 300,662 360,475 846,849 13,508,505 13,508,505 196,939 24,544 221,483 15,749 14,161,797 800,545 173,563 16,027,025 2,625,000 12,201,319 66,407 2,625,000 12,267,726 151,514 1,851,358 978,694 4,647,671 1,955,918 133,122 1,217,966 2,581,440 7,325,418 180,208 325,755 1,566,643 [827, 119) [24,544) 5,399,294 2,136,126 1,851,358 [693,997) 1,217,966 3,861,345 19,090,540 2,151,875 $ 4,476,358 $ 13,467,800 $ 2,018,511 $ 4,034,908 $ 47,385,291 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2018 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPEB obligation Net pension liability Temporary notes payable Bonds payable Loans payable 331,845,971 121,346,178 2,756,097 3,470,619 27,764,434 4,615,000 51,968,310 12,185,053 $ 19,090,540 96,738 210,499,793 5,403,295 (1,833,402) [494,287) 3,556,620 Accrued interest on the bonds 107,944 [102,867,457) Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 133,451,840 [THIS PAGE INTENTIONALLY LEFI' BLANK] CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2018 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,409,449 $ -$ -$ Delinquent taxes 213,608 Motor vehicle taxes 1,120,440 General sales taxes 13,292,626 Selective sales taxes 8,203,532 Other taxes 5,444,880 1,795,219 Intergovernmental 1,144,717 1,446,395 Special assessments Licenses and permits Charges for services 6,366,094 Investment revenue 45,477 5 7,234 21,363 Donations Miscellaneous 452,916 39,146 Total revenues 36,490,207 1,795,224 1,492,775 8,224,895 EXPENDITURES: Current General government 5,648,579 Public safety 22,952,925 Public works 5,350,056 468,535 Public health and sanitation 793,780 Culture and recreation 4,494,713 Planning and development 766,471 737,957 Miscellaneous Capital outlay 860, 115 734,079 5,755,835 Debt service Principal retirement Interest and other charges Total expenditures 40,866,639 737,957 1,202,614 5,755,835 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses] [4,376,432) 1,057,267 290,161 2,469,060 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Capital contribution Transfers in 5,041,500 160,000 Transfers [out] [805,000) [812,346) [2,568,350) Total other financing sources (uses] 4,236,500 [812,346) 160,000 [2,568,350) Net change in fund balance [139,932) 244,921 450,161 [99,290) Fund balance -Beginning of year 6,882,509 213,461 1,082,298 2,083,614 Prior period adjustment Fund balance -Beginning of year, restated 6,882,509 213,461 1,082,298 2,083,614 Fund balance -End of year $ 6,742,577 $ 458,382 $ 1,532,459 $ 1,984,324 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,394,143 $ -$ -$ -$ 10,803,592 62,732 276,340 307,561 1,428,001 13,292,626 713,282 8,916,814 7,240,099 423,318 1,282,570 4,297,000 1,545,758 1,545,758 2,500 2,500 492,917 479,229 7,338,240 15,186 21,230 10,707 36,190 157,392 237,660 237,660 336,904 55,048 884,014 15, 186 4,331,424 760,222 503,624 2,806,479 56,420,036 5,648,579 22,952,925 343,811 6,162,402 442,359 1,236,139 1,760,504 6,255,217 38,678 641,823 2,184,929 35 35 903,638 6,759,029 761,892 569,901 16,344,489 5,252,865 8,180,000 810,000 14,242,865 1,702,255 204,886 200,044 84,535 2,191,720 903,638 6,955,120 15,143,915 1,000,614 4,652,968 77,219,300 [888,452] [2,623,696] [14,383,693] [496,990] [1,846,489] [20,799,264] 2,090,000 2,090,000 6,000,000 6,000,000 69,837 69,837 4,634,742 4,634,742 2,270,782 1,354,914 8,827,196 [4, 185,696] 2,270,782 12,794,579 1,354,914 17,436,079 [888,452] [352,914] [1,589, 114] [496,990] [491,575] [3,363, 185] 3,024,578 1,509,863 895,117 1,714,956 4,352,920 21,759,316 694,409 694,409 3,024,578 2,204,272 895, 117 1,714,956 4,352,920 22,453,725 $ 2, 136, 126 $ 1,851,358 $ (693,997] $ 1,217,966 $ 3,861,345 $ 19,090,540 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2018 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is [4,493] 10,493,901 [6, 183,227] $ [3,363, 185] 4,306,181 the amount by which interest decreased. 74,281 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, 197,416 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [370,373] 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. [87,828] Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. 38,061 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. [7,978,572] 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 $ 8,233,246 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, 2018 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 8,409,449 $ 8,625,000 $ 8,625,000 Delinquent taxes 213,608 180,000 180,000 Motor vehicle taxes 1, 120,631 1,090,219 1,090,219 General sales tax 13,292,626 13,427,924 13,427,924 Other taxes 5,444,880 6,980,396 6,980,396 Intergovernmental 1,144,717 1,202,000 1,202,000 Charges for services 5,585,009 5,302,753 5,302,753 Investment revenue 52,956 Miscellaneous 452,920 450,175 450 175 Total revenues 35,716,796 37,258,467 37,258,467 Expenditures General government 5,270,589 3,566,591 3,566,591 Public safety 22,864,626 21,199,918 21,199,918 Public works 5,350,076 5,656,606 5,656,606 Public health and sanitation 793,780 Culture and recreation 4,612,107 5,207,030 5,207,030 Planning and development 766,471 1,960,187 1,960,187 Capital outlay 1,076,672 1,750,000 1,750,000 Total expenditures 40,734,321 39,340,332 39,340,332 Excess [deficiency) of revenues over [under) expenditures [5,017,525) [2,081,865) [2,081,865] Other financing sources [uses) Transfers in 5,041,500 3,390,000 3,390,000 Transfers (out) [805,000] [2,892,809) [2,892,809) Total other financing sources (uses) 4,236,500 497,191 497, 191 Excess (deficiency) of revenues and other sources over [under] expenditures and other (uses) [781,025) [1,584,674) [1,584,674) Unreserved fund balance, January 1 5,067,124 1,584,674 1,584,674 Prior year cancelled encumbrances 835 Unreserved fund balance, December 31 4,286,934 $ -$ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 298,248 1,492,279 9,749,815 151,514 [9,576,319) 340,106 $ 6,742,577 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative) $ [215,551) 33,608 30,412 [135,298) [1,535,516) [57,283) 282,256 52,956 2,745 [1,541,671) [1, 703,998) [1,664,708) 306,530 [793,780) 594,923 1,193,716 673,328 [1,393,989) [2,935,660) 1,651,500 2,087,809 3,739,309 803,649 3,482,450 835 $ 4,286,934 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, 2018 Budgeted Amounts Actual Original Final Revenues Other taxes $ 1,814,240 $ 1,639,980 $ 1,814,240 Investment revenue 5 180 Total revenues 1,814,245 1,640,160 1,814,240 Expenditures Planning and development 737,956 893,000 1,001,894 Total expenditures 737,956 893,000 1,001,894 Excess [deficiency) of revenues over [under] expenditures 1,076,289 747,160 812,346 Other financing sources [uses] Transfers [out] (812,346] [685,000] (812,346] Total other financing sources [uses] [812,346] [685,000] [812,346] Excess [deficiency] of revenues and other sources over [under] expenditures and other (uses] 263,943 62,160 Unreserved fund balance, January 1 [263,090] 113,974 847 Unreserved fund balance, December 31 853 $ 176,134 $ 847 Reconciliation to GAAP Accounts receivable 457,529 GAAP Fund Balance, December 31 $ 458,382 See independent auditor's report on the financial statements. 23 Variance with Final Budget Positive [Negative] $ 5 5 263,938 263,938 263,943 263,943 [263,937) $ 6 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, 2018 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,448,959 $ 1,406,420 $ 1,406,420 Miscellaneous 39,146 Investment revenue 7,234 6,000 6,000 Total revenues 1,495,339 1,412,420 1,412,420 Expenditures Public works 468,535 486,959 486,959 Capital outlay 897,350 946,243 946,243 Total expenditures 1,365,885 1,433,202 1,433,202 Excess [deficiency] of revenues over [under] expenditures 129,454 [20,782] [20,782] 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] 289,454 139,218 139,218 expenditures and other [uses] Unreserved fund balance, January 1 749,459 512,412 512,412 Unreserved fund balance, December 31 1,038,913 $ 651,630 $ 651,630 Reconciliation to GAAP Taxes receivable 320,324 Current year encumbrances 173,222 GAAP Fund Balance, December 31 $ 1.532,459 See independent auditor's report on the financial statements. 24 Variance with Final Budget Positive [Negative] $ 42,539 39,146 1,234 82,919 18,424 48,893 67,317 150,236 150,236 237,047 $ 387,283 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, 2018 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,203,531 $ 8,043,656 $ 8,269,993 Investment revenue 21,363 5,000 5,000 Total revenues 8,224,894 8,048,656 8,274,993 Expenditures Capital outlay 5,934,357 4,620,500 6,470,500 Total expenditures 5,934,357 4,620,500 6,470,500 Excess [deficiency) of revenues over [under] expenditures 2,290,537 3,428,156 1,804,493 Other financing sources [uses] Transfers [out] [2,568,350] [3,750,000] [2,500,000] Total other financing sources [uses] [2,568,350] [3,750,000] [2,500,000] Excess [deficiency) of revenues and other sources over [under] expenditures and other [uses] [277,813) [321,844) [695,507) Unreserved fund balance, January 1 1,658,876 785,304 1,797,359 Prior year cancelled encumbrances 55,909 Unreserved fund balance, December 31 1,436,972 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 547,352 GAAP Fund Balance, December 31 $ 1,984.324 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [66,462) 16,363 [50,099) 536,143 536,143 486,044 [68,350] [68,350] 417,694 [138,483) 55,909 $ 335,120 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2018 Business-Type Activities Ente!J!riSe Funds Solid Waste Water and Assets and deferred outflows of resources Dis122sal Sewer Sanitation Go~Course Current assets. Cash and investments $ 6,379,586 $ 24,185,482 $1,493,590 $ 81,395 Receivables (net of allowance for uncollectibles) Accounts 189,486 1,705,202 253,792 Interest 16 Inventory and prepaid supplies 447 071 344n Total current assets 6,569,088 26,337,755 1,747,382 115,872 Capital assets: Nondepreciable capital assets: Construction in progress 4,171,178 land 682,000 1,362,834 15,000 Depreciable capital assets Capital assets 11,313,026 136,225,697 2,388,3n 1,213,072 Less accumulated depreciation 9,644,947 55,224,969 1,502,563 817,997 Total capital assets 2,350,079 86,534,740 885,814 410,075 Total assets 819191167 112,872,495 2,633,196 525,947 Deferred outftows of resources: KPERS OPEB deferred outtlows of resources 4,204 28,029 7,007 2,803 OPEB deferred outflows of resources 1,113 5,744 1,723 516 Pension deferred outftows of resources 66,559 359,237 83,106 24,122 Deferred charge on bond issuance 217,652 Total deferred outflows of resources 71,876 610,662 91,836 27,441 Total assets and deferred outnows of resources $ 819911043 $ 113,483, 157 12,125,032 $ 553,388 L1abililies and deferred inflows of resources: Current liabilities Accounts payable $ 24,243 $ 279,295 $ 25,454 $ 19,230 Retainage payable 226,9n Interest payable 5,975 243,372 Meter deposits payable 183,858 Current pofbon of compensated absences payable 40,428 217,595 80,342 44,817 Current portion of accrued claims payable Current por!Jon of loans payable 527,499 Current portion of general obligation bonds payable 390,000 n6,063 Current portion of revenue bonds payable 728,696 Total current liabllllies 460,646 3,183,355 105,796 64,047 Noncurrent liabilities: Compensated absences payable 30,210 162,598 60,037 33,490 Accrued claims payable Net OPEB obligation 48,232 248,641 74,624 22,365 Net KPERS OPEB obligation 16,408 109,385 27,346 10,939 Net pension liability 380,308 2,054,012 522,400 158,098 Payable from restricted assets Loans payable 10,104,852 General obligation bonds payable 390,000 3,726,515 Revenue bonds payable 11,169,355 Landfill post-ciosure care liabilities 1,981,498 Total noncurrent liabirties 2,846,656 27,575,558 684407 224,892 Total liablllbes 3,307,302 30,758,913 790,203 288,939 Deferred inflows of resources KPERS OPEB deferred inflows of resources 398 2,654 664 265 Pension deferred inflows of resources 29,965 141,462 37,524 ~ Total deferred inflows of resources 30,363 144116 38,188 ---1.1M1. Total liabilities and deferred inflows of resources $ 3,337,665 $ 30,903,029 $ 828,391 $ 300,280 Net position Net investment in capital assets $ 1,570,079 $ 59,501,760 $ 885,814 $ 410,075 Restricted Restricted for bond retirement 1,512,125 Unrestricted 4,083,299 21,566,243 1,010,827 ~ Total net position $ 516531378 $ 82,580,128 ! 1,896,641 $ 253,108 The notes to the basic financial statements are an integral part of this statement 26 Total lntemal Enterprise Service Funds Funds $ 32,140,053 $4,295,085 2,148,480 16 481 548 111486 34,no,097 4,406,571 4,171,178 2,059,834 151,140,172 168,234 67,190,476 152,573 90,180,708 15661 124,950,805 4,422,232 42,043 1,401 9,096 533,024 25,285 217,652 801,815 26,686 ! 125,152,620 $4,448,918 $ 348,222 $ 41,701 226,9n 249,347 183,858 383,182 33,989 564,494 527,499 1,166,063 728,696 3,813,644 640164 286,335 25,399 55,264 394,062 164,078 5,469 3,114,818 154,549 10,104,852 4,116,515 11,169,355 1,981,498 31,331,513 240,681 35,145,357 880,865 3,981 133 220,027 11,300 224,008 11433 $ 35,369,365 $ 892,298 $ 62,367,728 $ 15,661 1,512,125 26,503,402 3,540,959 ! 90,383,255 $3,556,620 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2018 Business-Type Activities: Ente!l!rise Funds Solid Waste Water and DiS12QSBI Sewer Sanitation Golf Course Operating revenues Charges for services $ 3,097,271 $ 20,202,022 $3,005,740 $ 755,655 $ Miscellaneous 18,894 5101 128,819 Total operating revenues 3, 116, 165 20,207,123 3,005,740 884,474 Operating expenses General government Public works 1,506,857 11,023,621 2,256,647 Recreation 890,552 Depreciation 846,019 3,324,365 162,283 35,735 Total operating expenses 2,352,876 14,347,986 2,418,930 926,287 Operating income [loss] 763,289 5,859,137 586,810 [41,813) Nonoperating revenues [expenses) Investment revenue 46,505 175,346 10,882 622 Interest expense [29,206) [835,262) Accretion of bond premium 11,560 Amortization of bond issuance costs [18,472) Total nonoperating revenues [expenses] 17,299 [666,828) 10,882 622 Income [loss) before transfers 780,588 5,192,309 597,692 [41,191) Transfers from [to) other funds Transfers in Transfers [out] [690,000) [3,650,000) [491,500) Total transfers [690,000) [3,650,000) [491,500) Change in net position 90,588 1,542,309 106,192 [41,191) Net position, January 1 6,237,212 80,696,866 1,856,553 292,185 Prior period adjustment [674,422) 340,953 [66,104) 2,114 Net position, January 1, restated 5,562,790 81,037,819 1,790,449 294,299 Net position, December 31 $ 5,653,378 $82,580,128 $1,896,641 $ 253,108 $ The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds 27,060,688 $8,747,300 152,814 73,258 27,213,502 8,820,558 7,830,946 14,787,125 890,552 4,368,402 7699 20,046,079 7,838,645 7,167,423 981,913 233,355 25,503 [864,468) 11,560 [18,472] [638,025) 25,503 6,529,398 1,007,416 190,000 [4,831,500) [4,831,500) 190,000 1,697,898 1,197,416 89,082,816 2,363,597 [397,459] [4,393) 88,685,357 2,359,204 90,383,255 $3,556,620 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers of goods or services Cash paid to employees Other operating receipts Net cash provided by [used in] operating activities Cash nows from capital and related financing activities Purchase and construction of capital assets Proceeds from loans Principal payments -loans Principal payments -general obligation bonds Principal payments -revenue bonds Interest paid Net cash provided by (used in] capital and related financing activities Cash flows from investing activities Interest received Cash nows from noncapital financing activities Transfers in Transfers (out] CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2018 Business-Type Activities: Ente!Erise Funds Solid Waste Water and DiS(!OS31 Sewer Sanitation Golf Course $ 3, 101,871 $19,995,276 $2,970,093 $ 755,655 (902,799] (7,214,728] (1,313, 103] (386,081] [606,310] [3,951,533] [939,329] [502,013] 18,894 5,101 128,819 1,611,656 81834,116 717,661 [3,620) (2,783,648] [312,009) [52,880) 2,354,809 [585,268) (375,000) (752,342] [705,000] [34,168) [817,579) (409,168) [3,289,028) [312,009) (52,880) 46,505 175,346 10,882 622 [690,000) [3,650,000) [491,500) Net cash provided by [used in] noncapital financing activities (690,000) [3,650,000) [491,500) Net increase [decrease) in cash and cash equivalents 558,993 2,070,434 [I4,966) [55,878) Cash and cash equivalents, January 1 6,515,002 22,115,048 1,568,556 137,273 Prior period adjustment [694,409) Cash and cash equivalents, January 1, restated 5,820,593 22,115,048 1,568,556 137,273 Cash and cash equivalents, December 31 $6,379,586 $ 241185,482 $1,493,590 $ 81,395 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,822,895 $8,749,455 (9,816,711] (7,495,431] [5,999, 185) [297,532) 152,814 73,257 11,159,813 1,029,749 (3, 148,537) 2,354,809 [585,268) (1, 127,342) [705,000] [851,74ZJ [4,063,085) 233,355 25,503 190,000 [4,831,500) [4,831,500] 190,000 2,498,583 1,245,252 30,335,879 3,049,833 [694,409) 29,641,470 3,049,833 $ 32, 140,053 $4,295,085 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2018 Business-Type Activities. Enterprise Funds Total Internal Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Reconciliation of operating [loss) income to net cash provided by [used in) operating activities Operating income [loss) $ 763,289 $ 5,859,137 $586,810 $ (41,813) $ 7,167,423 Adjustments lo reconcile operating income [loss] to net cash provided by (used in] operating activities Depreciation expense 846,019 3,324,365 162,283 35,735 4,368,402 [Increase) decrease in accounts receivable 4,600 [214,490) [35,647] [245,537] [Increase] decrease in inventory [38,509] [7,787] (46,296) [Increase] decrease in deferred outflows 6,593 46,400 10,214 3,995 67,202 Increase [decrease] in accounts payable [642) (255,816] 6,779 9,866 (239,813) Increase [decrease] in retainage payable 216,296 216,296 Increase [decrease) in accrued compensated absences 7,756 602 12,440 6,372 27,170 Increase (decrease) in claims payable Increase [decrease) in net pension liability [22,019) (148,227] (35,024) (13,522) (218,792] Increase [decrease] in net KPERS OPEB obligation 3,230 21,534 5,383 2,154 32,301 Increase [decrease] in net OPEB obligation 2,507 12,934 3,879 1,162 20,482 Increase [decrease) in meter deposits payable 7,744 7,744 Increase [decrease] in deferred inflows 323 2,146 ~ 218 3,231 Net cash provided by [used in) operating activities $ 1,611,656 $ 8,834,116 $ 717,661 $ [3,620) $11,159,813 The notes to the basic financial statements are an integral part of this statement. 29 $ Service Funds 981,913 7,699 53,639 4,554 [16,189) 5,818 2,154 [11,010) 1,076 95 $1,029,749 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2018 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 312,065 $ 312,065 $ 312,065 $ 312,065 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 Comoonent 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, 2018. 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 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469 s. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31, 2018 Total change in unencumbered cash, year ended December 31, 2018 Total cash receipts, year ended December 31, 2018 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building $ Authority (Audited) 1,294,585 121,544 2,417,371 478, 114 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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 .75 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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 2019. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5-15 6-10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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. Temporarv Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, granters, 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: M!jor GO\emmental Funds Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Go"9mmenlal Gowmmental General Com.ention Gas Cepttal lmE!!!?l!!menl ~ Projects 9!!l£!!. ~ ~ Fund Balances: Nonspendable for lmentory s 151,514 $ -$ -s -$ s $ -$ - s s 151,514 Restricted for. Public wor1<s 1,359,237 1,359,237 Public health and sanrtat1on 234 234 Culture and r..:reahon 122,447 122,447 Planning and d<Mlopment 458,382 222,360 680,742 Debi payments 1,851,358 633,653 2,485,011 CommHtedfor Public sllfety 192,399 192,399 CUiture and recreation 475,773 475,773 Plamlng and dewlopment 1,217,966 147,250 1,365,216 Cemetery 508,366 508,366 Capital improwmenta 1,436,972 1,955,918 133,122 1,257,652 4,783,664 Assigned for General go"'mment 20,250 20,250 Public safety 33,216 175,681 208,897 Public wor1<s 9,000 9,000 CuHure and recreation 5,404 150,074 155,478 Cepital lmproleltlents 272,236 173,222 547,352 180,208 1,173,018 Unassigned 6,250,957 ------------(~7.11~----(24,544] 5,399,294 Total Fund Balances ~ ~ ~~ ~~~~ s 3,1161,345 s 19,090,540 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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 2018 budget was amended for the Tourism and Convention Fund, Debt Service Fund and Golf Course Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 91h CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2018 in the Bicentennial Fund, Business Improvement District Fund and Special Parks and Recreation Fund, which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31, 2018, the statutory limit for the City was $146,336,377, providing a debt margin of $78,095,920. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 3. RESTATEMENT OF EQUITY Note 4. A. The City implemented GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the KPERS and health insurance postemployment benefits for the year ended December 31, 2018. Additionally, following the close of the previous fiscal year, it was discovered that several capital assets were misclassified or incorrectly recorded and that a portion of the City's long-term liabilities had been misclassified between funds. According, the beginning net position/fund balances were restated, the effects of which are as follows: Debt Solid Waste Water and Central Governmental Service Disposal Sewer Sanitation Golf Course Garage ~ El!ol1 .Euml El!ol1 .El.!mt El!ol1 Elm!! Net Position/Fund Balance, $ 123,700,850 $ 1,509,863 $ 6,237,212 $ 80,696,866 $ 1,856,553 $ 292,185 $ 10,853 December 31, 2017 Capital Asset Adjustment (382,983] 187,181 (89,654] (2,514] Adoption of GASB 75 1,308,967 19,987 51,123 23,550 4,628 (4,393] Long-term Liablities Adjustment 591,760 694,409 [694,409] 102,649 Net Position/Fund Balance, December 31, 2017, Restated $ 125,218,594 $ 2,204,272 $ 5,562,790 $ 81,037,819 $ 1,790,449 $ 294,299 $ 6,460 DETAILED NOTES ON ALL FUNDS 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, 2018, the City has the following investments: lnwstment Type Fair Value Kansas Municipal lnwstment Pool $ 311,705 S&P AAAf/S1+ Total fair value $ 311,705 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018 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, 2018, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,029,223, $361,543, and $125, 795, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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: Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: aUowance for uncolectibles Total Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for uncolecllbles Total Component Unks Salina Airport Authority Accounts Less. alowance foruncolleclibles Total SaHna Aiport Authority Salina Housing Authority Accounts Less· alowance foruncolleclibles Interest Total Salina Housing Authority Total General $ 6.847,561 9,749,815 298,248 16,895,624 [5,355,282] $ 11,540,342 C. lnterfund Receivables and Payables Tourism and Special Convention Gas $ 457.529 $ 320,324 457,529 320,324 $457,529 $ 320,324 Debt SFH Other Service QaicB Governmental $ $ 494,287 $ 2.428 2,674,390 2,674,390 494,287 2,428 [631] $2,674,390 $ 494,287 $ 1,797 Solid Water Waste and Disposal Sewer Sanitation $ 189,486 $ 3,176,509 $ 472,773 16 169,502 3,176,509 472,773 [1,471,307] [216,981] $ 189,502 $ 1,705,202 $ 253,792 The composition of interfund balances as of December 31, 2018, is as follows: Fund Types Due From Due To General Fund $ 24,544 $ Capital Project Fund 196,939 SFH QalicB Fund 196,939 Police Grants Fund 24,544 $ 221,483 $ 221,483 Subtotal $ 7,801.805 12,744,529 298,248 20,844,582 [5,355,913] $15,488,669 Total $ 11,640,573 12,744,529 298,264 24,683,366 [7,046,201] $ 17,637,165 $ 145,403 145,403 12,901 [790] 437 12,548 $ 157,951 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2018, was as follows: Balance Adj Bal. Balance 12/31/2017 Adjusbnents 12/31/2017 ~ Retirements 12/31/2018 City governmental activities· Governmental actilities Capital assets, not being depreciated Construction in progress $ 28,909,568 $ [203,661] $ 28,705,907 $ 8,876,538 $5,365,238 s 32,217,207 Land 24,092,859 676 24,093,535 24,093,535 Leased land under capital lease 422,799 422,799 Capital assets, being depreciated Infrastructure 199,315,338 [50,398] 199,264,940 5,365,238 204,630, 178 Buildings and improvements 53,009,679 5,179 53,014,858 53,014,858 Vehicles 10,386,499 [105,845] 10,280,654 352,834 442,158 10,191,330 Equipment, furniture and fixtures 6,614,011 79,349 6,693,360 515,538 90,793 7,118,105 Leasehold improvements 326,193 326,193 Total capital assets 322,327 ,954 [274,700] 322,053,254 15,859,140 5,898,189 332,014,205 Less accumulated depreciation for Infrastructure 84,357,444 10,031 84,367,475 3,897,782 88,265,257 Buildings and improvements 19,930,451 3,588 19,934,039 1,321,956 21.255,995 Vehicles 6,866,276 58,203 6,924,479 746,753 437,665 7,233,567 Equipmen~ furniture and fixtures 4,573,829 36,461 4,610,290 224,435 90,793 4,743,932 Total accumulated depreciation 115,728,000 108,283 115,836,283 6,190,926 528,458 121,498,751 Governmental actilities capital assets, net s 206,599,954 $ [382,983] s 206,216,971 s 9,668,214 $5,369,731 s 210,515,454 Business-type actilities: Capital assets, not being depreciated Construction in progress s 2,149,789 $ s 2,149,789 s 2,093,612 s 72,223 s 4,171,178 Land 1,541,806 8,858 1,550,664 509,170 2,059,834 Capital assets, being depreciated Infrastructure 119,457,650 [359,560] 119,098,090 72,223 119,170,313 Buildings and improvements 22,579,933 3 22,579,936 22,579,936 Vehicles 3,690,852 [11,130] 3,679,722 394,676 254,752 3,819,646 Equipmen~ furniture and fixtures 5,337,060 82,139 5,419,199 151,078 5,570,277 Total capital assets 154,757,090 [279,690] 154,4 77 ,400 3,220,759 326,975 157,371,184 Less accumulated depreciation for infrastructure 43,729,964 [358,386] 43,371,578 3,486,539 46,858,117 Buildings and improvements 13,217,925 294 13,218,219 421,287 13,639,506 Vehicles 2,650,242 1,140 2,651,382 215,184 254,752 2,611,814 Equipmen~ furniture and fixtures 3,853,399 [17,755] 3,835,644 245,395 4,081,039 Total accumulated depreciation 63,451,530 [374,707] 63,076,823 4,368,405 254,752 67,190,476 Business-type activities capital assets, net s 91,305,560 s 95,017 s 91,400,577 $[1,147,646] $ 72,223 s 90,180,708 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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 $ 74,669 Public safety 728,118 Public works 4,240,242 Public health 26,959 Culture and recreation 813,760 Planning and development 307,178 Total depreciation $ 6,190,926 Business-type Activities: Solid Waste Disposal $ 846,019 Water and Sewer 3,324,368 Sanitation 162,283 Golf Course Division 35,735 Total depreciation $ 4,368,405 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2018: Restated Balance Balance January 1, December 31, ru.!! Additions Delebons 2018 Governmental acbvities General obligation bonds 56,096.954 $ 2,159,836 $ 6.288,480 $ 51,968,310 Financing lease 157,868 157,868 Loans payable 12,171,090 13,963 12,185,053 Net OPEB habihty 2,932,464 395,831 235,055 3,093,240 Net KPERS OPEB liabiltty 307,478 101,230 25,860 382,848 Net pension l1ablhty 28,966,518 1,047,535 27,918,983 Accrued compensation 2,797,958 1,628,901 1,611,374 2,815,485 Temporary notes 6 811.742 19,508,505 8,196,742 18,123,505 Total $ 110,242,072 $ 23,808,266 $ 17,562,914 $ 116,487,424 Business-type actM!ies: General obligation bonds $ 6,417,784 $ -$ 1,135,206 $ 5,282,578 Revenue bonds 12,606,747 708,696 11,898,051 Loans payable 8,862,810 2,354,809 585,268 10,632,351 Net OPEB liabiltty 373,580 50,427. 29,945 394,062 Net KPERS OPEB habihty 131,n6 43,384 11,082 164.078 Net pension liabttfy 3,333,610 218,792 3,114,818 Accrued compensation 642 347 410,353 383,183 669 517 Total $ 32,368,654 $ 2,858,973 $ 3,072,172 $ 32,1551455 Component Untts· General obligation bonds $ 24,087,000 $ $ 2,660,000 $ 21,427,000 Less unamortized discount (79,485] [15,277] [64,208] Special assessment debt 9.207 2,153 7,054 Net KPERS OPEB obligation 12,054 928 11,126 Net pension liabllrty 603.456 2,174 605,630 T olal component untts $ 24,632.232 $ 2,174 $ 2,647,804 s 21,986,602 44 Amounts Due Within One Year $ 5,877,280 1,611,375 18,123,505 $ 25,612,160 $ 1,166,063 728,696 527,499 383,182 $ 218os,«o $ 1,967,000 2,153 $ 1,969,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal lmpro-.ements 2008B, due 7/1/2028 Internal lmpro-.ements 2009A, due 10/1/2029 Internal lmprowments 2010A, due 10/1/2025 Internal lmprowments 2010B, due 10/1/2023 Internal lmpro-.ements 2011A. due 10/1/2031 Internal lmpro-.ements 2012A, due 10/1/2027 Refunding 2012B, due 10/1/2020 Internal lmpro-.ements 2013A, due 10/1/28 Internal lmpro-.ements 2013B, due 10/1/33 Internal lmprowments 2014A, due 10/1/34 lmprowment and Refunding 2015A, due 10/1/35 Internal lmprowments 2016A, due 10/1/36 Refunding 2016B, due 10/1/2031 Internal lmprowments 2017A, due 10/1/37 Internal lmprowments 2018A, due 10/1/33 Total general obligation bonds Re-.enue Bonds Rewnue 2011, due 10/1/31 Total rewnue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2018-2, due 11/15/2019 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable 45 Original Interest Bonds Issue Rates Outstanding $ 3,525,000 3.65% to 5.00% $ 1,035,000 23,695,000 2.00% to 5.00% 2,981,936 6,916,592 2.00% to 3.875% 655,545 7,973,044 0.50% to 3.00% 1,763,477 6,587,985 2.00% to 5.00% 1,098,449 2,383,903 1.00% to 2.45% 1,506,342 3,817, 108 1.00% to 1.40% 423,027 1,369,380 3.00% to 4.00% 1,001,255 4,485,073 0.60% to 3.65% 3,286,304 7,839,050 2.50% to 3.75% 5,455,241 7,157,688 2.00% to 4.00% 6, 142,786 6,681,766 2.00% to 3.00% 6,160,590 15,141,004 2.00% to 5.00% 14,371,647 9,388,370 3.00% to 3.375% 9,209,452 2,090,000 3.15% to 4.00% 2,159,837 $ 57,250,888 $ 16, 193,925 2.00% to 4.60% $ 11,898,051 $ 11,898,051 $ 4,615,000 13,500,000 $ 9,330,000 4,250,000 12,640,000 1.00% 2.50% 2.12% 2.78% 1.58% $ 4,615,000 13,508,505 $ 18, 123,505 $ 6,771,038 3,861,313 12, 185,053 $ 22,817,404 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 2009B, due 2021 General Obligation 2011A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1, due 2019 General Obligation 2017A, due 2030 General Obligation 2017B, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $6,080,000 11,820,000 3,075,000 657,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 3.04% 3.02% 4.47% Bonds Outstanding $ 1, 185,000 2,885,000 1,740,000 657,000 10, 150,000 4,810,000 33,023 (97,231] 21,362,792 7,054 7,054 $21,369,846 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Go-.emment Bonds Interest Year Outstanding Due Total 2019 $ 7,043,343 $ 1,665,570 $ 8,708,913 2020 4,893,342 1,476,903 6,370,245 2021 4,618,090 1,339,636 5,957,726 2022 4,701,939 1, 186,542 5,888,481 2023 4,541,940 1,011, 191 5,553, 131 2024-2028 17,204,968 3,276,338 20,481,306 2029-2033 9,998,082 1,462,000 11,460,082 2034-2037 4,249,184 276,500 4,525,684 Total $ 57,250,888 $ 11,694,680 $ 68,945,568 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Year 2019 $ 2020 2021 2022 2023 2024 -2028 2029 -2031 Total $ General Obligation -Component Units Bonds Outstanding 1,310,000 $ 1,350,000 1,400,000 1,455,000 1,500,000 8,205,000 5,550,000 20,no.000 $ Interest Due 648,278 612,110 565,880 511,135 464,310 1,616,160 348,263 4,766,136 Total $ 1,958,278 1,962, 110 1,965,880 1,966,135 1,964,310 9,821, 160 5,898,263 $ 25,536, 136 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Rewnue Bonds -Primary Gowrnment Bonds Interest Year Outstandi!!J Due Total 2019 $ 728,696 $ 487,991 $ 1,216,687 2020 748,696 466,242 1,214,938 2021 n3,696 798,696 1,572,392 2022 798,696 414, 148 1,212,844 2023 828,696 382,348 1,211,044 2024-2028 4,688,480 1,376,895 6,065,375 2029-2031 3,331,091 308,750 3,639,841 Total $ 11,898,051 $ 4,235,070 $ 16, 133, 121 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Gowmment Notes Interest Year Outstanding Due Total 2019 $ 18, 123,505 $ 372,400 $ 18,495,905 Total $ 18, 123,505 $ 372,400 $ 18,495,905 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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: Kansas Water Supply Loans -Primary Go..emment Loans Interest Year Outstanding Due Total 2019 $ 2020 2021 2022 2023 2024-2028 2029-2033 2034-2035 527,499 539,863 552,523 565,483 578,754 3, 104, 194 3,486,921 1,277,114 10,632,351 Total -$---=--=---= $ $ 247,835 $ 775,334 235,471 775,334 222,811 775,334 209,851 775,334 196,580 775,334 772,476 3,876,670 389,749 3,876,670 46,434 1,323,548 2,321,207 $ 12,953,558 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2018, 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 XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2018, the note balance was $2,623,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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, 2018, 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, 2018, the note balance was $1,326,000. As of December 31, 2018, the principal balance of these four loans net of $454,947 of unamortized debt issuance costs was $12,185,053. Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2019 $ 2,249 $ 315 $ 2,564 2020 2,350 215 2,565 2021 2,455 110 2,565 Total $ 7,054 $ 640 $ 7,694 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 /ease. 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, 2018, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2018, rental income of $79,912 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, 2018: 2019 $ 130,000 2020 130,000 2021 130,000 2022 130,000 2023 162,500 2024-2028 2,405,000 2029-2033 3,250,000 2034-2038 3,250,000 2039-2043 3,250,000 2044-2046 1,625,000 $ 14,462,500 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. Sa/es 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 ST AR 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 ST AR 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. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 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 ST AR 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). The City's portion of the proceeds from these bond issuances is recorded as a capital contribution in the financial statements. 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, 2018. The future minimum lease payments for the lease are as follows: Year Amount 2019 $ 93,926 2020 93,926 2021 93,926 2022 93,926 2023 93,926 2024-2027 375,708 Total $ 845,338 G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $5,041,500 $ Tourism and conwntion fund Special gas fund 160,000 Sales tax capital fund Debt ser\1ce 2,270,782 Other gowmmental funds 1,354,914 Solid waste disposal fund Water and sewer fund Sanitation fund Central garage fund 190,000 Total Transfers $9,017,196 $ The City uses interfund transfers to share administrative costs between funds. 51 805,000 812,346 2,568,350 690,000 3,650,000 491,500 9,017,196 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31 , 2018 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.39% 20.09% Statutory Employer Capped Rate 8.39% 20.09% Member contribution rates as a percentage of eligible compensation for the fiscal year 2018 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, 2018, 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, 2018. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2018, the City's proportion for the Local employees group was 0.790%, which was a decrease of .021% from its proportion measured at June 30, 2017. At June 30, 2018, the City's proportion for the Police and Firemen group was 2.081 %, which was a decrease of .110% from its proportion measured at June 30, 2017. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2018 and 2017, the City and its component units reported a liability of $31,984,657 and $33,276,991, 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, 2017, which was rolled forward to June 30, 2018, 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 im.estment 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, 2017 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, 2018 are summarized in the following table: Long-Tenn Expected Asset Lorn:i-Tenn Allocation Real Rate of Return Global Equity 47.00% 6.85% Fixed Income 13.00% 1.25% Yield dri1.en 8.00% 6.55% Real Return 11.00% 1.71% Real estate 11.00% 5.05% Altematil.eS 8.00% 9.85% Short-tenn inwstments 2.00% -0.25% ~ 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. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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%) $ 16,154,118 28,531,728 Discount Rate (7.75%) 1% Increase (8.75%) Local $ 11,014,328 $ 6,670,741 Police & Firemen Total 20,019.473 12,892,837 $ 44,685,846 $ 31,033,801 $ 19,563,578 -=--=---moo Pension Expense. For the year ended December 31, 2018, the City recognized Local pension expense of $870,226 and Police and Firemen pension expense of $2,385,738, 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 $31, 100 and $39,859, respectively Deferred Outflows of Resources and Deferred lnffows of Resources. At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Local Differences between actual and expected experience Net differences between projected and actual earnings on in~tments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected experience Net differences between projected and actual earnings on in~tments Changes in assumptions Changes in proportion Total 55 Deferred outflows Deferred inflows of resources of resources $ 39,766 $ 312,097 257,660 476,967 53,041 446,147 435,326 $ 1,220,540 $ 800,464 Deferred outflows Deferred inflows of resources $ 1,223,246 521,008 1,054,212 51,284 of resources $ 92,492 $ 2,849,750 $ 55,255 1,107,361 1,255,108 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued} At December 31, 2018, 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: Local Dtlferences between actual and expected experience Net d11ferences between projected and actual earnings on inwstments Changes in assumptions Changes in proportion Total Housing Authority Airport Authority Deferred out11ows Deferred in11ows Deferred out11ows Deferred inftows of resources $ 1,670 10,829 18,592 1,806 of resources of resources of resources $ 11,937 $ 2,187 $ 17,161 14,168 2,525 26,226 2,916 6,884 55,201 <44,325 ----$ 32,897 $ 21,346 $ 91,182 _s~-64~,40=2 $1,723,207 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, 2019. 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 [lnftows] Outftows [Inflows] Outftows December 31, Amount Amount Total 2019 $ 341,010 $ 985,459 $ 1,326,469 2020 202,538 586, 107 788,645 2021 [100,494) [33,058) [133,552] 2022 [7,653) 64,997 57,344 2023 [15,325) [8,863) [24, 188) Total $ 420,076 $ 1,594,642 $ 2,014,718 $36,221 and $13,417 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, 2019. 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] Outftows December 31 1 Amount Amount Total 2019 $ [2,591) $ 10,978 $ 8,387 2020 11, 125 12,657 23,782 2021 7,101 112 7,213 2022 [4,816) 8,685 3,869 2023 732 948 1,680 Total $ 11,551 $ 33,380 $ 44,931 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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.RC. 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, $183,514 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2018 2017 Unpaid claims, January 1 $ 221,913 $ 255,154 Incurred claims (including IBNRs) 886,086 622,556 Claim payments [869,221) [655,797) Unpaid claims, December 31 $ 238,778 $ 221,913 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: 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2018 2017 $ 395,691 $ 294,333 3,670,930 4,244,648 [3,685,641] [4, 143,290] $ 380,980 $ 395,691 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, 2018. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based .on what it would cost to perform all closure and postclosure care in 2018. 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. 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018. Markley-Magnolia VV Sewer $ 5,150,000 $ 200,790 Cloud from Ohio to Lewe 155,014 69,242 Ninth and Cloud Intersection Realignment 1, 100,000 1,048,542 Bicentennial Center lmprowments 10,200,000 12,344,709 Lakewood Middle School Safe Route 81,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 WaterWell 13 & 14 Maintenance 52,184 50,830 Pawment Condition Surwy 36,222 33,909 Community Fieldhouse 6,937,827 8,727,749 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58,858 Rebuild High Sen.ice Pump P-203 24,187 13,688 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18, 128 2017 Country Club Road lmprowments 1,200,000 1,088,188 Dowtown STAR District 58,000 136, 120 Downtown CID -Alley 2,317 Downtown TIF 2,009 2017 Mill & Inlay 1,577,502 1,574,583 2017 Major Concrete Rehab 469,472 465,748 Downtown Streetscape 12,165,000 3,514,351 Smoky Hill Riwr Renewal 3,200,000 2,632,848 Downtown Santa Fe Water Main Replacement 1,351,100 762,367 S Well Field & WTP Phase 1 1,964,525 1,583,269 2017 Sidewalks 69,092 73,665 Police Training Facility 4,900,000 297,358 Beechcraft Road lmprowments-Airport Authority 1,500,000 12,884 2017 Sanitary Sewer Line Cleaning 519,358 297 Indiana Aw Trail 79,262 74,992 Preliminary Design Broadway lmpr 50,000 50,248 2018 Pawment Sealing 325,000 252,778 Northbound 9th Street Bridge 103,768 92,060 2018 Microsurfacing 750,000 731,987 2018 UBAS 800,000 673,029 2018 Brick Streets 99,243 99,486 2018 Bridge Maintenance 86,520 82,684 2018 Chip Seal/Bituminous 175,000 169,866 2018 Mastic Surface Treatment 30,000 30,305 2018 Mill & Inlay 1,550,000 1,353,589 2018 Minor Concrete Rehab 40,510 40,773 2018 Sidewalks 80,493 83, 114 2018 Traftic Control Main/Street Markings 75,000 56,371 9th Street Kirwin to Crawford 665,752 630,458 2018 Sanitary Sewer Point Repair 50,000 18,859 Landfill Cell #20 Design 60,000 50,714 2018 Park lmprowments 194,000 198 Manhole & Value Adj 10,000 306 Community Theater HVAC Replacement 46,000 207 North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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. 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1 ). Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1 ). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during Q1 2018. The Feasibility Study portion of the CAFO scope of work was also completed during Q1 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work were completed during 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 2019. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. 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 2018, the City did not contribute to the plan. At December 31, 2018, the following employees were covered by the benefit terms: Active employees 441 32 473 Retirees and covered spouses Total The total OPEB liability of $3,487,302 was measured as of December 31, 2017 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 Actuarial cost method Inflation Salary increases Discount rate Healthcare cost trend rates Retiree's share of benefit related costs December 31, 2017 Entry age nonnal as a level percentage of payroll 2.75% 3.50% 3.44% Medical & Phannacy: 6.8% for 2017, decreasing 0.60% per year to an ultimate rate of 5.1 % for 2020 and through 2030 Dental: 5.00% to 2020 100% of the premium 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. 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) Changes in the total OPEB liability are as follows: Balance 1/1/2018 Ser'Jice cost Interest Benefit paid Changes in assumptions Balance 12/31/2018 $ 3,306,044 226,762 128,578 [265,000] 90,918 $ 3,487,302 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: Total OPEB Liability $ 1% Decrease (2.44%) 3,767, 121 $ Discount Rate (3.44%) 3,487,302 $ 1% increase (4.44%) 3,226,016 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: 1% Decrease Total OPEB Liability $ 3,084,533 $ Healthcare Cost Trend Rates 3,487,302 $ 1% increase 3,966,000 For the year ended December 31, 2018, the City recognized OPEB expense of $446,258. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2018, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows of resources Changes of assumptions $ 80,503 -----'--- Total $ 80,503 ======== Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Deferred Year ended [Inflows] Outflows June 30, Amount --- 2019 $ 10,414 2020 10,414 2021 10,414 2022 10,414 2023 10,414 2024+ 28,433 Total $ 80,503 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) 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 651h 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, 2018, the valuation date, the following employees were covered by the benefit terms: Acti..e employees Disabled members Total 282 4 286 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $566,938 reported as of December 31, 2018, was measured as of June 30, 2018, and was determined by an actuarial valuation as of December 31, 2017, which was rolled forward to June 30, 2018, using the following actuarial assumptions: 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Valuation date December 31, 2017 Actuarial cost method Entry age normal Inflation 2. 75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an awrage rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index) 3.87% 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-2016. The actuarial assumptions used in the December 31, 2017 valuation were based on the results of an actuarial experience study for the period of July 1, 2014 through June 30, 2016. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2017 KPERS pension valuation. The changes in the total OPEB liability are as follows: Balance 1/1/2018 Sen.ice cost Interest Effect of economic/demographic gains or losses Changes in assumptions Benefit payments Balance 12/31/2018 Total KPERS OPEB Liability fi!Y Housing Authority Airport Authority Total $ 439,254 $ 7,096 $ 12,054 $ 458,404 52,380 17,061 75,173 (6,574] (30,368] $ 546,926 $ 1,743 252 (205] 8,886 2,825 533 (4,199] (87] $ 11, 126 56,948 17,846 70,974 (6,866] (30,368] $ 566,938 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 (2.87%} (3.87%} (4.87%} Total OPEB Liability -City $ 569,284 $ 546,926 $ 524,594 Total OPES Liability -Housing Authority $ 9,144 $ 8,886 $ 8,588 Total OPEB Liability -Airport Authority $ 11,395 $ 11, 126 $ 10,800 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 $ 546,926 $ 546,926 $ 546,926 Total OPEB Liability -Housing Authority $ 8,886 $ 8,886 $ 8,886 Total OPEB Liability -Airport Authority $ 11, 126 $ 11,126 $ 11, 126 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, 2018, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: City Housing Authority Airport Authority Deferred Deferred Deferred Deferred Outllows of lnftows of Resources Resources lnftows of Resources Inflows of Resources Differences between expected and actual experience $ 67,415 $ - $ - $ 3,766 Changes of assumptions 13,271 184 198 Total $ 67,415 $ 13,271 $ 184 $ 3,964 $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 2019 $ (6, 120] $ (21] $ [458] 2020 [6,120] [21] (458] 2021 [6,120] (21] [458] 2022 [6, 120] (21] [458] 2023 [6, 120] (21] [458] Thereafter [23,544] (79] [1,674] Total $(54, 144] $ [184] $ [3,964] K. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $(24,544] at December 31, 2018. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements In 2018, 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. Ad Valorem Property Tax Abatements Company Salina Vortex Corp (facility improvements) Great Plains Mfg (facility improvements) Veris Technologies (facility addition/improvements) Twin Oaks (facility addition/improvements) Salina Field House (facility) Total Abatement Start £m1 2015 2024 2014 2023 2015 2024 2015 2024 2017 2026 % 75% 100% 40.5% 55% 100% 2018 Tax Abated $ 15,432 4,808 1,525 1,838 58,518 $ 82,120 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements (Continued) TIF Project Plans District Lambertz Total Purpose Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and private infrastructure Base Year Expires 2007 2027 2018 Reimbursements Sales Tax Property Tax $ 212,624 $ 217,595 $ 212,624 $ 217,595 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 Community Improvement District (CID) Start Expires Purpose 2018 Eligible Reimbursement Amount* Assist with improvements to hotel South 9th Street Total 2.00% 3/1/2016 12/31/2037 and conference center $ 260,274 $ 260,274 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements (Continued) Property/Business Name Serio Guzman James M. Monroe Christina Litwiller Jeremy Cessna William & Mary Warhurst Holly Fain Arlene Cox Gloria Williams Michelle Rogan Samuel A. Rock Jessica A. Ziegler Devin or Jessica Know Ravey Investments LLC Lamont Outland Michelle Bunch Jermaine and Tykea Polk Mary Marshall Angela Fishburn Kress Building LLC Heritage at Hawthorne Partners, LLC Will & Mary Warhurst Donnie & Ramona Marrs TJTM, Inc. TroyValcil Michelle Malone Timothy & Linda Rickman Yvette Gelinas Charles H Carroll Jr Trust Latisha Pierce Tanya Shiehzadeh Robert & Brenda Burns Property Partners LLC Phill Hemmer AP Property Holdings, LLC Gregory Davis Micheal Money Traniesh Byrd Mark Martin Living Trust Philip C Krug Living Trust Jana Endsley Kanesha Samilton Maria E Padilla Kansas Property Investors, LLC, JK Webb Properties LLC Alan and Nancy Franzen Brandon Sears Santa Fe Properties, LLC Rusty A Leister Living Trust Heritage at Hawthorne Partners II, LLC. Greg Huston & Terry A Swearingen Total Neighborhood Revitalization Act (NRA) Address 241 N. Front Street 620 W. Hamilton Street 148 N. 12th Street 219 N. Front Street 714 Park Street 204 Forest Avenue 200 Forest Avenue 903 N. 10th Street 240 S. Clark Street 1329 N. 4th Street 221 N. 2nd Street 207 N. Penn 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash 1206 N. 7th Street 634 N. 8th Street 226 N. 2nd Street 937 N. 3rd Street 1219 N. 8th Street 134 S. Santa Fe Ave 715 N. 9th Street 809 w. Ash 2035 E. Iron #JOOR 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001 R/002R/003R/004R/005R 853 Navaho 815 N. 2nd Street 719 E. Ash 1115 N. 8th Street 156-158 S. Santa Fe 705 N. 2nd Street 703 N. 2nd Street 1205 N. 4th Street 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) 2035 E. Iron Avenue, Unit #203R 201 E. Iron Avenue 156-158 N. 11th Street 2035 E. Iron Avenue, Unit #206R 701 N. 2nd Street 2035 E. Iron #104R 2035 E Iron #304R 1321 N. 3rd Street 214 W. Grand Avenue 810 N. 5th Street 230 S. Broadway Blvd 120 S. Santa Fe Avenue 1413 Arapahoe 900 N. 12th Street 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue 600 N. Santa Fe Avenue 715 N. 9th Street, Phase II 1025 w Crawtord Street 69 2018 Ill!! Rebate Paid Res $ 257 Res 571 Res 348 Res 323 Res 258 Res 474 Res 476 Res 358 Res 478 Res 92 Res 478 Res 658 Com 2,492 Res 408 Res 419 Res 518 Res 399 Res 384 Com 2,592 Com 4,605 Res 822 Res 992 Res 18,739 Res 259 Res 46 Res 642 Res 621 Com 12,456 Res 1,158 Res 924 Res 807 Com 6,055 Res 15,392 Com 46,159 Res 2,455 Res 4,217 Res 791 Com 1,730 Res 3,777 Res 815 Res 978 Res 1,332 Com 13,061 Com 6,074 Res 865 Res 182 Com 15,462 Com 11,334 Com 8,116 Res 3,867 $ 1961714 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) M. Subsequent Events On April 16, 2019, the City was issued two Kansas Public Water Supply Loans in the amounts of $4,250,000 and $32,000,000, respectively. For both loans, the City will make the first payment on August 1, 2020 and the last payment on February 1, 2040. Both loans have interest rates of 2.33%. On April 24, 2019, the City issued Series 2019-A general obligation internal improvement bonds in the amounts of $11,090,000. The bonds will be used to partially retire Temporary Note 2018-2 that matures November 1, 2019 and to finance various capital projects. The City will make the first payment on the bonds on April 1, 2020 and the last payment on October 1, 2039. The interest rate on the bonds ranges from 3.00% to4.00%. On April 24, 2019, the City issued Series 2019-1 temporary notes in the amounts of $6,085,000. The temporary notes will be used to finance various capital projects. The maturity date of the temporary notes is May 1, 2020 and the interest rate on the notes is 1.58%. 70 REQUIRED SUPPLEMENTARY INFORMATION 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 Service cost Interest Benefit paid Changes in assumptions Net change in total OPEB liability Total OPEB liability -beginning Total OPEB liability -ending Co-.ered payroll Total OPEB liability as a percentage of co-.ered-employee payroll Actuarially determined contribution Actual contribution Contributions as a percentage of co-.ered payroll * -Data became a\0ilable with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 71 2018 $ 226,762 128,578 [265,000] 90,918 181,258 3,306,044 $ 3,487,302 $ 24,740,225 14.10% $ 265,000 $ 265,000 1.07% 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 Sennce cost Interest Effect of economic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Net change in total OPEB liability Total OPEB liability -beginning Total OPEB liability -ending Co-.ered payroll Total OPEB liability as a percentage of co-.ered-employee payroll Actuarially determined contribution Actual contribution Contributions as a percentage of co-.ered payroll * -Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 2018 $ 52,380 17,061 75, 173 [6,574] [30,368] 107,672 439,254 $ 546,926 $ 13,652, 194 4.01% $ 109,466 $ 109,466 0.80% 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 Local Firemen Local Firemen Local Firemen 12131/15 12131/15 12131/16 12131/16 1m1ill 1m1ill City's proportion of the net pension liability 0.764% 2.258% 0.761% 2.180% 0.811% 2.191% City's proportionate share of the net pension liability s 10,027,679 s 16,395,794 s 11, 770,699 $20,251,512 s 11,753,246 $20,546,882 City's co-.ered-employee payroll $12,931,197 $10,161,866 $13,251,236 $10,730,033 $13,548,056 $10,593,419 City's proportionate share of the net pension liability as a percentage of its co...ered-employee payroll 77.55% Plan fiduciary net position as a percentage d the total pension liability 71.98% •.The amounts presented for each fiscal year were determined as of 12131. Data became available with the inception ofGASB 68 during fiscal year 2015, therebre 10 years of data is unawilable. 161.35% 74.80% 88.83% 188.74% 86.75% 193.96% 68.55% 69.30% 72.15% 70.99% Schedule of the City's Contributions Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency [excess] City's co\€red-employee payroll Contributions as a percentage of co\€red employee payroll Local 12/31/15 $ 1,256,217 1,256,217 $ $13,251 ,236 9.48% • -Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Last Ten Fiscal Years* Police and Police and Firemen Local Firemen 12/31/15 12131/16 12131/16 $ 2,527,995 $ 1,243,711 $ 2,361 ,273 2,527,995 1,243,711 2,361,273 $ $ $10,730,033 $13,548,056 $ 10,593,419 23.56% 9.18% 22.29% 73 Police and Local Firemen 12131/17 12131/17 $ 1,179,745 $ 1,986,933 1, 179,745 1,986,933 $ $13,944,989 $10,441,055 8.46% 19.03% Police and Local Firemen 12131/18 .!.m.!L1§ 0.790% 2.081% s 11,014,328 $20,019,473 $13,944,989 $10,441,055 78.98% 191.74% 74.22% 71 .53% Police and Local Firemen 12/31/18 12131/18 $ 1,205,334 $ 2,181,617 1,205,334 2,181,617 $ $ $14,366,294 $10,859,219 8.39% 20.09% [THIS PAGE INTENTIONALLY LEFfBLANK) COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 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 9lh 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. 74 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 year2076. 75 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2018 Total Total Non major Non major Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 2,885,257 $ 514,201 $ 633,653 Receivables Accounts 1,797 Total assets $ 2,887,054 $ 514,201 $ 633,653 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 149,019 $ -$ - Due to other funds 24,544 Total liabilities 173,563 Fund balances: Restricted 345,041 633,653 Committed 2,067,239 514,201 Assigned 325,755 Unassigned [24,544) Total fund balances 2,713,491 514,201 633,653 Total liabilities and fund balances $ 2,887,054 $ 514,201 $ 633,653 See independent auditor's report on the financial statements. 76 Total Nonmajor Governmental Funds $ 4,033,111 1,797 $ 4,034,908 $ 149,019 24,544 173,563 978,694 2,581,440 325,755 [24,544) 3,861,345 $ 4,034,908 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2018 Total Total Non major Non major Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 713,282 $ -$ - Intergovernmental 807,067 475,503 Charges for services 469,969 9,260 Licenses and permits 2,500 Investment revenue 18,110 3,283 14,797 Donations 237,660 Miscellaneous 55,048 Total revenues 2,303,636 12,543 490,300 EXPENDITURES Current Culture and recreation 1,760,504 Public safety 343,811 Public health and sanitation 442,359 Planning and development 641,823 Miscellaneous 35 Debt service Principal retirement 810,000 Interest and other charges 84,535 Capital outlay 569,901 Total expenditures 3,758,398 35 894,535 Excess [deficiency] of revenues over [under] expenditures [1,454, 762] 12,508 [404,235] Other financing sources [uses] Transfers in 1,354,914 Total other financing sources [uses] 1,354,914 Net change in fund balance [99,848] 12,508 [404,235] Fund balance -Beginning of year 2,813,339 501,693 1,037,888 Fund balance -End of year $ 2,713,491 $ 514,201 $ 633,653 See independent auditor's report on the financial statements. 77 Total Non major Governmental Funds $ 713,282 1,282,570 479,229 2,500 36,190 237,660 55,048 2,806,479 1,760,504 343,811 442,359 641,823 35 810,000 84,535 569,901 4,652,968 [1,846,489] 1,354,914 1,354,914 [491,575] 4,352,920 $ 31861,345 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit] Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2018 Business Bicentennial Improvement Neighborhood Center District Park $ 154,748 $ 24,964 $ 24,251 1,797 $ 154,748 $ 26,761 $ 24,251 $ 57,067 $ 18,803 $ - 57,067 18,803 7,958 97,681 24,251 97,681 7,958 24,251 $ 154,748 $ 26,761 $ 24,251 Special Parks & Special Recreation Alcohol $ 272,521 $ 234 $ 272,521 $ 234 $ -$ 122,447 234 150,074 272,521 234 $ 272,521 $ 234 Community Sales Tax Downtown Development Economic TIF Revolving Develo12ment District #1 $ 186,307 $ 902,997 $ 237,956 $ $ 186,307 $ 902,997 $ 237,956 $ $ - $ 5,512 $ - $ 5,512 186,307 897,485 237,956 186,307 897,485 237,956 $ 186,307 $ 902,997 $ 237,956 $ South 9th CID 46,548 $ 46,548 $ 45,301 $ 45,301 1,247 1,247 46,548 $ State 911 Grants Communications 8,013 $ 8,013 $ - $ 8,013 8,013 372,254 372,254 15,693 15,693 180,880 175,681 356,561 8,013 _$ ___ 31_2_.2_54_ See independent auditor's report on the financial statements. 78 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2018 Kenwood Special Cove Law Police Capital Enforcement Grants $ 108,313 $ 82 $ $ 108,313 $ 82 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,564 $ -$ - Due to other funds 24,544 Total liabilities 1,564 24,544 Fund balance: Restricted Committed 106,749 82 Assigned Unassigned [24,544) Total fund balance [deficit] 106 749 82 [24,544) Total liabilities and fund balances $ 108,313 $ 82 $ - Federal DARE Grants Donations $ 3,325 $ 26,616 $ 3,325 $ 26,616 $ -$ 1,298 1,298 3,325 25,318 3,325 25,318 $ 3,325 $ 26,616 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 31,959 $ 3,108 $ 26,141 $ 99 $ 14,215 $ 1,954 $ 438,652 $ 2,885,257 1,797 $ 31,959 $ 3,108 $ 26,141 $ 99 $ 14,215 $ 1,954 $ 438,652 $ 2,887,054 $ 1,542 $ 1,402 $ - $ - $ - $ - $ 837 $ 149,019 24,544 1,542 1,402 30,417 1,706 30,417 1,706 $ 31,959 $ 3,108 26,141 1,954 99 14,215 26,141 99 14,215 1,954 $ 26,141 $ 99 $ 14,215 $ 1,954 See independent auditor's report on the financial statements. 79 837 173,563 345,041 437,815 2,067,239 325,755 [24,544) 437,815 2,713,491 $ 438,652 $ 2,887,054 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2018 Business Bicentennial Improvement Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 84,870 Licenses and permits 2,500 Investment revenue 1,105 145 152 Donations Miscellaneous Total Revenues 1,105 85,015 2,652 Expenditures Current Culture and recreation 762,968 Public safety Public health and sanitation Planning and development 93,225 Capital outlay Total Expenditures 762,968 93,225 Excess (deficiency] of revenues over (under] expenditures [761,863] [8,210] 2,652 Other financing sources [uses] Transfers in 801,564 Total other financing sources [uses] 801.564 Net change in fund balance 39,701 (8,210] 2,652 Fund balance, beginning of year 57,980 16,168 21,599 Fund balance, end of year $ 97,681 $ 7,958 $ 24,251 Special Parks & Special Recreation Alcohol $ -$ 191,676 191,676 1,533 70 193,209 191,746 191,676 44,909 44,909 191,676 148,300 70 148,300 70 124,221 164 $ 272,521 $ 234 Community Development $ Revolving - 1,195 1,195 1,195 1,195 185,112 Sales Tax Economic Development $ 347,167 5,800 352,967 457,585 457,585 [104,618] (104,618] 1,002, 103 $ Downtown TIF District #1 134,867 1,458 136,325 136,325 136,325 101,631 $ South 9th CID 231,248 248 14,953 246,449 536,053 536,053 [289,604] (289,604] 290,851 $ State Grants - 9,000 57 9,057 7,480 7,480 1,577 1,577 6,436 911 Communications $ 332,898 2,246 335,144 343,811 343,811 [8,667] (8,667] 365,228 $ 186,307 $ 897,485 $ 237,956 $ 1,247 $ 8,013 ..,$ __ 3_5_6 ..... 5_6_1 See independent auditor's report on the financial statements. 80 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, 2018 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 6,817 Charges for services Licenses and permits Investment revenue 656 Donations Miscellaneous Total Revenues 656 6,817 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 56,420 3,507 Total Expenditures 56,420 3,507 Excess (deficiency) of revenues over [under] expenditures [55,764) 3,310 Other financing sources (uses] Transfers in 68,350 Total other financing sources (uses) 68,350 Net change in fund balance 12,586 3,310 Fund balance, beginning of year 94,163 81 (27,854) $ Fund balance, end of year $106,749 $ 82 $ [24,544J $ Federal DARE Grants Donations -$ 21 132 19,142 21 19,274 12,545 12,545 21 6,729 21 6,729 3,304 18,589 3,325 $ 25,318 War Memorial Maintenance $ - 206 206 1,855 1,855 [1,649) [1,649) 32,066 $ 30,417 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ $ -$ -$ -$ -$ - 385,099 127 168 1 86 13 21,848 2,689 [3,584) 407,074 168 2,775 [3,571] 995,681 995,681 [588,607) 168 2,775 [3,571] 485,000 485.000 [103,607) 168 2,775 [3,571) 105,313 25,973 98 11,440 5,525 1,706 $ 26,141 $ 99 $ 14,215 $ 1,954 See independent auditor's report on the financial statements. 81 Animal Shelter Donations Totals $ -$ 713,282 75,000 807,067 469,969 2,500 2,690 18,110 237,660 237,660 55,048 315,350 2,303,636 1,760,504 343,811 250,683 442,359 641,823 569,901 250,683 3,758,398 64,667 [1,454,762) 1,354,914 1 .354.914 64,667 [99,848] 373,148 2,813,339 $437,815 $ 2,713,491 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December 31, 2018 Cemetery Endowment Mausoleum Tricentennial Endowment Commission Total $ 506,324 $ 2,042 ..:...$ __ 5'-'-,8""-'3....;..5 $ 514,201 $ 506,324 $ 2,042 .;;..$ _ __;5;.:.,8;;.;;3;..;;.5 $ 514,201 506,324 2,042 5,835 514,201 $ 506,324 $ 2,042 .;;..$ __ 5;..:.,8-3-.5 $ 514,201 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2018 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 9,260 $ -$ Investment revenue 3,233 13 Total revenues 12,493 13 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,458 13 Fund balances -beginning of year 493,866 2,029 Fund balances -end of year $ 506,324 $ 2,042 $ See independent auditor's report on the financial statements. 83 - 37 37 37 5,798 5,835 Total $ 9,260 3,283 12,543 35 35 12,508 501,693 $ 514,201 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2018 Budgeted Amounts Actual Original Revenues Investment revenue $ 1,105 $ -$ Total revenues 1,105 Expenditures Culture and recreation 762,968 762,332 Total expenditures 762,968 762,332 Excess [deficiency] of revenues over [under] expenditures [761,863] [762,332] Other financing sources [uses] Transfers in 801,564 700,000 Total other financing sources [uses] 801,564 700,000 Excess (deficiency] of revenues and other sources over [under] expenditures and other [uses] 39,701 (62,332] Unreserved fund balance, January 1 57,980 74,481 Unreserved fund balance/GMP fund balance December 31 $ 97,681 $ 12, 149 $ See independent auditor's report on the financial statements. 84 Final - 762,332 762,332 [762,332] 700,000 700,000 (62,332) 74,481 12,149 Variance with Final Budget Positive (Negative] $ 1,105 1,105 [636] [636] 469 101,564 101,564 102,033 [16,501] $ 85,532 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 85,937 $ 89,175 $ Investment revenue 145 15 Total revenues 86,082 89,190 Expenditures Planning and development 93,225 89,190 Total expenditures 93,225 89,190 Excess [deficiency) of revenues over [under] expenditures [7, 143) Unreserved fund balance, January 1 13,304 18,182 Unreserved fund balance, December 31 6,161 $ 18,182 $ Reconciliation to GAAP Accounts receivable 1,797 GAAP Fund Balance, December 31 $ 7,958 See independent auditor's report on the financial statements. 85 Final 89,175 15 89,190 89,190 89,190 18,182 18,182 Variance with Final Budget Positive [Negative] $ [3,238) 130 [3,108) (4,035) (4,035] [7, 143) [4,878] $ [12,021] 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, 2018 Budgeted Amounts Actual Original Revenues Licenses and permits $ 2,500 $ 10,000 $ Investment revenue 152 500 Total revenues 2,652 10,500 Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures 2,652 10,500 Unreserved fund balance, January 1 21,599 4,873 Unreserved fund balance/GAAP fund balance December 31 $ 24,251 $ 15,373 $ See independent auditor's report on the financial statements. 86 Final 10,000 500 10,500 10,500 4,873 15,373 Variance with Final Budget Positive [Negative] $ (7,500) (348] [7,848) (7,848) 16,726 $ 8,878 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, 2018 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 191,676 $ 189,192 $ Investment revenue 1,533 1,000 Total revenues 193,209 190,192 Expenditures Capital outlay 194,983 194,000 Total expenditures 194,983 194,000 Excess [deficiency] of revenues over [under] expenditures [1,774] [3,808] Unreserved fund balance, January 1 124,221 115,137 Unreserved fund balance, December 31 122,447 $ 111,329 $ Reconciliation to GAAP Current year encumbrances 150,074 GAAP Fund Balance, December 31 $ 272,521 See independent auditor's report on the financial statements. 87 189,192 1,000 190,192 194,000 194,000 [3,808] 115,137 111,329 Variance with Final Budget Positive [Negative] $ 2,484 533 3,017 [983] [983] 2,034 9,084 $ 11,118 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, 2018 Budgeted Amounts Actual Original Revenues Intergovernmental $ 191,676 $ 216,086 $ Investment revenue 70 Total revenues 191,746 216,086 Expenditures Public health and sanitation 191,676 216,086 Total expenditures 191,676 216,086 Excess [deficiency] of revenues over [under] expenditures 70 Unreserved fund balance, January 1 164 34,899 Unreserved fund balance/GAAP fund balance December 31 $ 234 $ 34,899 $ See independent auditor's report on the financial statements. 88 Final 216,086 216,086 216,086 216,086 34,899 34,899 Variance with Final Budget Positive [Negative] $ [24,410) 70 [24,340) 24,410 24,410 70 [34,735) $ [34,665) Revenues Taxes Investment revenue Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2018 Budgeted Amounts Actual Original Final $ 347,167 $ 332,818 $ 332,818 5,800 2,000 2,000 352,967 334,818 334,818 457,585 458,840 458,840 457,585 458,840 458,840 Excess [deficiency) of revenues over [under] expenditures [104,618) [124,022) Unreserved fund balance, January 1 1,002,103 667,262 Unreserved fund balance/GAAP fund balance December 31 $ 897,485 $ 543,240 $ See independent auditor's report on the financial statements. 89 [124,022) 667,262 543,240 Variance with Final Budget Positive [Negative] $ 14,349 3,800 18, 149 1,255 1,255 19,404 334,841 $ 354,245 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 385,099 $ 347,200 $ Investment revenue 127 2,000 Miscellaneous 21,848 133,650 Total revenues 407,074 482,850 Expenditures Culture and recreation 995,681 1,048,635 Total expenditures 995,681 1,048,635 Excess [deficiency] of revenues over [under] expenditures [588,607] [565,785] Other financing sources [uses] Transfers in 485,000 525,000 Total other financing sources [uses] 485,000 525,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [103,607] [40,785] Unreserved fund balance, January 1 105,313 190,338 Unreserved fund balance/GAAP fund balance December 31 $ 1,706 $ 149,553 $ See independent auditor's report on the financial statements. 90 Final 347,200 2,000 133,650 482,850 1,048,635 1,048,635 [565,785] 525,000 525,000 [40,785] 190,338 149,553 Variance with Final Budget Positive [Negative] $ 37,899 [1,873] [111,802] [75,776] 52,954 52,954 [22,822] [40,000] [40,000] [62,822] [85,025] $ [147,847) 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 , 2018 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,394,142 $ 2,674,498 Delinquent taxes 62,732 55,000 Motor vehicle taxes 305,481 296,922 Special assessments 1,545,758 1,620,000 Investment revenue 21,230 Miscellaneous 58,932 Total revenues 4,329,343 4,705,352 Expenditures Debt Service Principal retirement 5,252,865 5,057,920 Interest and other charges 1,702,255 2,086,687 Total expenditures 6,955,120 7,144,607 Excess [deficiency] of revenues over [under] expenditures [2,625,777) [2,439,255) Other financing sources [uses] Transfers in 2,270,782 2,000,000 Total other financing sources [uses] 2,270,782 2,000,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [354,995) [439,255) Unreserved fund balance, January 1 1,462,554 814,255 Prior period adjustment 694,409 Unreserved fund balance, January 1, restated 2,156,963 814,255 Unreserved fund balance, December 31 1,801,968 $ 375,000 Reconciliation to GAAP Taxes receivable 2,674,390 Deferred revenue [2,625,000) GAAP Fund Balance, December 31 $ 1,851,358 See independent auditor's report on the financial statements. 91 Final $ 2,744,775 62,732 305,480 1,546,859 4,659,846 5,494,365 1,688,616 7,182,981 [2,523, 135] 2,000,000 2,000,000 [523,135) 1,195,141 1,195,141 $ 672,006 Variance with Final Budget Positive [Negative] $ [350,633] 1 [1, 101] 21,230 [330,503) 241,500 [13,639] 227,861 (102,642] 270,782 270,782 168,140 267,413 694,409 961,822 $ 1,129,962 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND Forthe Year Ended December 31, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 3,101,872 $ 2,844,000 Investment revenue 31,711 4,000 Miscellaneous 18,894 49,310 Total revenues 3,152,477 2,897,310 Expenditures Public works 1,893,824 1,698,164 Total expenditures 1,893,824 1,698,164 Excess [deficiency] of revenues over [under] expenditures 1,258,653 1,199,146 Other financing sources [uses] Transfers [out] [690,000) [1, 175,000) Total other financing sources (uses] [690,000) [1, 175,000) Excess (deficiency] of revenues and other sources over (under] expenditures and other [uses] 568,653 24,146 Unreserved fund balances, January 1 3,880,930 3,107,520 Prior period adjustment [694,409] Prior year cancelled encumbrances 249,242 Unreserved fund balances, December 31 $ 41004,416 $ 3,131,666 See independent auditor's report on the financial statements. 92 Final $ 2,844,000 4,000 49,310 2,897,310 1,698,164 1,698,164 1,199,146 [1, 175,000) [1, 175,000) 24,146 3,107,520 $ 3, 131,666 Variance with Final Budget Positive [Negative] $ 257,872 27,711 [30,416] 255,167 [195,660) [195,660) 59,507 485,000 485,000 544,507 773,410 (694,409] 249,242 $ 872,750 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 20,205,846 $ 20,469,600 Investment revenue 97,347 25,000 Miscellaneous 5,101 10,000 Total revenues 20,308,294 20,504,600 Expenditures Public works 10,965,681 14,491,199 Total expenditures 10,965,681 14,491,199 Excess [deficiency] of revenues over [under] expenditures 9,342,613 6,013,401 Other financing sources [uses] Transfers in 122,200 Transfers [out] [6,266,000) [6,850,000) Total other financing sources [uses] (6,266,000) (6,727,800) Excess [deficiency) of revenues and other sources over [under] expenditures and other [uses) 3,076,613 [714,399) Unreserved fund balances, January 1 11,301,601 12,691,809 Prior period adjustment [2, 116,375] Prior year cancelled encumbrances 21,352 Unreserved fund balances, December 31 $ 12,283,191 $ 11,977,410 See independent auditor's report on the financial statements. 93 Final $ 20,469,600 25,000 10,000 20,504,600 14,491,199 14,491,199 6,013,401 122,200 (6,850,000) (6,727,800) [714,399] 12,691,809 $ 11,977,410 Variance with Final Budget Positive [Negative] $ [263,754] 72,347 (4,899] [196,306) 3,525,518 3,525,518 3,329,212 [122,200) 584,000 461,800 3,791,012 [1,390,208] [2, 116,375] 21,352 $ 305,781 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GMP BASIS) SANITATION FUND For the Year Ended December 31, 2018 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,941,279 $ 3,048,426 $ 3,048,426 Investment revenue 10,882 2,500 2,500 Total revenues 2,952, 161 3,050,926 3,050,926 Expenditures Public works 2,542,409 2,472,097 2,472,097 Total expenditures 2,542,409 2,472,097 2,472,097 Excess [deficiency] of revenues over [under] expenditures 409,752 578,829 578,829 Other financing sources [uses] Transfers [out] [491,500) [411,500] [411,500) Total other financing sources [uses] [491,500) [411,500) [411,500) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [81,748) 167,329 167,329 Unreserved fund balance, January 1 1,544,357 1,191,230 1,191,230 Prior year cancelled encumbrances 5,525 Unreserved fund balances, December 31 $ 1,468,134 $ 1,358,559 $ 1,358,559 See independent auditor's report on the financial statements. 94 Variance with Final Budget Positive [Negative] $ [107,147] 8,382 (98,765) (70,312) (70,312) (169,077) [80,000) [80,000) [249,077] 353,127 5,525 $ 109,575 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 755,270 $ 825,900 $ Investment revenue 545 Miscellaneous 129,204 50,000 Total revenues 885,019 875,900 Expenditures Recreation 950,840 838,456 Total expenditures 950,840 838,456 Excess [deficiency] of revenues over [under] expenditures [65,821] 37,444 Other financing sources [uses] Transfers [out] [25,000] Total other financing sources [uses] [25,000] Excess [deficiency) of revenues and other sources over [under] expenditures and other [uses] [65,821) 12,444 Unreserved fund balance, January 1 116,032 133,136 Unreserved fund balances, December 31 $ 50,211 $ 145,580 $ See independent auditor's report on the financial statements. 95 Final 761,000 79,840 840,840 954,700 954,700 [113,860] [113,860] 116,032 2,172 Variance with Final Budget Positive [Negative] $ [5,730] 545 49,364 44,179 3,860 3,860 48,039 48,039 $ 48,039 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 408,974 $ 250,000 $ Investment revenue 6,315 2,500 Miscellaneous 6,854 Total revenues 422,143 252,500 Expenditures General government 254,669 281,306 Total expenditures 254,669 281,306 Excess [deficiency] of revenues over [under] expenditures 167,474 [28,806) Unreserved fund balance, January 1 919,375 862,316 Unreserved fund balances, December 31 $ 1,086,849 $ 833,510 $ See independent auditor's report on the financial statements. 96 Final 250,000 2,500 252,500 281,306 281,306 [28,806) 862,316 833,510 Variance with Final Budget Positive [Negative] $ 158,974 3,815 6,854 169,643 26,637 26,637 196,280 57,059 $ 253,339 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, 2018 Budgeted Amounts Actual Original Final Revenues Charges for services $ 7,010,936 $ 7,044,200 $ 7,044,200 Investment revenue 18,520 5,000 5,000 Miscellaneous 60,258 5,000 5,000 Total revenues 7,089,714 7,054,200 7,054,200 Expenditures General government 6,028,279 6,402,432 6,402,432 Total expenditures 6,028,279 6,402,432 6,402,432 Excess [deficiency] of revenues over [under] expenditures 1,061,435 651,768 651,768 Unreserved fund balance, January 1 2,050,972 3,086,108 3,086,108 Unreserved fund balances, December 31 $ 3,112,407 $ 3,737,876 $ 3,737,876 See independent auditor's report on the financial statements. 97 Variance with Final Budget Positive [Negative] $ [33,264) 13,520 55,258 35,514 374,153 374,153 409,667 (1,035,136) $ [625,469) Revenues 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, 2018 Budgeted Amounts Original Final Variance with Final Budget Positive [Neaative] Charges for services Investment revenue Miscellaneous $ 1,327 ,390 $ 668 6,146 - $ 40 17,500 - $ 1,327 ,390 Total revenues Expenditures General government Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 Unreserved fund balance, December 31 1,334,204 1,491,671 1,491,671 [157,467] 190,000 190,000 32,533 21,595 $ 54,128 $ 40 628 17 ,500 [11,354] 17,540 17,540 1,316,664 1,435,015 1,435,015 [56,656] 1,435,015 1,435,015 [56,656] [1,417,475] [1,417,475] 1,260,008 1,416,850 1,416,850 [1,226,850] 1,416,850 1,416,850 [1,226,850] [625] [625] 33,158 734 734 20,861 109 $ 109 $ 54,019 ----...-..,,;~- See independent auditor's report on the financial statements. 98 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. 99 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December31, 2018 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 1,087,616 $ 3,112,407 Inventory and prepaid supplies Total current assets 1,087,616 3, 112,407 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 1,087,616 3,112,407 Deferred outflows of resources: KPERS OPEB deferred outflows of resources Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 1,087,616 $ 3, 112,407 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 767 $ - Current portion of compensated absences payable Current portion of accrued claims payable 183,514 380,980 Total current liabilities (payable from current assets) 184,281 380,980 Noncurrent liabilities: Compensated absences payable Accrued claims payable 55,264 Net KPERS OPEB obligation Net pension liability Total noncurrent liabilities 55,264 Total liabilities 239,545 380,980 Deferred inflows of resources KPERS OPEB deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 239,545 $ 380,980 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 848,071 2,731,427 Total net position $ 848,071 $2,731,427 See independent auditor's report on the financial statements. 100 Total Internal Central Service Garage Funds $ 95,062 $4,295,085 111,486 111,486 206,548 4,406,571 168,234 168,234 152,573 152,573 15,661 15,661 222,209 4,422,232 1,401 1,401 25,285 25,285 26,686 26,686 $248,895 $4,448,918 $ 40,934 $ 41,701 33,989 33,989 564,494 74,923 640, 184 25,399 25,399 55,264 5,469 5,469 154,549 154,549 185,417 240,681 260,340 880,865 133 133 11,300 11,300 11,433 11,433 $ 271,773 $ 892,298 $ 15,661 $ 15,661 [381539) 3,540,959 $ (22,878) $ 3,556,620 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2018 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 408,974 $ 7,010,936 $ 1,327,390 Miscellaneous 6,855 60,258 6,145 Total operating revenues 415,829 7,071,194 1,333,535 Operating expenses General government 271,535 6,013,569 1,545,842 Depreciation 7,699 Total operating expenses 271,535 6,013,569 1,553,541 Operating income [loss] 144,294 1 ,057,625 [220,006) Nonoperating revenues [expenses] Investment revenue 6,315 18,520 668 Total other operating revenues [expenses] 6,315 18,520 668 Income [loss] before transfers 150,609 1,076,145 [219,338] Transfers from [to] other funds Transfers in 190,000 Total transfers 190,000 Change in net position 150,609 1,076,145 (29,338) Net position, January 1 697,462 1,655,282 10,853 Prior period adjustment [4,393] Net position, January 1, restated 697,462 1,655,282 6,460 Net position, December 31 $ 848,071 $ 2,731,427 $ [22,878J See independent auditor's report on the financial statements. 101 Total Internal Service Funds $ 8,747,300 73,258 8,820,558 7,830,946 7,699 7,838,645 981 ,913 25,503 25,503 1,007,416 190,000 190,000 1,197,416 2,363,597 [4,393) 2,359,204 $ 3,556,620 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2018 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 425,839 $ 6,996,225 Cash paid to suppliers of goods or services [270,848] [6,047,211] Cash paid to employees Other operating receipts 6,855 60,258 Net cash provided by [used in] operating activities 161,846 1,009,272 Cash flows from investing activities Interest received 6,315 18,520 Cash flows from noncapital financing activities Transfers in Net cash provided by [used in] noncapital financing activities Net increase [decrease] in cash and cash equivalents 168,161 1,027,792 Cash and cash equivalents, January 1 919,455 2,084,615 Cash and cash equivalents, December 31 $ 1,087,616 $ 3, 112,407 See independent auditor's report on the financial statements. 102 Total Internal Central Service Garage Funds $1,327,391 $ 8,749,455 [1, 177,372] [7,495,431] [297,532] [297,532] 6,144 73,257 [141,369] 1,029,749 668 25,503 190,000 190,000 190,000 190,000 49,299 1,245,252 45,763 3,049,833 $ 95,062 $ 4,295,085 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2018 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss] $ 144,294 $1,057,625 $ [220,006] $ 981,913 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in KPERS OPEB liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows 687 [33,642] 16,865 [14,711] 7,699 53,639 4,554 16,766 5,818 [11,010] 1,076 95 7,699 53,639 4,554 [16, 189] 5,818 [11,010] 1,076 2,154 95 Net cash provided by [used in] operating activities $ 161,846 $1,009,272 $ [141,369] $1,029,749 See independent auditor's report on the financial statements. 103 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 fonner Schilling Airforce Base remediation case. Bail bond escrow fund -To account for funds being held in escrow for bonds issued by Municipal Court. 104 Special Assessment Escrow ASSETS: Cash and investments $ 108,806 Total assets $ 108,806 LIABILITIES. Accounts payable $ 108,806 Total llablli!Jes $ 108,806 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December 31, 2018 Fire Court Police Section DTF Insurance Payroll Bond and Investigation 125 Federal DTF ~ Cleanng ~ Account ~ f!2!l Ell!:!!!i!l!r!! l.ll!d!! $ 18,967 $ (339,790] ~ ~ $ 30,797 $215,856 _$ __ $41,241 $ 18,967 $ 18,967 $ 18,967 $ (339,790] ~ ~ $ 30,797 $215,856 _$ __ $41,241 $ [339,790] ~ L..1clfil. $ 30,797 $215,856 L__:_ !.i1.ill $ (339,790] ~ L..1clfil. $ 30,797 $215,856 L__:_ $41,241 See independent auditor's report on the financial statements 105 Beech craft Bail DTF Remedillon Bond Reserve Settlement Escrow ~ $ 33,475 $ 179,386 $1,135 $312,065 $33,475 $ 179,386 $1,135 $312,065 $33,475 $ 179,386 $1,135 $312,065 $33,475 $ 179,386 $1,135 $312'°65 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2018 Balance December 31, 2017 Additions Deductions Cash and investments Special Assessment Escrow $ 90,849 $ 17,957 $ Fire Insurance Proceeds 18,869 47,855 Payroll Clearing (365,473] 25,683 Court Bond and Restitution 23,818 Police Investigation Account 3,379 2 Citizenship Trust 94,580 41,498 Section 125 Plan Fund 291,014 353,619 DTF Federal Forfeiture 3,696 DTF Local 47,216 23,527 DTF Reserve 26,299 13, 102 Beechcraft Remediation Settlement 154,181 25,205 Bail Bond Escrow 1,127 8 Total Assets $ 389,555 $ 548,456 $ Accounts Payable Special Assessment Escrow $ 90,849 $ 17,957 $ Fire Insurance Proceeds 18,869 47,855 Payroll Clearing (365,473] 25,683 Court Bond and Restitution 23,818 Police Investigation Account 3,379 2 Citizenship Trust 94,580 41,498 Section 125 Plan Fund 291,014 353,619 DTF Federal Forfeiture 3,696 DTF Local 47,216 23,527 DTF Reserve 26,299 13,102 Beechcraft Remediation Settlement 154,181 25,205 Bail Bond Escrow 1,127 8 Total liabilities $ 389,555 $ 548,456 $ See independent auditor's report on the financial statements. 106 - 47,757 5,007 105,281 428,777 3,696 29,502 5,926 625,946 - 47,757 5,007 105,281 428,777 3,696 29,502 5,926 625,946 Balance December 31, 2018 $ 108,806 18,967 [339,790] 18,811 3,381 30,797 215,856 41,241 33,475 179,386 1,135 $ 312,065 $ 108,806 18,967 (339,790] 18,811 3,381 30,797 215,856 41,241 33,475 179,386 1,135 $ 312,065 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year ~ 2Q1Q w.1 N.11 2013 2Q14 WQ w.Ji 2017 -'21.§ Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Net Investment in capital assets s 101,974 85% $113,001 96% $109,289 93% $112,929 94% s 116,585 90% $ 115,589 90% $ 130,401 122% $124,635 108% $129,921 105% s 144,846 109% Restricted 1,174 1% 988 1% 1.712 1% 1,082 1% 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2% Unrestricted ~ 141% ~ 3% ~ 5% ---221! 5% ~ 9% ~ 9% ~-23% ~ -9% ~ -7% ~ -10% Total governmental activities net position $119,854 100% $117,797 100% $117,334 100% $119,522 100% s 129.423 100% $ 127,878 100% s 106,703 100% $115,868 100% s 123,701 100% $ 133,453 100% Business-type activities Net investment in capital assets $ 48,234 79% s 48,078 75% $ 44,227 63% s 50.857 69% $ 57, 103 75% $ 61,721 75% $ 68,107 80% $ 62.427 71% $ 63,316 71% $ 62,368 69% Restricted 1.553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2°/o 1,512 2% 1,512 2% Unrestricted ___!!.ill 19% 14 306 22% 24,528 35% 21,450 29% _____!Llli 23% ~ 24% ~ 18% ~ 27% 24,255 27% 26,503 29% Total business-type activities net position $ 61,269 100% $ 63,937 100% s 70,308 100% $ 73,860 100% $ 76,450 100% $ 82,778 100% $ 85,229 100% $ 87,560 100% $ 89,083 100% s 90,383 100% Primary government Net Investment in capital assets $150,208 83% $161,080 89% $153,516 82% s 163,786 85% $173,688 84% $ 177,311 84% $ 198,508 103% $187,062 92% $193,237 91% $ 207,213 93% Restricted 2,727 2% 2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% 3,878 2% Unrestricted ~ 16% ~ 10% 30 867 16% 26,961 14% 29,422 14% 30,959 15% ~ -5% ~ 6% ~ 8% ~ 6% Total primary government net position s 181,123 100% $181,736 100% $187,599 100% $193,382 100% $ 205,873 100% $ 210,658 100% $ 191,932 100% $203,428 100% $212,784 100% s 223,835 100% Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 107 Schedule 2 City of Salina, Kansas Changes m Net Position Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year ~ 2010 2Q1j_ Wl 2!m 2014 ~ ZQ.12 WI W.l! Expenses Governmental activibes. General government 14,6&1 10,845 13,614 11,278 10,978 12,175 10,743 $ 9,188 $ 9,780 12,013 Public safety 16,539 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 Public works 9,781 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 Public health and sanitation 1,390 1,365 1,368 1,383 1,369 347 995 1,095 1,126 1,256 Culture and recreation 5,397 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 Planning and development 3,375 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 Interest on long tenn debt ~ ~ ----121.! ~ _1.fil ~ ~ ____!.ill. ___b!!l Total governmental aciMIJes expenses 51,146 55,128 55.212 53.298 ~ 54,340 52,077 53,918 54,811 591145 Business-type activities Solid waste disposal 2,287 3,010 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 Water and sewer 12,995 14,050 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 Sanitation 2,224 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 Golf course ~ __ill ~ ___m ~ _.§E _..fil ___ill, ~ ~ Total business-type activlbes expenses 18,'403 201138 191628 201128 211955 201041 161208 19977 211045 201917 Total primary government expenses $ 69,549 $ 75.266 $ 741840 $ 73,426 $ 75,176 $ 741381 $ 681285 $ 73,895 $ 751856 $ 801062 Prog,.m Revenues Governmental act1v1t1es: Charges for services General government $ 4,599 $ 5,143 6,106 6,328 $ 5,548 5,662 $ 3,151 3,134 3,470 3,569 Public safety 2,913 3,969 3,766 4.290 4,656 4,222 4,600 4,891 4,601 4,815 Publlcworl<s 164 198 262 306 277 255 193 238 348 285 Public health and sanitation 42 37 43 46 34 46 46 44 50 47 Culture and recreation 1,936 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 Planning and development 267 144 153 158 161 167 73 140 91 150 Operating grants and contribubons 3,163 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 Capital grants and contnbut1ons ___lli. ~ Total governmental act1vit1es program revenues 131084 15,723 16,377 17,351 16,342 15,900 12,958 ~ 141642 19,345 Business-type aclJvities Charges for serv1ces Solid waste disposal 2,903 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 Water and sewer 14,980 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 Samtatron 2,292 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 Golf course 757 736 636 783 719 811 820 789 798 756 Operating grants and contnbutions 202 Capital grants and contributions 3,804 ~ ~ Total business-type act1vrbes program revenues 20.932 22,419 27,784 25,755 24,309 25,245 241927 25,657 26,703 27,061 Total pnmary government program revenues $ 34,016 $ 38,142 $ 44,161 $ 43,106 $ 40,651 $ 41,145 $ 371885 $ 40,807 $ 41,345 $ 461406 Net (Expense) Revenue Governmental act1v1t1es $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,4'40) $ (39,119) $ (38,768) $ (40,169) $ (39,800) Business-type activrt1es ~ ~ ~~ ~ 5,204 ~ 5,680 ~ ~ Total primary government net expense $ (351533) $ (371124) $ (301679) $ (301320) $ (341525) $ (33,236) $ (301400) $ (331088) $ (341511) $ (331657) General Reven,,_ and Other Chenges In Net Position Governmental activities· Taxes Property taxes, general purpose 9,019 7,803 7,783 8,272 8,031 8,315 $ 8,242 8,196 9,101 8,623 Property taxes, debt service 1,711 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 Motor vehicle taxes 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 Sales tax, general purpose 11,669 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13.292 Selective sales tax 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 Other taxes 5,791 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 Investment revenues 277 81 77 66 67 98 86 148 92 183 Miscellaneous 505 565 872 660 9,918 1,160 2,371 5,842 2,003 1,062 Transfers, net ~ __ 9_2 ~ __ 3_0 ~ __]£ ---1.fil ---1.§QQ ~ ~ Total governmental act1v1t1es 33,742 33,440 35,097 35,481 45,748 38,569 431448 47,851 481002 48,034 Business-type acbvrttes: lnvesbnent revenues 242 67 84 79 49 51 56 78 129 233 Miscellaneous 352 341 330 434 279 97 103 153 Reimbursements 180 132 79 Transfers, net ~ ___fil) ~ ____JW _1l!2Q) ~~~~ Total business-type actlv1t1es ~ _..lli ____m. ~ ~ ~ ~~~~ Total primary government $ 341081 $ 33,756 $ 351312 $ 351964 $ 451126 $ 38,897 $ 391855 $ 44,427 $ 431867 $ 431589 Change In Net l'osltlon Governmental activities $ (4,320) $ (5,965) $ (3,738) $ (466) $ 8,869 $ 129 $ 4,329 $ 9,083 $ 7,833 8,233 Business-type actJvrt1es ~ 2,597 _J!,R! ___fil1Q ~ ~ ~ ~ ~ ~ Total primary government $ (1.452) $ (3,368) $ 4,633 $ 5,644 $ 10,601 $ 5,661 $ 9,455 $ 11,339 $ 9,356 $ 9,931 Source: City of Salina Comprehensive Annual FmanC1al Reports, 2009 -2018 108 General Fund Reserved Nonspendable Restricted Comm rited Assigned Unreserved/unassigned Total general fund Restatement Restated fund balance All other governmental funds Reserved Nonspendable Restncted Committed Assigned Unreserved/unassigned Total all other governmental funds Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) 2011 !Note 1l Fiscal Year $ 508 $ 99 $ $ $ $ 90 293 ~ ~ ~ ~ 3,617 ~ ~ ~ $ 11,092 $ 6,413 $ 3,611 127 4,323 ~~ $15,116~~ 116 540 ~ ~ $ 3,319 (516) 4,087 ~ 81 107 331 239 ~ ~ ~ ~ $ $ 3,446 2,910 7,486 9,886 3,146 1,280 ~ $ 141076 $ $ $ $ 111 131 153 152 199 136 214 340 ~ ~ ~ ~ ~ ~ $ 6,883 ~ $ $ $ $ 2,793 3,142 4,191 4,648 8,695 14,284 10,072 7,325 619 1,043 641 1,227 (10,537) ~ ~ ~ !......12!2. $ 11,646 ~ ~ Note 1 Pnor 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, 2009 -2018 109 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten F 1scal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2QW ~ 2!211 ~ Zlill. 2014 2015 2fil2 Zl!1I ~ Revenues Taxes (see Schedule 5) $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 Intergovernmental 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 Special assessments 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 Licenses and permits 10 11 6 8 9 7 10 7 6 3 Charges for services 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 Investment revenue 210 64 69 47 40 59 47 142 79 157 Reimbursements 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 238 Miscellaneous ~ ~ ~ __2R ~ ~ 1,853 4,315 1,851 ____l!!!i Total revenues ~ ~ ~ ~ ~ 51,846 51,135 57,219 56,599 56,421 Expenditures General government 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5.422 5,423 5,649 Public safety 17,883 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 Public works 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 Public health and sanitation 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 1,236 Culture and recreation 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 Planning and development 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 Miscellaneous 32 Capital outlay 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 Debt service Principal 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 Interest 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 Deposit to escrow __!QI __ 9_2 --- Total expenditures 61,072 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 Other fin•nclng sources (uses) Bonds and notes issued 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 Bond and note premium 1,369 47 23 60 185 302 369 1,503 95 70 Transfers in 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 Transfers out (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) Other ~ ---Total other financing sources (uses) 25,259 ____zm ~ 6,240 ~ ~ 10,923 39,905 15 764 ~ Net change in fund balance $ 8,880 $(11,898) $ 2,803 L....lli $ 6,775 L...222 $ (12,046) $ 10,268 $ 5,082 $ (3,362) Debt service as a percentage of non-capital expenditures 17% 21% 17% 28% 18% 18% 20% 50% 16% 37% Source: City of Sahna Comprehensive Annual Financial Reports, 2009 -2018 110 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Real estate $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 $ 10,804 Delinquent 760 278 274 245 248 235 279 246 210 276 Motor vehicle 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 General sales 11,669 11,117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 Selective sales 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 Other taxes 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 ___MQQ_ 7,240 Total taxes $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 111 Fiscal (Budget) Year Real Estate 2009 $ 356,678,712 2010 $ 358,979,211 2011 $ 367,750,803 2012 $ 369,416,422 2013 $ 370,390,092 2014 $ 376, 131,346 2015 $ 381,087,426 2016 $ 389,872,825 2017 $ 391,895,060 2018 $ 403,835,383 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Estimated Total Total, Excluding Motor Vehicle Total, Taxable Market Value Personal Property State As~E!SSed Motor VehiCIE!S Tax Rate (Note 1) Assessed Value {l'IQtE! 2) $ 28,373,980 $ 14,929,456 $ 399,982,148 25.886 $ 51,351,656 $ 451,333,804 $ 2,914,775,730 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 $ 19,918,188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531,746 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884,188,981 $ 17'769,120 $ 16,948,264 $ 405, 107,4 76 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531,741 $ 11,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51,833,505 $ 472,683,104 $ 3,046,949,034 $ 11,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335,124 $ 3,097,885,103 $ 10,130,718 $ 20,485,144 $ 434,451,245 26.129 $ 53,336,677 $ 487,787,922 $ 3,150,409,123 Assessed Value to Est. Market Value 15.48 15.48 15.67 15.65 15.71 15.64 15.66 15.51 15.28 15.48 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk 112 Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Cit of Salina Saline Coun USO 305 2 Other (1 Fiscal I Debt Debt Total Debt Total (Budget) Operating USO Year Milla e Other Total 2009 21.749 4.137 25.886 29.347 29.347 46.339 12.208 58.547 10.971 124.751 2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.055 2011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.498 2012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.657 2013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.797 2014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.879 2015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.037 2016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.999 2017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.153 2018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.140 Source: Saline County Treasurer (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USO 306, USO 307, or USO 400. Total Tax Rates are different in the areas covered by these jurisdictions. 113 Taxpayer Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Kansas Gas Service Central Mall Realty Holding LLC S&B Motels Sams Real Estate Business Trust/Walmart Menard Inc. Individual Wal-Mart Real Estate Business Trust Great Plains Manufacturing Union Pacific Southwestern Bell Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2008 (2007 Assessed Valuel Assessed % of Total Type of Business Valuation Valuation Rank -Utility $ 7,287,074 2.17% 3 $ Pizza Manufacturing 12,382,582 3.69% 1 Regional Shopping Center N/A Utility 2,633,187 0.79% 7 Regional Shopping Center 9,003,313 2.69% 2 Motel 2,388,908 0.71% 8 Discount Retail Stores N/A Home Improvement N/A Residential 1,913,209 0.57% 10 Discount Retail Stores 3,627,525 1.08% 6 Manufacturing 2,308,375 0.69% 9 Railroad N/A Telephone Utility 4,783,821 1.43% 5 Hospital and Medical Offices 5,580,586 1.66% 4 -$ 51,908,580 $ = $ 335,262, 182 $ 15.48% 114 2018 (2017 Assessed Valuel Assessed % of Total Valuation Valuation Rank 11,856,980 2.73% 1 7,508,620 1.73% 2 4,674,872 1.08% 3 3,784,188 0.87% 4 3,696,437 0.85% 5 3,424,974 0.79% 6 2,529,908 0.58% 7 2,501,856 0.58% 8 2,333,789 0.54% 9 2,282,451 0.53% 10 44,594,075 434,451,245 10.26% Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Taxes Levied for the fiscal Delinquent Percentage Fiscal ~Bud~et~ Year ~ear Amount Percenta~e Collections ~1 ~ Amount ofle~ 2009 $ 10,354,161 $ 9,923,959 95.8% $ 759,764 $ 10,683,723 103.2% 2010 $ 10,276,905 $ 9,704,937 94.4% $ 278,656 $ 9,983,593 97.1% 2011 $ 10,415,491 $ 10,287,770 98.8% $ 273,843 $10,561,613 101.4% 2012 $ 10,570,420 $ 10,411,299 98.5% $ 245,086 $ 10,656,385 100.8% 2013 $ 10,576,448 $ 10,145,404 95.9% $ 248,184 $ 10,393,588 98.3% 2014 $ 10,908,147 $ 10,776,688 98.8% $ 398,820 $ 11, 175,508 102.5% 2015 $ 11,316,065 $ 10,460,246 92.4% $ 617,496 $ 11,077,742 97.9% 2016 $ 11,740,993 $ 10,972,299 93.5% $ 245,577 $11,217,876 95.5% 2017 $ 11,254,398 $ 11,239,051 99.9% $ 209,950 $ 11,449,001 101.7% 2018 $ 11,260,358 $ 10,803,591 95.9% $ 276,340 $ 11,079,931 98.4% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 115 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) 2009 0.50% 0.25%/0.40% 1.00% 62.46% Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2010 2011 2012 2013 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 61.58% 63.34% 61.72% 60.86% 2014 2015 2016 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 116 2017 2018 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 60.28% 59.85% Schedule 11 City of Sauna, KanSAs Water Sales by Class of Customer Last Ten Flscal Years 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 # Accts Water # Accta Water IAccts Water # Accts Water IAccts Water # Accts Water IAccts Water # Accta Water I Accts Water #ACCiS Water Rate Class Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Biiied Sold Resldenllal 17,792 1,043,774 17,838 1,127,864 17,899 1,194,629 17,893 1,225,931 17,966 989,788 18,042 1,003,iQO 18,086 987,540 18,125 950,697 18,124 988,572 18,130 963,387 Commercial 1,589 339,507 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 lndustrlal 46 152,910 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 Govemmenl 104 41,793 85 42.714 97 55,910 99 54,618 99 "46,484 97 45,3-46 97 41,928 99 45,136 99 41,552 98 35,932 Apartment 182 71,503 172 71,121 168 72.562 169 70,263 168 67,155 186 60,865 164 61,400 163 57,039 163 58,378 157 71,559 Schools 84 39,815 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 lndustrlal speclal 1 32,934 1 44,457 1 44,051 1 40,448 1 20,439 Consumed In production 18 26,223 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 Rural water 1 22,824 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 Hospitals 13 20,488 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 Religious/non profll 39 7,312 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 Other taxable deductions 699 Engineering studies 8 6,176 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 Providing taxable service 2 4,869 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 Sale of component perts 8 5,200 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 Fire hydrant 2 1,032 3 2,424 3 1,389 4 2,533 3 1,922 2 1,474 3 1,727 3 1,790 3 2,829 Industrial consumed In production 3 2,314 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 Sales of farm equipment 1 205 1 213 1 56 1 83 1 107 1 48 1 53 1 54 1 104 1 56 19,893 1,818,879 191887 1,9701202 19,954 21065,759 19 937 1 754 027 20 018 1,793 771 20 111 1 801 577 201153 11779,999 20 193 1 717 766 20,192 1 753 343 20 196 1 734 098 Water R11te Schedule: Monthly meter charge (518") s 4.4"4 s 4.51 $4.60 $4.7" $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 Commodity charge (per 000 gal.): 0 • 2000 gal. s 2.34 s 2.55 $3.77 $3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 2001 • 10,000 gal Over 10,000 gal. Excess use charge s 4.68 s 5.10 $7.54 $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 Wastewater Rate Schedule: Monthly base charge s 6.31 s 6.42 $6.57 $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 Unit cost (per 000 gal.): s 2.88 s 3.08 $4.48 $4.61 $4.79 $4.94 $5.01 $5.19 $5.29 $5.51 Water sold ls 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 Rale Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rate Source: City of Salina Waler Customer Accounllng Office. 117 Governmental Activities General Obligation Loans Schedule 12 City of Salina. Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Business-T;t~e Activities General Obligation Water Revenue Loans Fiscal Year Bonds Payable Capital Lease Temporary Notes Bonds Bonds Payable 2009 $ 52,067,590 $ $ $ $ 2,320,000 $ 2,320,000 $ 5,862,516 2010 $ 53.120,952 $ $ $ 2,500,000 $ 8,614,576 $ 1,580,000 $ 2011 $ 55,225,670 $ $ $ 3,400,000 $ 7,417,907 $ 16,193,925 $ 2012 $49,109,575 $ $ $ 1,485,000 $ 9,613,926 $ 15,850.228 $ 2013 $49,631,797 $ $ $ 3,800,000 $ 8,519,799 $ 15,226,532 $ 2014 $ 50,033,555 $ $ 176,235 $ 5,000,000 $ 9,587,351 $ 14,592,836 $ 6,208,102 2015 $ 50,840,632 $ $ 479,366 $ 5,995,000 $ 8,539,773 $ 13,949, 139 $ 5,753,620 2016 $ 51,816,399 $12,157,127 $ 321,174 $ 11,505,000 $ 7,640,381 $ 13,285,443 $ 7,432,024 2017 $ 55,994,305 $12,171,090 $ 157,868 $ 6,811,742 $ 6,520,433 $ 12,606,747 $ 8,862,810 2018 $51,968,310 $12, 185,053 $ $ 18.123.505 $ 5,282.578 $ 11,898,051 $10,632,351 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 118 Percentage Temporary Total Primary of Personal Notes Government Income Per Capita $ $ 62,570,106 3.5% $ 1,346.09 $ $ 65,815,528 3.8% $ 1,425.20 $ $ 82,237,502 4.3% $ 1,723.80 $ $ 76,058,729 3.8% $ 1,583.07 $ $ 77, 178, 128 3.7% $ 1,613.05 $ $ 85,598,079 4.1% $ 1,788.25 $ $ 85,557,530 4.1% $ 1,789.42 $ $ 104, 157,548 5.0% $ 2,200.39 $ $ 103, 124,995 4.9% $ 2, 194.43 $ $ 110,089,848 4.9% $ 2,342.64 Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding Percentage of Temporary Less Debt Net General Actual Taxable General Obligation Bonds Capital Lease Notes Total Service Fund Bonded Debt Value of Per Capita $ 54,387,590 $ 61,735,528 $ 62,443,577 $ - $ -$54,387,590 $ 735,291 $53,652,299 11.9% $1,154.23 $ - $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $ 1,378.60 $ 58,723,501 $ $ 58,151,596 $ $ 59,620,906 $ $ 59,380,405 $ $ 59,456,780 $ $ 62,514,738 $ $ 57,250,888 $ 176,235 479,366 321,174 157,868 $ 3,400,000 $ 65,843,577 $ 1,236,026 $ 64,607,551 14.4% $ 1,354.26 $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.2% $ 1,241.05 $ 3,800,000 $61,951,596 $ 707,763 $61,243,833 13.5% $1,280.02 $ 5,000,000 $64,797,141 $ 407,864 $64,389,277 14.1% $1,345.17 $ 5,995,000 $65,854,771 $ 745,339 $65,109,432 14.1% $1,361.75 $11,505,000 $ 71,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 $ 6,811,742 $69,484,348 $ 1,509,863 $67,974,485 14.4% $1,446.45 $18,123,505 $75,374,393 $ 1,851,358 $73,523,035 15.1% $1,564.52 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 119 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2018 Net General Obligation Percentage Bonded Debt Applicable to City Jurisdiction Outstanding of Salina Direct: City of Salina $ 73,523,035 100.00% Overlapping: Salina Airport Authority 21,427,000 100.00% Saline County 224,409 73.45% USD 305 117,030,000 93.11% Total Overlapping Debt 138,681,409 Total Direct and Overlapping Debt $ 212,204,444 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 73,523,035 21,427,000 164,823 108,969,011 130,560,834 $ 204,083,869 $ 4,268.38 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 120 Legal Debt Margin Calculabon for 2018 Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable to limit. Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit $ 487,787,922 146,336,377 $ 110,089,848 (5,282,578) (11,898,051) (22,817,404) (1,851,358) ~457 $ 78,095,920 2009 2010 $ 135,400,141 $ 134,340,263 $ 53,652,299 58,411,185 $ 81,7471842 $ 7519291078 $ 40% 43% Schedule 15 City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years Fiscal Year 2011 wz 2013 134,928,191 $ 135,421,208 $ 136,196,966 57,747,032 49,309,445 52,724,034 7711811159 $ 86, 111,763 $ 83,472,932 $ 43% 36% 39% 121 £21.i 136,896,083 54,625,691 ~ 138,909,078 56,090,293 ~ 141,804,931 62,072,485 2017 142,000,537 61,296,184 2018 146,336,377 68,240,457 82,270,392 $ 112,818,785 $ 791732,446 $ 8017041353 $ 78,095,920 40% 40% 44% 43% 47% Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Debt Utility Service Operating Net Available Debt Service Service Fiscal Year Char~es Expenses Revenue Princi~al Interest Covera~e 2009 $15,151,305 $10,693,654 $ 4,457,651 $ 1,276,243 $ 455,294 2.57 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 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 City of Salina Debt Service Schedules 122 Per Capita Personal Personal Income, Income Salina Fiscal Year Population (Saline County) (interpolated) 2009 46,483 $ 38,392 $ 1,784,575,336 2010 46,180 $ 37,880 $ 1,749,298,400 2011 47,707 $ 40,512 $ 1,932,705,984 2012 48,045 $ 41,762 $ 2,006,455,290 2013 47,846 $ 43,078 $ 2,061,109,988 2014 47,867 $ 43,736 $ 2,093,511, 112 2015 47,813 $ 44,065 $ 2, 106,879,845 2016 47,336 $ 44,230 $ 2,093,647,612 2017 46,994 $ 44,732 $ 2, 102, 135,608 2018 46,994 $ 47,945 $ 2,253, 127,330 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USO 305 Rate City of Salina Headcount 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,258 7,289 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 3.3% 30,174 7,180 Personal income for Salina is derived from the population and per capita personal income for Saline County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina Percentage Free and Per Capita .5 Reduced City .5 cent cent sales Lunch sales tax Tax 58.7% $4,965,147 $ 106.82 57.8% $4,803,553 $ 104.02 58.7% $ 5,076,751 $ 106.42 59.1% $ 5,241,205 $ 109.09 60.7% $ 5,326,723 $ 111.33 61.3% $5,555,601 $ 116.06 61.8% $5,670,040 $ 118.59 68.7% $5,727,260 $ 120.99 62.1% $5,755,869 $ 122.48 61.7% $5,770,174 $ 122.79 Increase in per capita Sales Tax (10 years) Increase in per capita Personal Income USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Asa%of per capita personal income 0.278% 0.275% 0.263% 0.261% 0.258% 0.265% 0.269% 0.274% 0.274% 0.256% 14.3% 20.5% Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 123 Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago 2009 Employer Type of Business Salina Regional Health Center Health Care Schwan's Global Supply Chain Frozen Pizza Manufacturing Unified School District No 305 Public School System Great Plains Manufacturing Agricultrual & Landscaping Equipment Exide Technologies Automotive Battery Manufacturer City of Salina City Government REV Group Manufacturing Salina Vortex Manufacturing Walmart Retail Blue Philips Lighting Company Fluorescent Lamps Raytheon Aircraft Aircraft Manufacturing Eldorado National Susses/Recreational Vehicle Total Source: Salina Chamber of Commerce Em[!IOlees Rank 124 2,093 1,850 935 650 800 493 600 357 255 8,033 1 2 3 5 4 7 6 8 9 Percentage of Labor Force 7.8% 6.9% 3.5% 2.4% 3.0% 1.8% 2.2% 1.3% 1.0% 30.0% Em[!IOlees 1,800 1,700 1,500 1,100 600 425 300 250 250 230 8,155 2018 Percentage of Labor Rank Force 1 6.0% 2 5.6% 3 5.0% 4 3.6% 5 2.0% 6 1.4% 7 1.0% 8 0.8% 9 0.8% 10 0.8% 27.0% [THIS PAGE INTENTIONALLY LEFf BLANK] APPENDIXD 2019 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2019 prepared on a cash basis. This information has been provided by City staff and is believed to be accurate but is subject to revision both before and during the auditing process. [THIS PAGE INTENTIONALLY LEFT BLANK] Budgeted Funds 2019 Budget 2019 Actuals Ending Fund Balance Revenues Expenditures Net Change Revenues Expenditures Net Change 12/31/2019 Target Balance Budgeted Funds: Tax Funds General 100 42,904,224 41,466,380 1,437,844 43,953,627 41,551,143 2,402,484 7,019,276 8,500,000 Debt Service 500 6,254,642 7,319,220 (1,064,578) 6,237,206 6,949,849 (712,644) 1,089,324 200,000 Special Revenue FundS ----·-Sales Tax Capital 210 8,501,016 9,614,958 (1, 113,942) 8,500,559 8,259,987 240,572 1,832,941 750,000 Sales Tax EcoDevo 220 356,987 480,000 (123,013) 344,976 533,897 (188,922) 708,563 50,000 Tourism 240 1,656,712 1,656,562 150 1,895,818 1,895,818 853 Special Gas 270 1,580,590 1,472,073 108,517 2,019,141 1,348,775 670,366 1,794,474 500,000 Arts & Humanities 200 1,057,948 1,039,097 18,851 1,040,274 992,216 48,058 49,764 100,000 Business Improvement District 230 90,528 90,500 28 83,701 85,201 (1,500) 4,661 Special Parks 250 213,851 259,000 (45,149) 227,304 6,620 220,684 348,866 50,000 Special Alcohol 260 213, 751 213,751 227,304 227,304 234 Neighborhood Parks 280 5,550 10,000 (4,450) 4,500 4,500 28, 751 TPEC 290 764,496 725,000 39,496 765,916 663,614 102,302 199,983 -n ------. Enterprise Funds -Sanitation 300 3,453,500 3,547,723 (94,223) 3,228,431 2,970,966 257,465 1,725,600 500,000 Solid Waste 320 2,880,000 3,071,997 (191,997) 3,489,733 2,995,684 494,049 4,512,594 500,000 t:j Golf 340 966,347 955,806 10,541 907,198 935,700 (28,502) 21,709 100,000 I Water/Wastewater 370 21,107,519 19,307,493 1,800,026 20,306,491 16,280,904 4,025,586 12,604,765 5,000,000 Internal s;'rvlce Fu-;;d$ -----· --~ Central Garage 450 1,641,184 1,564,013 77,171 1,574,530 1,474,000 100,531 154,659 100,000 Workers' Compensation 410 318,433 430,418 (111,985) 312,961 336,880 (23,920) 933,943 750,000 Health 420 6,553,584 6,547,553 6,031 6,104,976 7,028,930 (923,954) 2,188,453 1,500,000 [THIS PAGE INTENTIONALLY LEFT BLANK] ft Mixed Sources ............................. . ., ~:-:~~ Printed by: lmageMaster, UC www.imagemaster.com 0 =i -< 0 "Tl CJ) )> r-z }> ~ z CJ) )> CJ) • " m z m :ti )> r- 0 CD r- '5 ~ 0 z ~ m :s:: "tJ 0 :ti )> ~ z ~ m JI' CJ) m 2:! m CJ) N 0 N 0 I ..... > z c z ~ m :ti z )> r- :s:: "tJ :ti ~ m :s:: m z ~ CD 0 z c JI' CJ) m :ti iii CJ) N 0 N 0 > CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL To: Robert W. Baird & Co., Inc. Red Bank, New Jersey UMB Bank, N.A. Kansas City, Missouri April 7, 2020 Re: General Obligation Bonds, Series 2020-A; General Obligation Temporary Notes, Series 2020-1 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule l 5c2-l 2(b )(I) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: __ o&__...._~~~~-- Title: Finance Director Publisher's Affidavit I Kim Norwood being duly sworn declare that I am Major Accounts Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Citv of Salina- Improvement Bonds has been correctly published in the entire issues of said newspaper on March 26.2020,_//, /' J -~ ~ ±fll_{A,Q~ I thi Subscribed and sworn to before me, s 2 ft, ..µ.day of /Yl Ctrcb A.D. 20 Z.D \.~4 11oMffUJ,lic Printer's F $ 354.96 NOTARY PUBLIC • State of Kansas WENDY CHROBAK . MyAppt.Exp.l•tt.«elR Affidavit of Publication I am the publisher of the Kansas Register, a newspaper published pursuant to K.S.A. 75- 430, and the attached is a true copy of the notice that appeared therein on the date given below: March 26, 2020 In Testimony Whereof: I hereto set my hand and cause to be affixed my official seal. Done at the City of Topeka this 2nd day of April, A.D. 2020. Bonds Kansas Register 333 (Published in the Kansas Register March 26, 2020.) City of Salina, Kansas Summary Notice of Bond Sale $5,640,000* General Obligation Internal Improvement Bonds, Series 2020-A (General Obligation Bonds Payable from Unlimited Ad Valorem Taxes) Bids Subject to the Notice of Bond Sale dated March 23, 2020 (the "Notice"), facsimile and electronic bids will be re- ceived on behalf of the Finance Director of the City of Salina, Kansas (the "Issuer'') in the case of facsimile bids, at the address set forth below, and in the case of electron- ic bids, through PARITY® until 1:00 p.m. (CST) April 13, 2020, for the purchase of the above-referenced bonds (the "Bonds"). The minimum bid price for the Bonds shall be as specified in the Notice. Bond Details The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds will be dated April 29, 2020, and will become due on October 1 in the years as follows: Year 2021 2022 2023 2024 2025 2026 2027 2028 Principal Amount* $450,000 525,000 540,000 560,000 580,000 595,000 605,000 230,000 Year 2029 2030 2031 2032 2033 2034 2035 Principal Amount* $230,000 235,000 205,000 210,000 220,000 225,000 230,000 The Bonds will bear interest from the date thereof at rates to be determined when the Bonds are sold as here- inafter provided, which interest will be payable semian- nually on April 1 and October 1 in each year, beginning on April 1, 2021. Book-Entry-Only System The Bonds shall be registered under a book-entry-only system administered through OTC. Paying Agent and Bond Registrar Treasurer of the State of Kansas, Topeka, Kansas. Good Faith Deposit Each bid shall be accompanied (in the manner set forth in the Notice) by a good faith deposit in the form of_ a cashier's or certified check drawn on a bank located m the United States of America or a wire transfer in Federal Reserve funds immediately available for use by the Issu-er in the amount equal to 2% of the principal amount of the Bonds. Delivery The Issuer will pay for preparation of the Bonds and will deliver the same properly prepared, executed, and registered without cost to the successful bidder on or about April 29, 2020, to OTC for the account of the suc- cessful bidder. Assessed Valuation and Indebtedness The Equalized Assessed Tangible Valuation for Co~ putation of Bonded Debt Limitations for the year 2019 is $509,082,680. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $75,650,000, including general obligation notes to be issued simultaneously with the Bonds but excluding general obligation notes to be repaid with the proceeds of such notes and the Bonds. Approval of Bonds The Bonds will be sold subject to the legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, whose approving legal opinion as to the validity of the Bonds will be furnished and paid for by the Issuer, printed on the Bonds, and delivered to the successful bidder as and when the Bonds are de- livered. Additional Information Additional information regarding the Bonds may be obtained from the undersigned, or from Stifel Nicolaus & Company, Incorporated at the addresses set forth below: Issuer -Facsimile Bid and Good Faith Deposit Delivery Address City of Salina, Kansas Debbie Pack, Director of Finance and Administration 300 W. Ash St., Room 206 Salina, KS 67 402 785-309-5735 Fax: 785-309-5711 debbie.pack@salina.org Municipal Advisor Stifel Nicolaus & Company, Inc. Attn: David Arteberry 4801 Main St., Suite 530 Kansas Gty, MO 64112 816-283-5137 Fax: 816-283-5326 arteberryd@stifel.com Dated March 23, 2020. Debbie Peck Director of Finance and Administration • Subject to change, see the Notice. Doc. No. 048017 (Published in the Kansas Register March 26, 2020.) City of Hugoton, Kansas Summary Notice of Bond Sale $935,000* General Obligation Bonds Series2020 Details of the Sale Subject to the terms and requirements of the Official Notice of Bond Sale, dated March 9, 2020 (the "Official Notice"), of the City of Hugoton, Kansas (the "Gty"), (continued) Vol. 39, No.13, March 26, 2020 C Kansas Secretary of State 2020 In the opinion of Gilmore & Bell, P. C., Bond Counsel to the City, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended {the 11Code"): {1} the interest on the Notes and Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as 11qualified tax-exempt obligations" within the meaning of Code Section 265(b}{3}. See TAX MATTERS in this Official Statement. New Issues Book-Entry Only $7,050,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 Dated: Date of Delivery Moody's Ratings: Bonds-"Aa3" Notes-"MIGl" CITY OF SALINA, KANSAS $5,210,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Due: As Shown Herein The General Obligation Temporary Notes, Series 2020-1 Notes (the 11Notes") will be issued by the City of Salina, Kansas (the "Issuer" or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book-entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the 11Note Paying Agent" and "Note Registrar"). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES -"Redemption Provisions" herein. The General Obligation Internal Improvement Bonds, Series 2020-A Bonds (the "Bonds") will be issued by the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2021 (the "Bond Interest Payment Date"). The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and "Bond Registrar"). The Bonds are subject to redemption at the option of the City as further described herein. See THE BONDS -"Redemption Provisions" herein. MATURITY SCHEDULES (see inside front cover} The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Notes and Bonds will be available for delivery through the facilities of DTC, in New York, New York, on or about April 29, 2020. This Official Statement is dated April 20, 2020. THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. Maturity OS-01-21 MATURITY SCHEDULES $7,050,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 Amount $7,0S0,000 Rate 1.000% Yield 1.000% Base cus1p121 794744 DBS At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on November 1, 2020, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. $5,210,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A SERIAL BONDS Base cus1p121 Maturity Amount Rate Yield 794744 10-01-21 $49S,OOO 3.000% 1.0SO% CL4 10-01-22 S80,000 3.000 1.0SO CM2 10-01-23 S9S,OOO 3.000 1.lSO CNO 10-01-24 610,000 3.000 1.200 CPS 10-01-2S 630,000 3.000 1.300 CQ3 10-01-26 21S,OOO 3.000 1.400 CRl 10-01-27 22S,OOO 3.000 l.SOO CS9 10-01-28(2) 230,000 3.000 l.6SO CT7 10-01-31'2) 220,000 2.000 2.100 cwo 10-01-32(2) 22S,OOO 2.12S 2.200 CX8 10-01-33(2) 230,000 2.2SO 2.300 CY6 10-01-34(2) 23S,OOO 2.37S 2.400 CZ3 10-01-3S(2) 240,000 2.SOO 2.SOO DA7 TERM BONDS 10-01-3012) 480,000 2.000% 2.000% CV2 11l CUSIP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. 121 At the option of the City, Bonds maturing on October 1, 2028 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2027, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. The Term Bonds are also subject to mandatory redemption. See THE BONDS-"Redemption Provisions" herein. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300WestAsh P. 0. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Mike Hoppock, Mayor Melissa Rose Hodges, Vice Mayor Trent W. Davis, M.D., Commissioner Rod Franz, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATIORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri MUNICIPAL ADVISOR Stifel, Nicolaus & Company, Incorporated Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT............................................................................................................. 1 THE NOTES.......................................................................................................................................... 2 THE BONDS......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN......................................................................................................................... 13 SOURCES AND USES OF FUNDS.......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................................... 14 LEGAL MATTERS................................................................................................................................. 16 TAX MATTERS..................................................................................................................................... 17 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 19 UNDERWRITING ................................................................................................................................. 19 ABSENCE OF MATERIAL LITIGATION................................................................................................... 19 CONTINUING DISCLOSURE................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT.......................................................................................... 20 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY.............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY..................................................................... A-6 DEBT SUMMARY OF THE CITY....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2018 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2019 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $7,050,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 $5,210,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $7,050,000 General Obligation Temporary Notes, Series 2020-1 (the "Notes"), and its $5,210,000 General Obligation Internal Improvement Bonds, Series 2020-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES-"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. 1 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., and K.S.A. 12-1736 et seq, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated as of April 29, 2020 {the "Dated Date"), shall become due in the amount on the Stated Maturity and are subject to redemption and payment prior to the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, the Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on November 1, 2020, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), atthe Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note 2 or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar'' and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. 3 Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. 4 Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity (the "Note Interest Payment Date") to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on the Note Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on the Note Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Note Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE NOTES -Book-Entry Notes; Securities Depository." Payments Due on Saturdavs. Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor 5 Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A.12-1736 et seq, K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the City, and Article 12 Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and an ordinance and resolution adopted by the governing body of the City authorizing the issuance of the Bonds (collectively, the "Bond Resolution"). 6 Security The Bonds shall be general obligations of the City, payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Levv and Collection of Annual Tax. Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. Description The Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated as of April 29, 2020 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Bond Interest Payment Date to which interest has been paid, on the Bond Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2028 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2027, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Mandatory Redemption. The Bonds maturing on October 1, 2030 (the "Term Bonds") shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. The payments which are to be deposited into the Principal and Interest Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amount of such Term Bonds: *Final Maturity ofTerm Bonds Principal Amount $235,000 245,000 7 Year 2029 2030* Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. 8 Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Bond Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. 9 "Record Date" means, for the interest payable on any Bond Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Bond Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See ''THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may 10 find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance w ith the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond . Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("OTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of OTC. One fully- registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with OTC. 2. OTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. OTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U .S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with OTC. OTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. OTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for OTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the OTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). OTC has a Standard & Poor's rating of "AA+". The OTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about OTC can be found at www.dtcc.com. 3. Purchases of Securities under the OTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. 11 Beneficial Owners will not receive written confirmation from OTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with OTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with OTC and their registration in the name of Cede & Co. or such other OTC nominee do not effect any change in beneficial ownership. OTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other OTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, OTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of OTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of OTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through OTC 12 (or a successor securities depository). In that event, certificates will be printed and delivered to OTC. 12. The information in this section concerning OTC and OTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (collectively, the "Note Projects"}, retire a portion of the City's outstanding general obligation temporary notes and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Police Training Center Pheasant Ridge Addition No. 3 Stone Lake 2 The Bond Projects Ordinance/ Resolution Res. 19-77 43 Res. 18-7633 Res. 19-7750 Authority K.S.A. 12-1736 K.S.A. 12-6a01 et seq. K.S.A. 12-6a01 et seq. Total: Principal Amount $6,094,674.75 546,874.62 408.450.63 $7 ,050,000.00 Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects"), retire a portion of the City's outstanding general obligation temporary notes and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Project Description Landfill Cell #20 Police Parking Smoky Hill River Renewal Golf Irrigation North 9th Street Bridge Ordinance/ Resolution Res. 19-7672 Res. 19-7679 Ord. 17-10885 Res. 19-7678 Res No. 19-7677 Authority K.S.A. 12-2101 et seq. K.S.A. 12-1736 et seq. Article 12, §5 of the Constitution of the State of Kansas Charter Ordinance No. 39 K.S.A. 12-685 et seq. Total: SOURCES AND USES OF FUNDS Principal Amount $1,977,937.66 262,688.69 2,372,415.58 495,065.07 101,893.00 $5,210,000.00 Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Net Original Issue Premium Total Sources of Funds 13 $7,050,000.00 -. $7,050,000.00 $5,210,000.00 240.610.40 $5,450,610.40 Uses of Funds: Deposit to Improvement Fund Underwriter's Discount Cost of Issuance Total Application of Funds $6,990,440.93 15,510.00 44,049.07 $7,050,000.00 RISK FACTORS AND INVESTMENT CONSIDERATIONS $5,345, 725.93 38,938.55 65.945.92 $5,450,610.40 A PROSPECTIVE PURCHASER OF THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANALYZE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITERS. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A -FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." 14 Kansas Public Employees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under "TAX MATIERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on the Securities The initial offering prices of certain maturities of the Securities that are subject to optional redemption may be in excess of the respective principal amounts thereof. Any person who purchases such a Security in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Securities are subject to redemption at par under the various circumstances described under "THE NOTES- Redemption Provisions" and "THE BONDS-Redemption Provisions." No Additional Interest or Mandatory Redemption upon Event of Taxability Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. 15 Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. COVID-19 In December 2019, a novel strain of coronavirus disease known as COVID-19 emerged for the first time in humans in Wuhan, China. Since that date, the virus has spread throughout the world, including the United States and State of Kansas, and has been characterized by the World Health Organization as a pandemic. The continued proliferation of COVID-19 throughout the State and the City may adversely affect the City due to the economic ramifications of mandatory business, school, and other closures. Within the State, the Governor has announced the closure of all K-12 schools through the end of the 2019-20 school year and issued an Executive Order instituting a temporary State-wide stay-at-home order. The COVID-19 pandemic could negatively impact the finances and operations of the City and result in increased costs to the City and/or negative impacts on the collection of property and sales taxes within the City due to increased tax payment delinquencies, disruption of the collection or distribution of taxes by the State and/or Saline County, or other related factors that may pressure the City's budget and cash flows. Such factors could negatively affect timely repayment of the Bonds and the Notes. Significant developments regarding COVID-19 continue to occur daily and the extent to which COVID-19 will impact the City in the future is highly uncertain and cannot be predicted. 16 LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATIERS, TAX MATIERS, and APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING. TAX MATTERS The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §265(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. 17 Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is generally the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code§ 1288, OID on tax-exempt obligations accrues on a compound basis. The amount of OID that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of OID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on such Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID. For each Security, the stated redemption price at maturity includes all payments on the Security, except interest payable at least annually over the term of the Security ("qualified stated interest"). Since the May 1, 2021 interest payment on the Notes will be paid more than one year after the Notes are issued, none of the interest payments on the Notes constitute qualified stated interest, and the stated redemption price of the Notes includes all payments on the Notes. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of premium. Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax 18 consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS Moody's Investors Service has assigned a "MIGl" rating on the Notes and a "Aa3" rating on the Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. MUNICIPAL ADVISOR Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by UMB Bank, (the "Notes Underwriter") at a price equal to the principal amount of the Notes, less an underwriting discount of $15,510.00. The Bonds are being purchased by Robert W. Baird & Co., Incorporated (the "Bonds Underwriter") at a price equal to the par amount of the Bonds, plus a net original issue premium of $240,610.40, less an underwriting discount of $38,938.55. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the "Underwriters". ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been dohe regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In connection with the issuance of the Securities, the Issuer will enter into a continuing disclosure undertaking (the "Disclosure Undertaking") wherein the Issuer covenants to annually provide certain financial information and operating data (collectively, the "Annual Report") and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. Pursuant to the Disclosure Undertaking, this Issuer has agreed to file its Annual Report with the national repository ("EMMA") not more than 180 days after the end of the City's Fiscal Year, commencing with Fiscal Year ended in December 31, 2018. In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of 19 and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B-FORM OF CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Certain operating data for the fiscal year ended December 31, 2014 was timely filed in summary form. Additional details related to such summary information were included in the City's audited financial statements for the fiscal year ended December 31, 2014 that were filed on October 26, 2015. 2. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The Issuer's audited financial statements for each of the last five fiscal years were not completed by the filing deadlines primarily because of challenges with financial software conversion (which has since been completed), staff turnover and delayed receipt of component unit audits. In compliance with the Issuer's prior disclosure undertakings, the Issuer timely filed unaudited financial statements and promptly filed audited financial statements when they became available. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 20 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2019 Estimated Actual Valuation (1) 2019 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2018 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Utility System Revenue Bonds Outstanding Special Obligation Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,294,115,685 $ 509,082,680 $ 63,920,000 $ $ $ $ $ $ $ $ $ 46,716 1,368 1.94% 12.56% 7,050,000 46,354,852 656,261 10,330,000 22,570,000 122,192,447 239,517,299 5,127 7.27% 47.05% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY-"Estimated Actual Valuation". (2) Includes the Bonds. (3) Excludes outstanding Notes to be retired with proceeds from the sale of the Notes and Bonds and other available funds. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full faith and credit. See DEBT SUMMARY OF THE CITY -"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY -"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2018 U.S. Census Bureau estimate of 46, 716. The City is the county seat for Saline County which had an estimated 2018 U.S. Census Bureau population of 54,401. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Mike Hoppock Melissa Rose Hodges Trent W. Davis, M.D. Karl F. Ryan Rod Franz Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2022 2022 2024 2024 2022 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2018 2017 2016 2015 2014 A-2 U.S. Census Bureau Population 46,716 46,994 47,336 47,813 47,867 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 201 full-time employees for out of the 446 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full-time firefighters. The fire department operates 31 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 109 personnel, of which 82 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,300. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 642 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 716 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 50 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. The University of Kansas School of Medicine and School of Nursing have a campus in Salina. This campus is aimed at students with a strong desire to practice medicine in rural areas. The School of Medicine has 8 students and the School of Nursing started with 17 students and has a capacity of 48 students. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by United Airlines. The airline offers daily scheduled passenger air service to Denver International Airport and Chicago O'Hare International Airport. A-3 Utilities and Infrastructure Evergy, Inc. supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50"/o partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $942.056 million as of Spring, 2019. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of June 30, 2018, KPERS serves approximately 312,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. (b) Local Group -all participating cities, counties, library boards, water districts and political A-4 subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory'' defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution is 8.89% of the employee's gross salary for calendar year 2019. The Issuer's contribution is projected to change to 8.61% of gross compensation for calendar year 2020. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2018 (the "2018 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1.502 billion at the end of 2018. The amount of the UAAL in 2018 changed from the previous year's amount due to the factors discussed in the 2018 Valuation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2018 Valuation Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2018 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2018 Valuation Report sets the employer contribution rate for the period beginning January 1, 2021, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.87% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2018 Valuation Report. The statutory contribution rate of employers currently equals the 2018 Valuation Report's actuarial rate. As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2018 Valuation Report, KP&F carried an UAAL of approximately $933 million at the end of 2018. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2019, the Issuer contributes 22.13% of employees' gross compensation. Beginning January 1, 2020, the Issuer's contribution is projected to change to 21.93% of gross compensation for calendar year 2020. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums and tennis courts. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, Rev Group, Exide Battery, Advance Auto Parts Distribution Center, and Signify. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas first class cities in 2017 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2017, businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 5,996 employees with a total level economic activity for 2017 of approximately $1,168,468,359. The report also cited that the Airport/ Airport Industrial Center accounted for 14.3 percent of the employment in Saline County and 37 percent of the total economic activity in a seven-county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2019 to be 25,643 persons and year-to-date 2020 to be 25,766. The estimated median household income for the City in 2018 was $49,079 and owner-occupied housing rates in the City were 64.7%. Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority") is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, United Airlines began daily service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier- manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2019, the Salina Air Traffic Control Tower logged over 76,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.2 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2019 and 118,337 as of January 2020. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight of the businesses and organizations are tenants of the Authority. One of the primary functions of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwan's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina Salina Vortex REV Group Wal mart Signify Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,875 1,700 1,500 1,100 600 425 375 300 250 190 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2018 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A 47,945 44,732 43,552 41,447 41,096 40,235 State of Kansas $50,155 47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2019 (dee) 25,338 24,583 755 3.0% 2018 25,685 24,784 781 3.1 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 A-8 State of Kansas: Year 2019 (dee) 2018 2017 2016 2015 Total Labor Force 1,486,620 1,491,587 1,478,783 1,484,001 1,499,009 Employed 1,439,563 1,445,819 1,425,216 1,422,122 1,435,884 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness Unemployed 47,057 45,768 53,567 61,879 63,125 Unemployment Rate 3.2% 3.1 3.6 4.2 4.2 The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturi~ Outstanding* 12-15-08 2008-B Internal Improvements $3,525,000 07-01-24 $390,000 07-15-09 2009-A Internal Improvements 23,695,000 10-01-20 595,000 05-01-10 2010-A Refunding & Improvement 6,875,000 10-01-20 330,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 1,170,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-21 740,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 1,340,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 180,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 905,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 2,920,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 4,600,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 5,515,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 5,785,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 12,430,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 8,745,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 1,975,000 04-24-19 2019-A Improvements (the Bonds) 11,090,000 10-01-39 11,090,000 04-29-20 2020-A Improvements 5,210,000 10-01-35 5,210,000 Total $63,920,000 *Includes the Bonds. A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding 2019-1 04-24-19 05-01-20 $6,085,000 $0(1) 2019-2 10-15-19 07-01-20(2) 5,085,000 O(l) 2020-1 04-29-20 05-01-21 7,050,000 7,050,000 $7,050,000 Ill To be redeemed with proceeds from the Notes and Bonds and other available funds. 12iconditionally called for redemption on May 4, 2020. Utility System Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturitv Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $10,330,000 Lease Obligations (as of December 31, 2019): Year Original Final Amount Item Issued Amount Year Outstanding HVAC System 2012 $1,100,000 2027 $656,261 Special Obligation Revenue Bonds: The following special obligation revenue bonds are payable solely from sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturitv Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $18,250,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $22,570,000 State Loans The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultimately secured by the City's ability to levy unlimited ad valorem property taxes. A-10 Project Year Final Original Amount Number Purpose Originated Palt'.ment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $ 6,411,458 KDHE 2841 Water 2015 08-01-35 4,250,000 3,693,394 KDHE 2917 Water 2019 02-01-40 32,000,000 32,000,000* KDHE 2957 Water 2019 02-01-40 4,250,000 4,250,000* $46,354,852 *Construction on these projects is in process. The City has not yet drawn down the entire principal amounts shown above but is expected to do so in order to complete the projects. Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Amount Outstanding $ 20,175,000 220,693 109,280,000 Estimated Share of the City Jurisdiction Salina Airport Authority Saline County* Unified School District No. 305 Amount $ 20,175,000 163,268 101,854,179 $122,192,447 *As of June 30, 2019, all other jurisdictions as of December 31, 2019. Annual Debt Payments Percentage 100.00% 73.98 93.20 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2020-A Bonds Year Principal Interest Principal Interest Total 2020 $4,895,000 $909,329 $5,804,329 2021 4,865,000 1,671,789 $495,000 $203,290 7,235,079 2022 4,790,000 1,502,298 580,000 128,088 7,000,386 2023 4,610,000 1,317,644 595,000 110,687 6,633,331 2024 4,390,000 1,138,598 610,000 92,838 6,231,436 2025 4,055,000 1,024,004 630,000 74,537 5,783,541 2026 3,745,000 913,534 215,000 55,637 4,929,171 2027 3,500,000 806,839 225,000 49,187 4,581,026 2028 3,180,000 710,294 230,000 42,437 4,162,731 2029 2,895,000 619,936 235,000 35,537 3,785,473 2030 2,410,000 539,224 245,000 30,838 3,225,062 2031 2,430,000 469,321 220,000 25,937 3,145,258 2032 2,330,000 397,426 225,000 21,538 2,973,964 2033 2,305,000 325,594 230,000 16,757 2,877,351 2034 2,110,000 253,813 235,000 11,581 2,610,394 2035 1,885,000 188,250 240,000 6,000 2,319,250 2036 1,610,000 130,763 0 0 1,740,763 A-11 2037 2038 2039 1,240,000 725,000 740.000 $58, 710,000 83,175 43,950 22.200 $13,067,981 0 0 0 $5,210,000 *Excludes payments made prior to the closing date of the Bonds. Historical Debt Information 0 0 0 $904,889 1,323,175 768,950 762.200 $77,892,870 The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2019 $59,170,000 11.69% 1.80% 46,716 $1,266.59 2018 54,885,000 11.25 1.74 46,716 1,174.87 2017 59,985,000 12.46 1.94 46,994 1,276.44 2016 56,875,000 12.03 1.87 47,336 1,201.52 2015 57,535,000 12.43 1.94 47,813 1,203.33 Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $26.3 million of improvements. A portion of the debt service payments on bonds issued for these projects are anticipated to be paid from local sales tax and utility system fees. The City has recently discussed the delaying several of these projects in light of the COVID-19 situation. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City has been involved with civil litigation concerning environmental contamination in certain areas in the vicinity of the Salina Regional Airport and the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University (the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency (DoD) caused contamination. The Salina Public Entities reached a mediated settlement agreement with the U.S. Department of Justice (DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provided for a 10% local share of initial project costs paid by the City. The Consent Decree provided for a remedial investigation and feasibility study (Rl/FS) to determine the extent and severity of the contamination and to determine the best method of remediation. The Rl/FS has been completed within budget and The Kansas Department of Health and Environment's Corrective Action Decision (CAD) was issued on July 29, 2019. Issuance of the CAD provided the basis for the resumption of mediation with the Federal Government to determine respective financial responsibilities for remediating the contamination. Settlement negotiations are ongoing. If a mediated settlement results in identification of a potentially material local share of the remediation cost, it may be necessary for the City to issue debt to fund the local share. The exact timing and amount, if any, of such borrowing cannot be determined at this time. A-12 Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the "Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; (E) expiration of any abatement of property from property tax; or A-13 (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or (F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding calendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "[w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax Lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "[b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific A-14 debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2018 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"), which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2015 2016 2017 2018 Property Taxes $9,244,160 $9,217,596 $10,115, 784 $9,743,497 Sales Tax 12,930,811 12,780,891 12,906,032 32,900 Other Taxes 5,663,843 6,347,717 5,215,264 5,444,880 Intergovernmental 975,720 1,301,106 1,133,310 1,144,717 Charges for Services 6,046,903 6,472,698 6,153,450 6,366,094 Investment Revenue 0 102,045 3,336 45,477 Miscellaneous 498,557 507,330 1,709,491 452,916 Total Revenues $35,359,034 $36, 729,383 $37,236,667 $36,490,207 Expenditures: General Government $5,342,433 $5,422,010 $5,423,241 $5,648,579 Public Safety 21,267,630 21,664,398 21,628,730 22,952,925 Public Works 4,875,641 5,066,426 5,328,315 5,350,056 Public Health and Sanitation 754,347 703,606 749,656 793,780 Culture and Recreation 4,039,856 4,147,736 4,424,221 4,494,713 Planning and Development 586,358 980,950 752,825 766,471 Capital Outlay 1,041,690 1,098,587 896,026 860,115 Total Expenditures $37,907,955 $39,083, 713 $39,203,014 $40,866,639 Revenues Over (Under) $(2,548,921) $(2,354,330) $( 1,966,34 7) $$(4,376,432) Other Sources (Uses) 2,962,350 2,546,500 3,816,500 4,236,500 Net Change in Fund Balance $413,429 192,170 1,850,153 $(139,932) A-15 Fund Balance January 1 Restatement of Prior Year Balance Fund Balance December 31 Assessed Valuation $4,254,432 172,325 $4,840,186 $4,840,186 0 $5,032,356 $5,032,356 0 $6,882,509 $6,882,509 0 $6,742,577 According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propertv• Utilities Vehicle Valuation 2019 $421,108,311 $11,173,863 $22,113,195 $54,687,311 $509,082,680 2018 403,835,383 10,130,718 20,485,144 53,336,677 487,787,922 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 *Personal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2019 2018 2017 2016 2015 2014 2013 Special Assessments Residential Real Estate Equalization Ratio N/A 11.17% 11.04 11.36 11.28 11.65 11.55 Estimated Actual Value $3,294,115,685 3,150,409,123 3,097,885,103 3,046,949 ,034 2,968,008,193 2,917,267, 724 2,889,385,914 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. A-16 The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount ~ Amount ~ 2019* 29.720 $15,037,337 $8,552,180 56.9% $8,552,180 56.9% 2018 28.394 13,780,643 13,427,810 97.4 13,590,888 98.6 2017 26.129 12,728,983 12,381,334 97.3 12,602,044 99.0 2016 27.603 11,564,876 11,320,197 97.9 11,524,101 99.6 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 2014 27.080 10,991,959 9,312,515 84.7 10,832,972 98.6 2013 26.927 10,868,225 8,101,775 74.5 10,839,120 99.7 2012 26.190 10,550,730 6,597,038 62.5 10,500,249 99.5 *Represents collections through December 31, 2019. A-17 Tax Levies Nov Nov Nov Nov Nov Nov 2014 2015 2016 2017 2018 2019 Levy Levy Levy Levy Levy Levy City of Salina 27.080 27.311 27.603 26.129 28.394 29.720 Salina Library 6.034 5.895 5.893 5.989 6.014 5.913 State Education & Other 1.500 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 55.605 56.120 55.743 56.501 57.522 55.508 Airport Authority 4.486 4.396 4.396 4.225 4.998 4.447 Central Kansas Extension District 1.285 1.502 1.510 1.475 1.476 1.198 Saline County 37.047 38.275 37.508 37.321 38.437 41.097 Total 134.037 134.999 134.153 133.140 138.341 139.383 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2019 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Evergy, Inc. Utility $13,682,027 2.69% SFC Global Supply Chain Inc Manufacturing 6,855,966 1.35 Kansas Gas Service Utility 4,415,353 0.87 RAF Salina LLC Retail Shopping Center 4,296,499 0.85 S&B Motels Inc Motel 3,774,927 0.74 Central Mall Realty Holding LLC Retail Shopping Center 2,868,321 0.56 Union Pacific Railroad Co. Railroad 2,570,668 0.51 Menard Inc. Home Improvement Store 2,465,098 0.49 Individual Residential 2,440,724 0.48 Sam's Real Estate Business Trust/Walmart Discount Store 2,286,508 0.45 Total $45,656,091 8.99% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: *Through February 2020. Year 2020* 2019 2018 2017 2016 2015 2014 A-18 Value $2,084,451 20,544,765 71,862,718 59,975,197 97,910,328 56,989,007 24,214,432 Sales Tax Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The 2016 sales tax replaced an existing sales tax of .40%. The total sales tax for goods and services in the City is 8.75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. !1lAs of February 2020 Year 202011! 2019 2018 2017 2016 2015 2014 2013 Citywide Local Option Sales & Use Tax Receipts $2,437,227 14,922,404 14,632,584 14,404,702 10,458,630 10,372,573 10,099,512 9,705,026 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $1,372,223 7,608,604 7,415,804 7,368,869 7,312,618 7,376,708 7,188,934 6,998,806 !2lCollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the . 75% 2016 sales tax. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was .90%. The aggregate rate was increased to 1.25% as a result of the approval of the 2016 sales tax discussed above. Source: Kansas Department of Revenue Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. A-19 Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12%' to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not A-20 accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2018 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.17%, and commercial and industrial property was 22.55%. A-21 APPENDIXB Form of Continuing Disclosure Undertaking CONTINUING DISCLOSURE UNDERTAKING $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A $7,050,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 DATED APRIL 29, 2020 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2020 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 29, 2020, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 1 Sc2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so Jong as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or Continuing Disclosure Undertaking the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal secunttes disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days afterthe end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2019, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, Continuing Disclosure Undertaking 2 as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section (d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity ofless than 18 months. (c) The Annual Report shall be filed with the MSRB in such manner and format as 1s prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): ( 1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; ( 6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; ( 11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; ( 13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an Continuing Disclosure Undertaking 3 action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; ( 15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist 1t m carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, ( 1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) Continuing Disclosure Undertaking 4 between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] Continuing Disclosure Undertaking 5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL} Mayor City Clerk Continuing Disclosure Undertaking S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers APPENDIXC December 31, 2018 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2018, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December31,2018 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, 2018 Letter of Transmittal Organizational Chart List of Principal Officials Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance-Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i -iv v vi 1 - 3 4-15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2018 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City's Total OPEB Liability and Related Ratios Other Postemployment Benefits -KPERS Schedule of Changes in the City's Total OPEB Liability and Related Ratios KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement District Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -70 71 72 73 73 74-75 76 77 78-79 80-81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2018 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds STATISTICAL SECTION Net Position by Component -Last Ten Fiscal Years Changes in Net Position -Last Ten Fiscal Years Fund Balances, Governmental Fund -Last Ten Fiscal Years Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years Direct and Overlapping Property Tax Rates -Last Ten Fiscal Years Principal Property Taxpayers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 99 100 101 102 -103 104 105 106 Schedule 1 107 2 108 3 109 4 110 5 111 6 112 7 113 8 114 9 115 10 116 11 117 12 118 13 119 14 120 15 121 16 122 17 123 18 124 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 City of !l 5allna September 25, 2019 To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2018, 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, 2018 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 transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 46,994. 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, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." According to the Kansas Department of Revenue's Annual City Trade Pull Factor report, Salina had a pull of factor of 1.48 in 2017. 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 2018. 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 Salina Field House completed its first year in business. It hosted 16 tournaments and over 91,000 attendees and continues to grow in the number of events that it is drawing to the City. ii Old Chicago Pizza opened for business in the City's downtown corridor in late 2018. STAR Bonds were issued in December, 2018, for the Downtown Revitalization Project. As a result of this funding, several projects are now moving forward including the City's Downtown Streetscape project, the Alley Entertainment Center, a car museum and the new downtown hotel. 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 Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2.5% were implemented in 2018. 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 Sales tax $ 4,380,000 Water & wastewater fund General obligation bonds 5,225,000 Revenue Bonds/Loans 11,255,000 Other sources 785,800 $ 21,645,800 2020 2021 $ 4,385,000 $ 4,390,000 2,000,000 19,700,000 6,000,000 28,000,000 $ 30,085,000 $34,390,000 2022 $ 4,395,000 2,000,000 $6,395,000 2023 $ 4,250,000 2,000,000 $ 6,250,000 *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning 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 Mize Houser 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 Municipal Court Risk Management Development Services Lauren Driscoll I / Building Services Neighborhood Services Planning & Zoning \.Community Relations I Parks & Recreation Chris Catton I Parks Division Recreation Division Golf Course Facility Maintenance Animal Services *Tony's Pizza Event Center I /' I Public Works Jim Kowach I Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Computer Technology Jock Rolfs Organizational Chart lllO CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rose Hodges Mike Hoppock Joe Hay City Manager Michael Schrage u L _______________________ _ Deputy City Manager Vacant I I I Utilities I Finance/Administration Martha Tasker Debbie Pack I /' Water Plant Division City Clerk Wastewater Plant Water Customer Division Accounting Utility Division Finance Water Distribution Wastewater Collection Arts & Humanities Brad Nelson v Legal Services Clark Mize & Linville Chartered* Greg Bengston Continuous Process Improvement Scott Gardner I I Fire Kevin Royse I Fire Administration Fire Suppression Fire Prevention EMS Human Resources Natalie Fischer ( I Police Brad Nelson I Administration Patrol Division Support Division Investigative Division """ vi City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Rose Hodges, Commissioner Joe Hay, Commissioner City Executive Staff Michael Schrage, City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities Scott Gardner, Continuous Process Improvement vi FINANCIAL SECTION Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT • MIZE0 HOUSER OMPANYr.A. We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2018, 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 Housing Authority of the City of Salina, which is a discretely presented component unit in the accompanying financial statements and which statements reflect total assets and deferred outflows of resources of $7,486,949 as of June 30, 2018 and total revenues of $2,507 ,375 for the year then ended. 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 Housing Authority of the City of Salina, is based solely on the reports of the other auditors. www.mizehouser.com • mhco@mizehouser.com 534 S Kansas Ave, Suite 700 •Topeka, KS 66603-3465 • 785.233.0536 p • 785.233.1078 f 534 S Kansas Ave, Suite 400 •Topeka, KS 66603-3454 • 785.234.5573 p • 785.234.1037 f 7101 College Blvd, Suite 900 •Overland Parle. KS 66210-1984 • 913.451.1882 p • 913.451.2211 I 211 E Eighth Suite A• Lawrence, KS 66044-2771 • 785.842.8844 p • 785.842. 9049 f 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2018, 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 Change in Accounting Principle As described in Note 3 to the financial statements, the City implemented GASB 75 for other postemployment benefits during the current year. As a result of the implementation, a restatement was made to the net position at December 31, 2017. Our opinion is not modified with respect to this matter. Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2017, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2018, 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. 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 70 and 71, the schedule of the City's proportionate share of the net pension liability on page 72, and the schedule of City contributions on page 72 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. 2 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. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas September 25, 2019 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2018 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2018. 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 $11 .1 million from current operations with net position increases of $9.8 million and $1 .3 million in governmental activities and business-type activities , respectively. • At the close of 2018, the City's governmental funds reported combined ending fund balances of $19.1 million, a decrease of $2.7 million from the prior year. This primarily resulted from issuance of temporary notes in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance decreased $140 thousand over the prior year. • At the close of 2018, the City's enterprise funds reported a combined ending Net Position of $90.4 million, an increase of $1 .3 million over prior year. Positive performance was shared by the Water and Sewer Fund and the Sanitation Fund, with the Water and Sewer Fund providing the bulk of the change ($1.8 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 increased by $4.2 million from the prior year and revenues from business type activities increased $.5 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, 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 Other Information CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 41% ($37.5 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $. 7 million (2%) from the prior year with the sanitation fund increasing $121 K (4.2%) and water and sewer fund increasing $347K (2%). The increase in charges for services in the sanitation fund fund and the increase in the water and sewer fund are a result of an increase in user fees. Sa/es taxes are the next largest component of the revenue mix, providing 24.7% ($22.2 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 2018, 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 is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 13.9% ($12.5 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 3.0%. The total City mill levy decreased 5.3%. The overlapping levy decreased in 2018 by .75%. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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 $10.1 million from its peak of $39.7 million in 2007. At the 2018 tax rate, this exemption is equivalent to over $775K in annual lost revenue. Motor vehicle value increased 4.6%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Comparati1.e Property Values and Tax Le"Y Rates Fiscal (Budget) Year Real Estate and Personal Property Assessed Valuation City Mill Le"Y ($per $1,000) Operating (General Fund) Debt Service Total City Rate Total 01.erlapping Le"Y Percent of Total Taxes Collected Ratio of Total Taxes (including delinquent collections) to taxes le\.ied Motor Vehicle Valuation 2018 2017 Change $434,451,245 $422,364,328 $12,086,917 20.339 21.694 (1.355) 5.79 5.909 (0.119) 26.129 27.603 (1.474) 133.14 134.153 (1.013) 95.9% 99.9% -4.0% 98.4% 101.7% -3.3% $ 53,336,677 $ 50,970,796 $ 2,365,881 The unemployment rate in Salina increased slightly from 2.7% at the end of 2017 to 3.3% at the end of 2018, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force increased to 30, 174 from 27,684 in 2017. In 2018, the top ten property taxpayers accounted for 10.26% of total assessed value. This is less concentrated than ten years ago (at 15.48%). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $223.8 million at December 31, 2018. This represents an increase in net assets of $11.1 million over 2017. A comparative Condensed Statement of Net Position at December 31, 2018 and 2017: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Condensed Staterrent of Net R:>srtJon As of Decerrber 31 (In $000) Governrrental Activities Business-Type Activities Total Primary Governrrent % of % of 2018-2017 2018 2017 2018 2017 2018 Total 2017 Total change Cash and 1nvestrrents $ 34,302 $ 24,491 $ 32,140 $ 30,336 $ 66,442 17% $ 54,827 15% $ 11,615 Other current assets 16,774 13,836 2,630 2,338 19,404 5% 16,174 4% 3,230 Noncurrent (capital) assets 210,515 206,600 ~ 91,306 300,696 78% 297,906 81% 2,790 Total assets 261,591 244,927 124,951 123,980 386,542 100% 368,907 100% 17,635 --- Total deferred outflows of resources 5,527 5,968 802 887 6,329 100% 6,855 100% (526) --- Total assets and deferred outflows of resources 267,118 250,895 125,753 124,867 392,871 375,762 17,109 --- Current liabilities 28,623 12,540 3,814 3,879 32,437 21% 16,419 11% 16,018 Noncurrent habilrties 90,931 102,076 31,332 31,685 122,263 79% 133,761 89% (11,498) --- Total hab1litles 119,554 114,616 35,146 35,564 154,700 100% 150,180 100% 4,520 --- Total deferred inflows of resources 14,113 12,578 224 220 14,337 12,798 1,539 --- Net posrt1on Net investrrent 1n capital assets 144,845 129,921 62,368 63,316 207,213 92% 193,237 91% 13,976 Restricted for permanent funds 514 502 514 0% 502 0% 12 Restricted for debt service 1,851 1,510 1,512 1,512 3,363 2% 3,022 1% 341 Unrestricted (13,759) (8,232) 26,503 24,255 12,744 6% 16,023 8% (3,279) --- Total net posrtion 133,451 123,701 90,383 89,083 223,834 100% 212,784 100% 11,050 --- Percent of total net position 60% 58% 40% 42% 100% 100% Cash and investrrents as a percentage of current habil~ies 120% 195% 843% 782% 205% 334% 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 2018, the amount of net investment in capital assets increased by $14.0 million. Amount restricted for debt service increased by $341 thousand. Unrestricted decreased by $3.3 million. Outside of these changes, 2018 resulted in a $11.1 million increase to the net position. Total liabilities increased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities increased and non-current liabilities decreased primarily due to an increase in temporary notes and a decrease in general obligation bonds. 8 Statement of Activities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) A Condensed Statement of Activities is shown below. Program Revenues Charges for Services Operating Grants and Contnbullons Caprtal Grants and Contnbut1ons General Revenues Property Taxes Sales Taxes Other Taxes Investment Revenue Other M 1scellaneous Total Revenues Expenses. General Government Public Safety Public Vl.br1<s Public Health and Sanitation Culture and Recreation P lanmng and Development Sohd lllotlste Disposal lllotlter and Sewer Sanitation Golf Course Interest on Long Term Debt Total Expenses Increase in net assets before transfers Transfers and other extraordinary rtems Change in Net Posrtion Net Posrt1on January 1 Pnor Period Adjustment Net Position January\ restated Net Position December 31 Condensed Statement of Act1vrt1es For the Year Ended December 31 (In $000) Governmental Activrt1es 2011 2017 $ tl,411 $ tl,tlO 4,300 4,635 12,508 22,209 7,240 113 4,541 12,960 2'738 6,899 93 ~~ 62,548 58,334 12,0'13 23,892 tl,458 '256 7,040 2,369 9,781 23,120 tl,345 \126 6,880 \835 ~~ 59,145 ~ 3,403 3,523 ~~ ~~ 123,701 ffi,869 ~ 125,219 ffi,869 s '133,<153 $ 123,701 ===-=== ~ Business-Type Activities 2011 2017 $ 27,061 $ 26,703 233 153 2,382 15,190 2,<119 926 6,530 129 '[)3 2,364 15,650 2,178 852 5,891 (4,832) (4,367) ~~ 89,083 87,559 ~ 88,685 87,559 s 90,383 $ 89,083 =-==-~ 9 Total PnmaryGovemment 2011 % 2017 % 2011-2017 Change $ 37,472 42% $ 36,803 43% $ 669 4,300 4,635 5% 5% 12,508 14% 22,209 25% 7,240 8% 0% 12,0'13 15% 23,892 30% tl,458 '13% \256 2% 7,040 9% 2,369 3% 2,382 15,190 2,<119 926 9,933 ___ (1) ~ 212,784 ~ 2'13,904 $ 223,836 -=- 3% 19% 3% 1% 4,541 5% 0% 12,960 15% 2\738 25% 6,899 8% 222 0% 9,781 '13% 23,120 30% tl,345 14% \126 1% 6,880 9% \835 2% 2,364 3% 15,650 21% 2,178 3% 852 1% 9,414 ~) ~ 203,428 203,<128 s 212,784 ,_,,,,_ (241) 4,635 (<152) 471 341 (891) 4,726 2,232 772 1'13 '130 110 534 11 (460) 241 74 393 4,207 519 57 576 9,356 \120 tl,476 $ no52 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Governmental Activities. Charges for services attributable to governmental activities totaled $10.4 million, operating grants for those purposes were $4.3 million and capital grants for those purposes were $4.6 million. Charges for services and capital grants increased from the prior year, while operating grants decreased slightly. The balance was funded by general revenues. Sales taxes accounted for $22.2 million of general revenues, with property taxes providing $12.5 million. The net position increased by $8.2 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, 2018 were $59.1 million compared to $54.8 million in 2017. Governmental activities represent 74% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% 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 $21 million, or 26% of the City's total expenses. The majority of this expense ($15.2 million) is attributable to water and sewer operations, with the other activities costing a combined total of $5.7 million. Net position increased by $1.7 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, 2018 and December 31, 2017. Gowrnmental Fund Balances as of December 31, (in OOO's) Fund 2018 2017 Change General $ 6,743 $ 6,883 $ (140) Tourism and Conwntion 458 213 245 Special Gas 1,532 1,082 450 Sales Tax Capital 1,984 2,084 (100) Schilling Capital lmprowment 2, 136 3,024 (888) Debt Service 1,851 1,510 341 Capital Projects (694) 895 (1,589) SFH QalicB 1,218 1,715 (497) Other Gowrnmental Funds 3,861 4,353 (492) $19,089 $ 21,759 $ (2,670) Total governmental fund balances decreased by $2.7 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 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2018 and 2017. Consolidated Statement of Re..enues and Expenditures for Major Go..emmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2018 2017 Change Re..enues (Including Other Financing Sources) General $ 41,532 $ 41,864 $ (332) Tourism and Con..ention 1,795 1,685 110 Special Gas 1,653 1,598 55 Sales Tax Capital 8,225 8,265 (40) Schilling Capital lmpro..ement 15 12 3 Debt Service 6,602 6,659 (57) Capital Projects 13,555 12, 125 1,430 SFH QalicB 504 248 256 Other Go..ernmental Funds 4,161 4,067 94 Total Re..enues 78,042 76,523 1,519 Less Other Sources (21,622) (19,924) (1,698) Re..enues, net of other sources $ 56,420 $ 56,599 $ (179) Expenditures (Including Other Finacing Uses) General $ 41,672 $ 40,013 $ 1,659 Tourism and Con..ention 1,550 1,655 (105) Special Gas 1,203 1,328 (125) Sales Tax Capital 8,324 7,848 476 Schilling Capital lmpro..ement 904 1,049 (145) Debt Service 6,955 6,398 557 Capital Projects 15, 144 4,407 10,737 SFH QalicB 1,001 5,344 (4,343) Other Go..emmental Funds 4,653 3,399 1,254 Total Expenditures 81,406 71,441 9,965 Less Other Uses (4, 186) (4, 160) (26) Expenditures, net of other uses $ 77,220 $ 67,281 $ 9,939 Total revenues, including other sources, were down $179 thousand compared to 2017, with no funds showing substantial changes between the two years. Total expenditures increased $9.9 million over 2017. The majority of that increase was in the Capital Projects Fund as a result of increased spending on projects, specifically the Downtown Streetscape project. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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: Co1'1"4larative Sunniary Staterrent of Net Pos fon as of Decerrber 31 (in $000's) Solid Waste Disposal Water and Sew er 2018 2017 Change 2018 2017 Change Current Assets $ 6,569 $ 6,709 $ (140) $ 26,338 $ 24,014 $ 2,324 Capital Assets 2,350 3,196 (846) 86,535 86,888 (353) Deferred Outflows 72 79 (7) 610 676 (66) Total Assets and deferred outflows $ 8,991 $ 9,984 $ (993) $ 113,483 $ 111,578 $ 1,905 Current Liabilities $ 461 $ 445 $ 16 $ 3,183 $ 3,299 $ (116) Noncurrent Liabilities 2,847 3,272 (425) 27,576 27,440 136 Deferred Inflows 30 30 144 143 1 Total Liabilities $ 3,338 $ 3,747 $ (409) $ 30,903 $ 30,882 $ 21 Net investrrent in caprtal assets $ 1,570 $ 2,041 $ (471) $ 59,502 $ 60,053 $ (551) Restricted 1,512 1,512 Unrestricted 4,083 4,196 (113) 21,566 19, 131 2,435 Total Net Position $ 5,653 $ 6,237 $ (584) $ 82,580 $ 80,696 $ 1,884 <..;urrent Assets as a percentage ot current liabilities 1425% 1508% 827% 728% Sanitation Golf Course 2018 2017 Change 2018 2017 Change Current Assets $ 1,747 $ 1,787 $ (40) $ 116 $ 164 $ (48) Capital Assets 886 826 60 410 395 15 Deferred Outflow s 92 102 (10) 27 32 (5) Total Assets $ 2,725 $ 2,715 $ 10 $ 553 $ 591 $ (38) Current Liabilities $ 106 $ 87 $ 19 $ 64 $ 48 $ 16 Noncurrent Liabilities 684 733 (49) 225 240 (15) Deferred Inflows 38 38 11 11 Total Liabilities $ 828 $ 858 $ (30) $ 300 $ 299 $ Net investrrent in capital assets $ 886 $ 826 $ 60 $ 410 $ 395 $ 15 Restricted Unrestricted 1,011 1,031 (20) (157) (103) (54) Total Net Position $ 1,897 $ 1,857 $ 40 $ 253 $ 292 $ (39) Current Assets as a percentage of current liabilities 1648% 2054% 181% 342% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. I Co1T1>arative Summary of Revenues, Expenses and Changes in Net Fbsition for the Year En~ed Decerrber 31 (In$ OO's) Solid Waste Disposal Water and Sewer 2018 2017 Change 2018 2017 Change Operating Revenues $ 3,116 $ 3,185 $ (69) $ 20,207 $ 19,861 $ 346 Operating Expenses 2,353 2,320 33 14,348 14,721 (373) Operating Income 763 865 (102) 5,859 5,140 719 Non-operating revenues (expenses) 17 (20) 37 (667) (832) 165 .,come (Loss) before Transfers 780 845 (65) 5,192 4,308 884 Transfers in (out) (690) (540) (150) (3,650) (3,450) (200) Change in Net Fbs ition 90 305 (215) 1,542 858 684 Net Fbsition January 1 6,237 5,932 305 80,697 79,838 859 Restatement (674) (674) 341 341 Net Fbsition January 1, restated 5,563 5,932 (369) 81,038 79,838 1,200 Net Fbsition Decerrber 31 $ 5,653 $ 6,237 $ (584) $ 82,580 $ 80,696 $ 1,884 Sanitation Golf Course 2018 2017 Change 2018 2017 Change Operating Revenues $ 3,006 $ 2,886 $ 120 $ 884 $ 876 $ 8 Operating Expenses 2,419 2,178 241 926 852 74 Operating Income 587 708 (121) (42) 24 (66) Non-operating revenues (expenses) 11 6 5 661 661 .,come (Loss) before Transfers 598 714 (116) (41) 24 (65) Transfers in (out) (492) (377) (115) Change in Net Fbs ition 106 337 (231) (41) 24 (65) Net Fbsition January 1 1,856 1,520 336 292 268 24 Restatement (66) (66) 2 2 Net Fbsition January 1, restated 1,790 1,520 270 294 268 26 Net Fbsition Decerrber 31 $ 1,896 $ 1,857 $ 39 $ 253 $ 292 $ (39) 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2018. 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, 2018 was $300,696, 162 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2018 and 2017: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Business-type Gowrnmental Activity Activity Total 2018 2017 2018 2017 2018 Equipment, Furniture and Fixtures $ 2,374 $ 2,040 $ 1,489 $ 1,484 $ 3,863 Vehicles 2,957 3,521 1,208 1,041 4, 165 Buildings and lmprowments 31,759 33,079 8,941 9,362 40,700 Land 24,094 24,093 2,060 1,542 26, 154 Land Leased Under Capital Assets 423 423 Infrastructure 116,365 114,958 72,312 75,727 188,677 Leasehold lmprowments 326 326 Construction in Progress 32,217 28,909 4, 171 2,150 36,388 Total $210,515 $ 206,600 $90,181 $ 91,306 $ 300,696 Changes to capital assets may be summarized as follows: Changes to Capital Assets, 2018 (in OOO's) Gowmmental Activity Additions $ 15,859 Retirements (5,898) Depreciation (5,663) Net Additions $ 4,298 =-===-'"'""'- Business-Type Activity $ 3,221 $ (327) (4,113) (1,219) Total $ 19,080 (6,225) (9,776) $ 3,079 2017 $ 3,524 4,562 42,441 25,635 190,685 31,059 $297,906 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2018 (Unaudited) 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, 2018 totaled $57,250,888. In addition, there were temporary notes outstanding in the amount of $18, 123,505, as well as a financing operating lease in the amount of $845,338. Business-type activities had $11,898,051 in revenue bonds outstanding, as well as $5,557,686 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 $10,632,351. The City engaged in the following debt transactions during 2018: • On July 30th, the City issued 2018-1, $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 2018-2, $13,500,000 in temporary notes to pay off the 2018-1 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 271h, the City issued 2018A, $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, 2018, 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 BASIC FINANCIAL STATEMENTS CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December31, 2018 Pnma~ Government Total Total Governmental Business-type ActJV1t1es Activities ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets Cash and investments Receivables (net of allowance for uncolleclibles) Accounts Taxes Interest Inventory Restncted cash and investments Prepaid expenses Total current assets Noncurrent assets Capital assets, nondepreciable Construction in progress Land Capital assets. depreciable Less Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources KPERS OPEB deferred outnows of resources OPE B deferred outnows of resources Pension deferred outnows of resources Deferred charge on bond issuance Total deferred outnows of resources Total assets and deferred outflows of resources L1abll1bes Current habdrtles Accounts payable Reta1nage payable Accrued habll1bes Accrued interest payable DepoSlts payable Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of special assessment debt payable Current portion of general obhgabon bonds payable Total current habllrtles Noncurrent llab1hbes Accrued hab1hbes Compensated absences Securrty deposits returnable Net OPEB obhgat1on Net KPERS OPEB obhgabon Net pension hab1hty Loans payable Revenue bonds payable Special assessment debt payable General obhgabon bonds payable Landfill post-closure care hab1l11ies Total noncurrent hab1ht1es Total hab1hbes Deferred 1nnows of resources Unavailable revenue -property taJ<es KPERS OPEB deferred 1nnows of resources Pension deferred innows of resources Total deferred 1nftows of resources Total hab1ht1es and deferred inflows of resources Net Pos1bon Net investment 1n capital assets Restncted for Permanent funds Expendable Debtsef"\llce Unrestncted Total net posrtlon 34,302,149 32,140,053 1,951,605 2, 148,480 12,744,529 298,248 16 263,000 481,548 1,516,561 51,076,092 34,770,097 32,217,207 4,171,178 24,516,334 2,059,834 275,280,664 151,140,172 121,498,751 67,190,476 210,515,454 90,180,708 261,591,546 124,950,805 98,101 42,043 71,407 9,096 5,260,473 533,024 96,738 217.652 5,526,719 801,815 $ 267, 118,265 $ 125,752,620 1,491,889 348,222 846,849 226,977 564,494 107,944 249,347 183,858 1,611,375 383,182 18,123,505 527,499 728,696 5,877,280 1,166,063 28,623,336 3,813,844 55,264 1,204,110 286,335 3,093,240 394,062 382,848 164,078 27,918,983 3,114.818 12, 185,053 10,104,852 11,169,355 46,091,030 4,116,515 1,981,498 90,930,528 31,331 513 119,553 864 35,145 357 12,267,726 9,290 3,981 1,835 545 220,027 14,112,561 224,008 $ 133,666,425 35,369,365 $ 144,845,530 62,367,728 514,201 1,851,358 1,512,125 [13,759,249] 26,503,402 $ 133,451,840 90,383,255 The notes to the basic financial statements are an integral part of this statement. 16 Com~nent Units Total Salina Salina Pnmary Housing Airport Government Authon~ Authon~ 66,442,202 2.~.471 255,390 4,100,085 12,548 145,403 12,744,529 298,264 744,548 36,351 1,516,561 136,383 42,457 7,098 85846,189 2,232,210 407,891 36,388,385 161,977 8,921 26,576,168 1,454,559 9,965,118 426,420,836 8,403,404 78,425,642 188,689,227 4,834,319 44,538,812 300,696, 162 5,185,621 43,860,869 386,542,351 7,417,831 44,268,760 140,144 4,294 80,503 5,793,497 69,118 111,199 314,390 1,266,357 6 328,534 69118 1,381,850 $ 392,870,885 7,486,949 45,650,610 1,840,111 48,850 1,086,778 1,073,826 564,494 35,803 73,104 357,291 218,063 183,858 96,092 1,994,557 2,759 18,123,505 527,499 728,696 2,153 7,043,343 1,967,000 32,437,180 183,504 3,347,098 55,264 23,020 1,490,445 24,833 48,680 3,487,302 546,926 8,886 11,126 31,033,801 345,226 605,630 22,289,905 11,169,355 4,901 50,207,545 19,395,792 1,981,498 122 ,262, 041 401,965 20,066,129 154 699,221 585,469 23,413,227 12,267,726 7,277 69,884 13,271 184 3,964 2,055,572 21 346 64,402 14 336,569 28,807 138,250 $ 169,035,790 $ 614,276 $ 23,551,477 $ 207,213,258 5,330,745 22,491,023 514,201 14,718 3,363,483 12 744,153 1,527,210 [391,890) $ 223,835,095 6,872,673 22,099,133 Governmental •clivities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long-term debt Total governmental acbvilles Business-type •clivities: Solid Waste Disposal Water and Sewer Sarntabon Go~Course Total business-type activities Total pnmary government Component units: Salina Housing Authority Salina Airport Authonty Total component unrts CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2018 Net [Expenses] Revenue and Program Revenues Operating Caprtal Charges for Grants and Grants and E~enses Services Contnbullons Contnbut1ons s 12,012,840 s 3,569,264 s 667,179 s 4,634,742 23,891,543 4,815,110 1,134,717 10,458,094 284,724 1,872,213 1,256,142 46,990 266,676 7,039,683 1,544,676 200,676 2,369,562 149,864 158,041 2, 117,439 59,145,303 10,410,628 4,299,502 4,634,742 2,382,082 3,097,271 15,190,160 20,202,022 2,418,930 3,005,740 926,287 755,655 20,917,459 27,060,688 s 80,062, 762 $37,471,316 s 4,299,502 s 4,634,742 s 2,604,085 s 6,019,332 335,160 s 2,027,232 s 2,499,892 117,316 1,474,356 s 8,623,417 s 2,835,052 s 2,027,232 $ 1,591,672 General Revenues: Property taxes levied for General purposes Debt service Motor vehicle tax General purposes Sales tax General purposes Selective purposes Other taxes General purposes Investment revenues Miscellaneous Transfers, net Subtotal general revenues Change 1n net position Net posruon -beginning Pnor penod adjustment Net pos1t1on -beginning, restated Changes 1n Net Position Pnmary Government Total Total Governmental Business-type Activities Activities s [3,141,655] s [17,941,716] [8,301,157] [942,476] [5,294,331] [2,061,657] [2,117,439] [39,800,431) 715,189 5,011,862 586,810 [170,632) 6,143,229 [39,800,431) 6,143,229 8,623,057 2,456,875 1,428,001 13,292,626 8,916,814 7,240,099 182,895 233,355 1,061,810 152,814 4,831,500 [4,831,500) 48,033,677 [4,445,331) 8,233,246 1,697,898 123,700,850 89,082,816 1,517,744 [397,459) 125,218,594 88,685,357 Total Primary Government s [3,141,655] [17,941,716] [8,301,157] [942,476] [5,294,331] [2,061,657] [2, 117 ,439] [39,800,431) 715,189 5,011,862 586,810 [170,632) 6,143,229 [33,657,202) 8,623,057 2,456,875 1,428,001 13,292,626 8,916,814 7,240,099 416,250 1,214,624 43,588,346 9,931,144 212,783,666 1,120,285 213,903,951 s Component Units Salina Housing Authono/ [124,377] [124,377) 15,124 12,543 27,667 (96,710) 6,976,479 [Z,096) 6,969,383 s Salina Airport Authono/ [2,045,084) [2,045,084) 2,338,967 3,745 5,375 2,348,087 303,003 21,808,184 [12,054) 21,796,130 Net position -ending $133,451,840 $ 90,383,255 $223,835,095 $6,872,673 $22,099,133 The notes to the basic financial statements are an integral part of this statement. 17 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2018 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,210,942 $ 853 $ 1,266,574 $ 2,263,217 Restricted cash Receivables (net) Accounts 1,492,279 457,529 Taxes 9,749,815 320,324 Interest 298,248 Inventory 151,514 Due from other funds 24,544 Total assets $ 16,927,342 $ 458,382 $ 1,586,898 $ 2,263,217 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 542,039 $ -$ 26,383 $ 121,237 Retainage payable 28,056 157,656 Temporary notes payable Due to other funds Total liabilities 542,039 54,439 278,893 Deferred inflows of resources Unavailable revenue -property taxes 9,576,319 Unavailable revenue -other 66,407 Total deferred inflows of resources 9,642,726 Fund balance: Nonspendable 151,514 Restricted 458,382 1,359,237 Committed 1,436,972 Assigned 340,106 173,222 547,352 Unassigned 6,250,957 Total fund balances 6,742,577 458,382 1,532,459 1,984,324 Total liabilities, deferred inflows of resources and fund balances $ 16,927,342 $ 458,382 $ 1,586,898 $ 2,263,217 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ $ 2,151,875 $ 1,801,968 $ 13,270,861 $ 7,663 $ 4,033, 111 $ 30,007,064 1,516,561 1,516,561 494,287 1,797 2,445,892 2,674,390 12,744,529 298,248 151,514 196,939 221,483 2, 151,875 $ 4,476,358 $ 13,467,800 $ 2,018,511 $ 4,034,908 $ 47,385,291 15,749 $ -$ 352,630 $ 243, 131 $ 149,019 $ 1,450, 188 300,662 360,475 846,849 13,508,505 13,508,505 196,939 24,544 221,483 15,749 14, 161,797 800,545 173,563 16,027,025 2,625,000 12,201,319 66,407 2,625,000 12,267,726 151,514 1,851,358 978,694 4,647,671 1,955,918 133,122 1,217,966 2,581,440 7,325,418 180,208 325,755 1,566,643 [827,119] [24,544] 5,399,294 2, 136, 126 1,851,358 [693,997] 1,217,966 3,861,345 19,090,540 2,151,875 $ 4,476,358 $ 13,467,800 $ 2,018,511 $ 4,034,908 $ 47,385,291 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2018 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPES obligation Net pension liability Temporary notes payable Bonds payable Loans payable 331,845,971 121,346, 178 2,756,097 3,470,619 27,764,434 4,615,000 51,968,310 12,185,053 $ 19,090,540 96,738 210,499,793 5,403,295 [1,833,402) [494,287) 3,556,620 Accrued interest on the bonds 107,944 [102,867,457) Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 133,451,840 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2018 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,409,449 $ -$ -$ Delinquent taxes 213,608 Motor vehicle taxes 1,120,440 General sales taxes 13,292,626 Selective sales taxes 8,203,532 Other taxes 5,444,880 1,795,219 Intergovernmental 1,144,717 1,446,395 Special assessments Licenses and permits Charges for services 6,366,094 Investment revenue 45,477 5 7,234 21,363 Donations Miscellaneous 452,916 39,146 Total revenues 36,490,207 1,795,224 1,492,775 8,224,895 EXPENDITURES: Current General government 5,648,579 Public safety 22,952,925 Public works 5,350,056 468,535 Public health and sanitation 793,780 Culture and recreation 4,494,713 Planning and development 766,471 737,957 Miscellaneous Capital outlay 860,115 734,079 5,755,835 Debt service Principal retirement Interest and other charges Total expenditures 40,866,639 737,957 1,202,614 5,755,835 Excess [deficiency] of revenue and other sources over [under] expenditures and other (uses] [4,376,432) 1,057,267 290,161 2,469,060 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Capital contribution Transfers in 5,041,500 160,000 Transfers [out] [805,000] [812,346) [2,568,350) Total other financing sources [uses] 4,236,500 [812,346) 160,000 [2,568,350] Net change in fund balance [139,932] 244,921 450,161 [99,290] Fund balance -Beginning of year 6,882,509 213,461 1,082,298 2,083,614 Prior period adjustment Fund balance -Beginning of year, restated 6,882,509 213,461 1,082,298 2,083,614 Fund balance -End of year $ 6,742,577 $ 458,382 $ 1,532,459 $ 1,984,324 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,394, 143 $ -$ -$ -$ 10,803,592 62,732 276,340 307,561 1,428,001 13,292,626 713,282 8,916,814 7,240,099 423,318 1,282,570 4,297,000 1,545,758 1,545,758 2,500 2,500 492,917 479,229 7,338,240 15,186 21,230 10,707 36,190 157,392 237,660 237,660 336,904 55,048 884,014 15,186 4,331,424 760,222 503,624 2,806,479 56,420,036 5,648,579 22,952,925 343,811 6,162,402 442,359 1,236,139 1,760,504 6,255,217 38,678 641,823 2,184,929 35 35 903,638 6,759,029 761,892 569,901 16,344,489 5,252,865 8,180,000 810,000 14,242,865 1,702,255 204,886 200,044 84,535 2, 191,720 903,638 6,955,120 15,143,915 1,000,614 4,652,968 77,219,300 [888,452] [2,623,696] [14,383,693] [496,990] [1,846,489] [20,799,264] 2,090,000 2,090,000 6,000,000 6,000,000 69,837 69,837 4,634,742 4,634,742 2,270,782 1,354,914 8,827,196 [4, 185,696] 2,270,782 12,794,579 1,354,914 17,436,079 [888,452] [352,914] [1,589,114] [496,990] [491,575] [3,363,185] 3,024,578 1,509,863 895,117 1,714,956 4,352,920 21,759,316 694,409 694,409 3,024,578 2,204,272 895,117 1,714,956 4,352,920 22,453,725 $ 2,136,126 $ 1,851,358 $ [693,997] $ 1,217,966 $ 3,861,345 $ 19,090,540 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2018 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the [4,493] 10,493,901 [6, 183,227] $ [3,363, 185] 4,306,181 74,281 1,197,416 [370,373] [87,828] 38,061 treatment of long-term debt and related items. [7,978,572] 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 $ 8,233,246 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, 2018 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 8,409,449 $ 8,625,000 $ 8,625,000 Delinquent taxes 213,608 180,000 180,000 Motor vehicle taxes 1,120,631 1,090,219 1,090,219 General sales tax 13,292,626 13,427,924 13,427,924 Other taxes 5,444,880 6,980,396 6,980,396 Intergovernmental 1,144,717 1,202,000 1,202,000 Charges for services 5,585,009 5,302,753 5,302,753 Investment revenue 52,956 Miscellaneous 452,920 450, 175 450, 175 Total revenues 35,716,796 37,258,467 37,258,467 Expenditures General government 5,270,589 3,566,591 3,566,591 Public safety 22,864,626 21, 199,918 21, 199,918 Public works 5,350,076 5,656,606 5,656,606 Public health and sanitation 793,780 Culture and recreation 4,612, 107 5,207,030 5,207,030 Planning and development 766,471 1,960, 187 1,960,187 Capital outlay 1,076,672 1,750,000 1,750,000 Total expenditures 40,734,321 39,340,332 39,340,332 Excess [deficiency] of revenues over [under] expenditures [5,017,525) [2, 081, 865) [2,081,865) Other financing sources [uses) Transfers 1n 5,041,500 3,390,000 3,390,000 Transfers [out] [805,000) [2,892,809) [2,892,809) Total other financing sources (uses) 4,236,500 497 191 497, 191 Excess (deficiency) of revenues and other sources over (under) expenditures and other (uses] (781,025) (1,584,674) (1,584,674) Unreserved fund balance, January 1 5,067, 124 1,584,674 1,584,674 Prior year cancelled encumbrances 835 Unreserved fund balance, December 31 4,286,934 $ -$ - Reconc11iat1on to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 298,248 1,492,279 9,749,815 151,514 (9,576,319] 340, 106 $ 6,742,577 See independent auditor's report on the financial statements 22 Variance with Final Budget Positive [Negative] $ (215,551] 33,608 30,412 (135,298] (1,535,516) (57,283) 282,256 52,956 2,745 [1,541,671) (1,703,998) [1,664, 708) 306,530 (793,780] 594,923 1, 193,716 673,328 [1,393,989) [2,935,660) 1,651,500 2,087,809 3,739,309 803,649 3,482,450 835 $ 4,286,934 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, 2018 Budgeted Amounts Actual Original Final Revenues Other taxes $ 1,814,240 $ 1,639,980 $ 1,814,240 Investment revenue 5 180 Total revenues 1,814,245 1,640,160 1,814,240 Expenditures Planning and development 737,956 893,000 1,001,894 Total expenditures 737,956 893,000 1,001,894 Excess [deficiency] of revenues over [under] expenditures 1,076,289 747, 160 812,346 Other financing sources [uses] Transfers [out] [812,346] [685,000] [812,346] Total other financing sources [uses] [812,346] [685,000] [812,346] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 263,943 62,160 Unreserved fund balance, January 1 [263,090] 113,974 847 Unreserved fund balance, December 31 853 $ 176,134 $ 847 Reconciliation to GAAP Accounts receivable 457,529 GAAP Fund Balance, December 31 $ 458,382 See independent auditor's report on the financial statements. 23 Variance with Final Budget Positive [Negative] $ 5 5 263,938 263,938 263,943 263,943 [263,937] $ 6 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, 2018 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,448,959 $ 1,406,420 $ 1,406,420 Miscellaneous 39,146 Investment revenue 7,234 6,000 6,000 Total revenues 1,495,339 1,412,420 1,412,420 Expenditures Public works 468,535 486,959 486,959 Capital outlay 897,350 946,243 946,243 Total expenditures 1,365,885 1,433,202 1,433,202 Excess [deficiency] of revenues over [under] expenditures 129,454 [20,782] Other financing sources [uses] Transfers in 160,000 160,000 Total other financing sources [uses] 160,000 160,000 Excess [deficiency] of revenues and other sources over [under] 289,454 139,218 expenditures and other [uses] Unreserved fund balance, January 1 749,459 512,412 Unreserved fund balance, December 31 1,038,913 $ 651,630 $ Reconciliation to GAAP Taxes receivable 320,324 Current year encumbrances 173,222 GAAP Fund Balance, December 31 $ 1,532,459 See independent auditor's report on the financial statements. 24 [20,782] 160,000 160,000 139,218 512,412 651,630 Variance with Final Budget Positive [Negative] $ 42,539 39, 146 1,234 82,919 18,424 48,893 67,317 150,236 150,236 237,047 $ 387,283 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, 2018 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,203,531 $ 8,043,656 $ 8,269,993 Investment revenue 21,363 5,000 5,000 Total revenues 8,224,894 8,048,656 8,274,993 Expenditures Capital outlay 5,934,357 4,620,500 6,470,500 Total expenditures 5,934,357 4,620,500 6,470,500 Excess [deficiency) of revenues over [under] expenditures 2,290,537 3,428,156 1,804,493 Other financing sources [uses] Transfers [out] [2,568,350) [3,750,000) [2,500,000) Total other financing sources [uses] [2,568,350) [3,750,000) [2,500,000) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses) [277,813) [321,844) [695,507] Unreserved fund balance, January 1 1,658,876 785,304 1,797,359 Prior year cancelled encumbrances 55,909 Unreserved fund balance, December 31 1,436,972 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 547,352 GAAP Fund Balance, December 31 $ 1,984,324 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [66,462] 16,363 [50,099) 536, 143 536,143 486,044 [68,350) [68,350) 417,694 [138,483) 55,909 $ 335,120 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2018 Business-Type Act1V1bes Ente!Ense Funds Solid Waste Water and Assets and deferred outllows of resources Disl!osal Sewer Sanitation Golf Course Current assets Cash and investments $ 6,379,586 $ 24,185,482 $1,493,590 $ 81,395 Receivables (net of allowance for uncoUectibles) Accounts 189,486 1,705,202 253,792 Interest 16 Inventory and prepaid supplies «7,071 34,477 Total current assets 6,569,088 26,337,755 1,747,382 115,872 Capital assets Nondepreciable capital assets: Construction in progress 4,171,178 Land 682,000 1,362,834 15,000 Depreciable caprtal assets Capital assets 11,313,026 136,225,697 2,388,377 1,213,072 Less: accumulated depreciation 9,6«,947 55,224,969 1,502,563 817,997 Total capital assets 2,350,079 86,534,740 885,814 410,075 Total assets 8,919,167 112,872,495 2,633,196 525,947 Deferred outllows of resources. KPERS OPEB deferred outllows of resources 4,204 28,029 7,007 2,803 OPEB deferred outllows of resources 1,113 5,7« 1,723 516 Pension deferred outllows of resources 66,559 359,237 83,106 24,122 Deferred charge on bond issuance 217,652 Total deferred outllows of resources 71,876 610,662 91,836 27,«1 Total assets and deferred outllows of resources $ 8,991,043 $113,483,157 $ 2,725,032 $ 553,388 Liab1hbes and deferred inftows of resources Current liabilities Accounts payable $ 24,243 $ 279,295 $ 25,454 $ 19,230 Retainage payable 226,977 Interest payable 5,975 243,372 Meter deposits payable 183,858 Current porbon of compensated absences payable 40,428 217,595 80,342 «.817 Current porbon of accrued claims payable Current portion of loans payable 527,499 Current porbon of general obligation bonds payable 390,000 776,063 Current porbon of revenue bonds payable 728,696 Total current liab1hties 460,646 3,183,355 105,796 64,047 Noncurrent liab1ht1es. Compensated absences payable 30,210 162,598 60,037 33,490 Accrued claims payable Net OPEB obligation 48,232 248,841 74,624 22,365 Net KPERS OPEB obligation 16,408 109,385 27,346 10,939 Net pension habilily 380,308 2,054,012 522,400 158,098 Payable from restricted assets Loans payable 10,104,852 General obhgat1on bonds payable 390,000 3,726,515 Revenue bonds payable 11,169,355 Landfill post-closure care liabilities 1,981,498 Total noncurrent liabilities 2,846,656 27,575,558 684,407 224,892 Total habilities 3,307,302 30,758,913 790,203 288,939 Deferred inftows of resources KPERS OPEB deferred inftows of resources 398 2,654 664 265 Pension deferred inftows of resources 29,965 141,462 37,524 11,076 Total deferred inflows of resources 30,363 144,116 38,188 11,341 Total liabilrties and deferred inftows of resources $ 3,337,665 $ 30,903,029 $ 828,391 $ 300,280 Net position Net investment in caprtal assets $ 1,570,079 $ 59,501,760 $ 885,814 $ 410,075 Restncted Restncted for bond rebrement 1,512,125 Unrestncted 4,083,299 21,566,243 1,010,827 [156,96ZJ Total net pos1bon $ 5,653,378 $ 82,580,128 $1,896,641 $ 253,108 The notes to the basic financial statements are an integral part of this statement. 26 Total Internal Enterpnse SeMce Funds Funds $ 32,140,053 $.ol,295,085 2,148,480 16 481,548 111,486 34,770,097 4,406,571 4,171,178 2,059,834 151,140,172 168,234 67,190,476 152,573 90,180,708 15,661 124,950,805 4,422,232 42,043 1,401 9,096 533,024 25,285 217,652 801,815 26,686 $ 125,752,620 $4,448,918 $ 348,222 $ 41,701 226,977 249,347 183,858 383,182 33,989 564,494 527,499 1,166,063 728,696 3,813,844 640,184 286,335 25,399 55,264 394,062 164,078 5,469 3,114,818 154,549 10,104,852 4,116,515 11,169,355 1,981,498 31,331,513 240,681 35,145,357 880,865 3,981 133 220,027 11,300 224,008 11,433 $ 35,369,365 $ 892,298 $ 62,367,728 $ 15,661 1,512,125 26,503,402 3,540,959 $ 90,383,255 $3,556,620 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2018 Business-Type Activities. Ente!Erise Funds Total Solid Waste Water and Enterprise Disf:!osal Sewer Sanitation Golf Course Operating revenues Charges for services $ 3,097,271 $ 20,202,022 $3,005,740 $ 755,655 $ Miscellaneous 18,894 5,101 128,819 Total operating revenues 3,116,165 20,207,123 3,005,740 884,474 Operating expenses General government Public works 1,506,857 11,023,621 2,256,647 Recreation 890,552 Depreciation 846,019 3,324,365 162,283 35,735 Total operating expenses 2,352,876 14,3"47,986 2,418,930 926,287 Operating income [loss] 763,289 5,859,137 586,810 (41,813] Nonoperating revenues [expenses) Investment revenue 46,505 175,346 10,882 622 Interest expense (29,206) (835,262) Accretion of bond premium 11,560 Amortization of bond issuance costs [18,472) Total nonoperating revenues [expenses) 17,299 [666,828) 10,882 622 Income [loss) before transfers 780,588 5,192,309 597,692 [41,191) Transfers from [to] other funds Transfers in Transfers [out) [690,000J [3,650,000) [491,500) Total transfers [690,000J [3,650,000) [491,500) Change in net position 90,588 1,542,309 106, 192 (41,191) Net position, January 1 6,237,212 80,696,866 1,856,553 292, 185 Prior period adjustment [67"4,422) 340,953 [66,104) 2,114 Net position, January 1, restated 5,562,790 81,037,819 1,790,449 294,299 Net position, December 31 $ 5,653,378 $82,580,128 $ 1,896,641 $ 253,108 $ The notes to the basic financial statements are an integral part of this statement. 27 Funds 27,060,688 152,814 27,213,502 14,787, 125 890,552 4,368,402 20,046,079 7,167,423 233,355 (864,468) 11,560 [18,472] [638,025) 6,529,398 [4,831,500) [4,831,500) 1,697,898 89,082,816 [397,459) 88,685,357 90,383,255 Internal Service Funds $ 8,747,300 73,258 8,820,558 7,830,946 7,699 7,838,645 981,913 25,503 25,503 1,007,416 190,000 190,000 1,197,416 2,363,597 [4,393] 2,359,204 $3,556,620 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2018 Business-Type Act1v1t1es Enter11nse Funds SohdWaste Water and Dis112sal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $ 3, 101,871 $19,995,276 $2,970,093 $ 755,655 Cash paid to suppliers of goods or services [902,799] [7,214,728] [1,313,103] [386,081] Cash paid to employees [606,310] [3,951,533] [939,329] [502,013] Other operating receipts 18,894 5, 101 128,819 Net cash provided by [used 1n] operating act1v1t1es 1,611,656 8,834, 116 717,661 [3,620) Cash nows from capital and related financing act1v1t1es Purchase and construction of capital assets [2,783,648] [312,009] [52,880] Proceeds from loans 2,354,809 Principal payments -loans [585,268] Principal payments -general obligation bonds [375,000] [752,342] Pnncipal payments -revenue bonds [705,000] Interest paid [34, 168) [817,579) Net cash provided by [used 1n] capital and related financing act1v1t1es [409,168) [3,289,028) [312,009) [52,880) Cash flows from 1nvest1ng activities Interest received 46,505 175,346 10,882 622 Cash flows from noncap1tal financing activ1t1es Transfers in Transfers [out] [690,000) [3,650,000) [491,500) Net cash provided by [used 1n] noncapital financing act1v1t1es [690,000) [3,650,000) [491,500) Net increase [decrease] in cash and cash equivalents 558,993 2,070,434 [74,966) [55,878) Cash and cash equivalents, January 1 6,515,002 22, 115,048 1,568,556 137,273 Pnor penod adjustment [694,409) Cash and cash equivalents, January 1, restated 5,820,593 22, 115,048 1,568,556 137,273 Cash and cash equivalents, December 31 $6,379,586 $ 24, 185,482 $1,493,590 $ 81,395 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,822,895 $ 8,749,455 [9,816,711] [7,495,431] [5,999, 185] [297,532] 152,814 73,257 11,159,813 1,029,749 [3, 148,537] 2,354,809 [585,268] [1, 127,342] [705,000] [851,747) [4,063,085) 233,355 25,503 190,000 [4,831,500) [4,831,500) 190,000 2,498,583 1,245,252 30,335,879 3,049,833 [694,409) 29,641,470 3,049,833 $ 32, 140,053 $4,295,085 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2018 Business-Type Act1v1t1es. Enterprise Funds Total Internal Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating act1v1ties Operating income [loss] $ 763,289 $ 5,859, 137 $ 586,810 $ (41,813] $ 7, 167,423 Adjustments to reconcile operating income (loss] to net cash provided by [used in] operating act1v1ties Depreciation expense 846,019 3,324,365 162,283 35,735 4,368,402 [Increase] decrease 1n accounts receivable 4,600 [214,490] (35,647] [245,537] [Increase] decrease 1n inventory (38,509] (7,787] (46,296] [Increase] decrease in deferred outftows 6,593 46,400 10,214 3,995 67,202 Increase (decrease] in accounts payable (642] [255,816] 6,779 9,866 [239,813] Increase (decrease] in retainage payable 216,296 216,296 Increase [decrease] in accrued compensated absences 7,756 602 12,440 6,372 27, 170 Increase (decrease] in da1ms payable Increase [decrease] in net pension liability (22,019) (148,227) (35,024] (13,522] (218,792] Increase [decrease] in net KPERS OPEB obligation 3,230 21,534 5,383 2,154 32,301 Increase [decrease] 1n net OPEB obligation 2,507 12,934 3,879 1, 162 20,482 Increase [decrease] 1n meter deposits payable 7,744 7,744 Increase (decrease] 1n deferred 1nftows 323 2,146 544 218 3,231 Net cash provided by [used in] operating acllv1t1es $ 1,611,656 $ 8,834, 116 $ 717,661 $ [3,620) $11,159,813 The notes to the basic financial statements are an integral part of this statement. 29 $ Service Funds 981,913 7,699 53,639 4,554 (16, 189] 5,818 2,154 (11,010] 1,076 95 $ 1,029,749 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2018 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 312,065 $ 312,065 $ 312,065 $ 312,065 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469 S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31, 2018 Total change in unencumbered cash, year ended December 31, 2018 Total cash receipts, year ended December 31, 2018 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building $ Authority (Audited) 1,294,585 121,544 2,417,371 478, 114 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 .75 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 2019. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5-15 6-10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, granters, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Maior Go\emmental Funds Tounsm Schilling Other Total and Special Sales Tax Caprtal Debt Capital SFH Gowmmental Gowmmental General Con1.ent1on Gas Capital l:n Pr2\em ent SeN1ce Pro1ects QahcB Funds Funds Fund Balances Nonspendable for lnwntory $ 151,514 $ $ $ $ $ $ $ $ 151,514 Restncted for Public works 1,359,237 1,359,237 Public health and sanitation 234 234 Culture and recreation 122,447 122,447 Plam1ng and dewlopment 458,382 222,360 680,742 Debi payments 1,851,358 633,653 2,485,011 Committed for PL.bl1c safety 192,399 192,399 Culture and recreation 475,773 475,773 Plam1ng and dewlopment -1,217,966 147,250 1,365,216 Cemetery 508,366 508,366 Caprtal 1mprowments 1,436,972 1,955,918 133,122 1,257,652 4,783,664 Assigned for General go\emment 20,250 20,250 Pubhc safety 33,216 175,681 208,897 Public works 9,000 9,000 Culture and recreation 5,404 150,074 155,478 Capital 1mpro1.ements 272,236 173,222 547,352 180,208 1,173,018 Unassigned 6,250,957 (827,119] (24,544] 5,399,294 --- --- Total Fund Balances ~ ~ $1,532,459 ~ $2,136,126 ~ $ (693,997] ~ $ 3,861,345 $19,090,540 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 2018 budget was amended for the Tourism and Convention Fund, Debt Service Fund and Golf Course Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 91h CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2018 in the Bicentennial Fund, Business Improvement District Fund and Special Parks and Recreation Fund, which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31, 2018, the statutory limit for the City was $146,336,377, providing a debt margin of $78,095,920. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 3. RESTATEMENT OF EQUITY Note4. A. The City implemented GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the KPERS and health insurance postemployment benefits for the year ended December 31, 2018. Additionally, following the close of the previous fiscal year, it was discovered that several capital assets were misclassified or incorrectly recorded and that a portion of the City's long-term liabilities had been misclassified between funds. According, the beginning net position/fund balances were restated, the effects of which are as follows: Debt Solid Waste Water and Central Governmental Service Disposal Sewer Sanitation Golf Course Garage ~ Fund Elim! Elim! Elim! .E.ulli! .E.ulli! Net Pos1t1on/Fund Balance, $ 123,700,850 $ 1,509,863 $ 6,237,212 $ 80,696,866 $ 1,856,553 $ 292,185 $ 10,853 December31, 2017 Capital Asset Adjustment (382,983) 187, 181 (89,654) (2,514) Adoption of GASB 75 1,308,967 19,987 51, 123 23,550 4,628 (4,393) Long-term L1abht1es Adjustment 591 760 694,409 [694,409) 102,649 Net Pos1t1on/Fund Balance, December31, 2017, Restated $ 125,218,594 $ 2,2041272 $ 51562?90 $ 81,037,819 $ 1,790A49 $ 294,299 $ 6A60 DETAILED NOTES ON ALL FUNDS 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, 2018, the City has the following investments: ln\Estment Type Fair Value Kansas Municipal lnwstment Pool $ 311,705 S&P AAAf/51+ Total fair value $ 311,705 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018 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, 2018, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,029,223, $361,543, and $125,795, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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: Pnmary Government Receivables Accounts Taxes nterest Gross receivables Less alowance for uncollect1bles Total Primary Government Receivables Accounts Taxes nterest Gross receivables Less allowance for uncoUectibles Total Component Untts Sahna Airport Authority Accounts Less anowance foruncollect1bles Total Sahna Arport Authority Salina Housing Authonty Accounts Less: aUowance foruncollect1bles nterest Total Salina Housing Authonty Total General $ 6,847,561 9,749,815 298,248 16,895,624 [5,355,282) $ 11,540,342 C. lnterfund Receivables and Payables Tounsm and Special Convention Gas $ 457,529 $ 320,324 457,529 320,324 ---$ 457,529 $ 320,324 Debt SFH Other Service QahcB Governmental $ -$ 494,287 $ 2,428 2,674,390 2,67<4,390 494,287 2,428 [631] $2,674,390 $ 494,287 $ 1,797 Sohd Water Waste and Disposal Sewer Santtat1on $ 189,486 $ 3, 176,509 $ 472,773 16 189,502 3,176,509 472,773 [1,471,307) [218,981] $ 189,502 $ 1,705,202 $ 253,792 The composition of interfund balances as of December 31, 2018, is as follows: Fund Types Due From Due To General Fund $ 24,544 $ Capital Project Fund 196,939 SFH QalicB Fund 196,939 Police Grants Fund 24,544 $ 221,483 $ 221,483 Subtotal $ 7,801,805 12,7<44,529 298,248 20,844,582 [5,355,913) $ 15,488,669 Total $ 11,640,573 12,744,529 298,264 24,683,366 [7,0<46,201] $ 17,637, 165 $ 145,403 145,403 12,901 [790) 437 12,5<48 $ 157,951 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2018, was as follows: Balance AdJ. Bal. Balance 12/31/2017 Ad1ustmen1s 12/3112017 Add1bons Retiremen1s 12/31/2018 C1tygovemmental activibes· Governmental acti111bes. Capital assets, not being depreciated Construction in progress $ 28,909,568 $ [203,661) $ 28,705,907 $ 8,876,538 $ 5,365,238 $ 32,217,207 Land 24,092,859 676 24,093,535 24,093,535 Leased land under capital lease 422,799 422,799 Capital assets, being depreciated lnfras tructure 199,315,338 [50,398) 199,264,940 5,365,238 204,630, 178 Buildings and improvements 53,009,679 5,179 53,014,858 53,014,858 Vehicles 10,386,499 [105,845) 10,280,654 352,834 442,158 10,191,330 Equipment, furniture and fixtures 6,614,011 79,349 6,693,360 515,538 90,793 7,118,105 Leasehold improvements 326,193 326,193 Total capital assets 322,327,954 [274,700) 322,053,254 15,859,140 5,898,189 332,014,205 Less accumulated deprec1abon for Infrastructure 84,357,444 10,031 84,367,475 3,897,782 88,265,257 Buildings and improvements 19,930,451 3,588 19,934,039 1,321,956 21,255,995 Vehicles 6,866,276 58,203 6,924,479 746,753 437,665 7,233,567 Equipment, furniture and fixtures 4,573,829 36,461 4,610,290 224,435 90,793 4,743,932 Total accumulated depreciation 115,728,000 108,283 115,836,283 6,190,926 528,458 121,498,751 Governmental acti111ties capital assets, net $ 206,599,954 $ [382,983) $ 206,216,971 $ 9,668,214 $ 5,369,731 $ 210,515,454 Business-type acti111ties Capital assets, not being depreciated Construction m progress $ 2,149,789 $ $ 2,149,789 $ 2,093,612 $ 72,223 $ 4,171,178 Land 1,541,806 8,858 1,550,664 509,170 2,059,834 Capital assets, being depreciated Infrastructure 119 ,457 ,650 [359,560) 119,098,090 72,223 119,170,313 Buildings and improvements 22,579,933 3 22,579,936 22,579,936 Vehicles 3,690,852 [11,130) 3,679,722 394,676 254,752 3,819,646 Equipmen~ furniture and fixtures 5,337,060 82,139 5,419,199 151,078 5,570,277 Total capital assets 154,757,090 [279,690) 154,477,400 3,220,759 326,975 157,371,184 Less accumulated deprec1abon for Infrastructure 43,729,964 [358,386) 43,371,578 3,486,539 46,858,117 Buildings and improvements 13,217,925 29"4 13,218,219 421,287 13,639,506 Vehicles 2,650,242 1,140 2,651,382 215,184 254,752 2,611,814 Equipment, furniture and fixtures 3,853,399 [17,755) 3,835,644 245,395 4,081,039 Total accumulated depreciabon 63,451,530 [374,707) 63,076,823 4,368,405 254,752 67,190,476 Business-type activibes capital assets, net $ 91,305,560 $ 95,017 $ 91,400,577 $ [1, 147,646) $ 72,223 $ 90,180,708 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 $ 74,669 Public safety 728,118 Public works 4,240,242 Public health 26,959 Culture and recreation 813,760 Planning and development 307,178 Total depreciation $ 6,190,926 Business-type Activities: Solid Waste Disposal $ 846,019 Water and Sewer 3,324,368 Sanitation 162,283 Golf Course Division 35,735 Total depreciation $ 4,368,405 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2018: Restated Balance Balance January 1, December 31, 2018 Additions Deletions 2018 Governmental activities: General obligation bonds $ 56,096,95'1 $ 2,159,836 $ 6,288,480 $ 51,968,310 Financing lease 157,868 157,868 Loans payable 12,171,090 13,963 12,185,053 Net OPEB hab1hty 2,932,46-4 395,831 235,055 3,093,240 Net KPERS OPEB hability 307,478 101,230 25,860 382,848 Net pension hab1hty 28,966,518 1,047,535 27,918,983 Accrued compensation 2,797,958 1,628,901 1,611,374 2,815,485 Temporary notes 6,811,742 19,508,505 8,196,742 18,123,505 Total $ 110,242,072 $ 23,808,266 $ 17,562,914 $ 116,487,424 Business-type acbvibes General obligation bonds $ 6,417,784 $ $ 1,135,206 $ 5,282,578 Revenue bonds 12,606,747 708,696 11,898,051 Loans payable 8,862,810 2,35'1,809 585,268 10,632,351 Net OPEB l1ab1hty 373,580 50,427 29,945 394,062 Net KPERS OPEB liability 131,776 43,384 11,082 16-4,078 Net pension hab1hty 3,333,610 218,792 3,114,818 Accrued compensation 6-42,347 410,353 383,183 669,517 Total $ 32,368,65'1 $ 2,858,973 $ 3,072,172 $ 32,155,455 Component Units General obl1gabon bonds $ 24,087,000 $ $ 2,660,000 $ 21,427,000 Less unamortized discount (79,485] [15,277] [6-4,208] Special assessment debt 9,207 2,153 7,05'1 Net KPERS OPEB obligation 12,05'1 928 11,126 Net pension liabihty 603,456 2,174 605,630 Total component units $ 24,632,232 $ 2,174 $ 2,6-47,804 $ 21,986,602 44 Amounts Due Within One Year $ 5,877,280 1,611,375 18,123,505 $ 25,612,160 $ 1,166,063 728,696 527,499 383,182 $ 2,805,440 $ 1,967,000 2,153 $ 1,969,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal lmpro-.ements 2008B, due 7/1/2028 Internal lmpro-.ements 2009A, due 10/1/2029 Internal lmpro-.ements 2010A, due 10/1/2025 Internal lmpro-.ements 20108, due 10/1/2023 Internal lmpro-.ernents 2011A, due 10/1/2031 Internal lmpro-.ements 2012A, due 10/1/2027 Refunding 20128, due 10/1/2020 Internal lmpro-.ements 2013A, due 10/1/28 Internal lmpro-.ements 20138, due 10/1/33 Internal lmpro-.ements 2014A, due 10/1/34 lmpro-.ement and Refunding 2015A, due 10/1/35 Internal lmpro-.ements 2016A, due 10/1/36 Refunding 20168, due 10/1/2031 Internal lmpro-.ements 2017A, due 10/1/37 Internal lmpro-.ernents 2018A, due 10/1/33 Total general obligation bonds Re-.enue Bonds Re-.enue 2011, due 10/1/31 Total re-.enue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2018-2, due 11/15/2019 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable 45 Original Interest Bonds Issue Rates Outstanding $ 3,525,000 3.65% to 5.00% $ 1,035,000 23,695,000 2.00% to 5.00% 2,981,936 6,916,592 2.00% to 3.875% 655,545 7,973,044 0.50% to 3.00% 1,763,477 6,587,985 2.00% to 5.00% 1,098,449 2,383,903 1.00% to 2.45% 1,506,342 3,817,108 1.00% to 1.40% 423,027 1,369,380 3.00% to 4.00% 1,001,255 4,485,073 0.60% to 3.65% 3,286,304 7,839,050 2. 50% to 3. 75% 5,455,241 7, 157,688 2. 00% to 4. 00% 6, 142,786 6,681,766 2. 00% to 3. 00% 6, 160,590 15, 141,004 2. 00% to 5. 00% 14,371,647 9,388,370 3.00% to 3.375% 9,209,452 2,090,000 3.15% to 4.00% 2, 159,837 $ 57,250,888 $ 16, 193,925 2.00% to 4.60% $ 11,898,051 $11,898,051 $ 4,615,000 13,500,000 $ 9,330,000 4,250,000 12,640,000 1.00% 2.50% 2.12% 2.78% 1.58% $ 4,615,000 13,508,505 $ 18, 123,505 $ 6,771,038 3,861,313 12, 185,053 $ 22,817,404 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 2009B, due 2021 General Obligation 2011A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1, due 2019 General Obligation 2017A, due 2030 General Obligation 2017B, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $6,080,000 11,820,000 3,075,000 657,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 3.04% 3.02% 4.47% Bonds Outstanding $ 1,185,000 2,885,000 1,740,000 657,000 10, 150,000 4,810,000 33,023 [97,231] 21,362,792 7,054 7,054 $21,369,846 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Go1.emment Bonds Interest Year Outstanding Due Total 2019 $ 7,043,343 $ 1,665,570 $ 8,708,913 2020 4,893,342 1,476,903 6,370,245 2021 4,618,090 1,339,636 5,957,726 2022 4,701,939 1,186,542 5,888,481 2023 4,541,940 1,011,191 5,553, 131 2024-2028 17,204,968 3,276,338 20,481,306 2029-2033 9,998,082 1,462,000 11,460,082 2034-2037 4,249, 184 276,500 4,525,684 Total $ 57,250,888 $ 11,694,680 $ 68,945,568 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) General Obligation -Component Units Bonds Interest Year Outstanding Due Total 2019 $ 1,310,000 $ 648,278 $ 1,958,278 2020 1,350,000 612, 110 1,962, 110 2021 1,400,000 565,880 1,965,880 2022 1,455,000 511, 135 1,966,135 2023 1,500,000 464,310 1,964,310 2024 -2028 8,205,000 1,616, 160 9,821, 160 2029 -2031 5,550,000 348,263 5,898,263 Total $ 20,770,000 $ 4,766, 136 $ 25,536,136 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Primary Government Bonds Interest Year Outstanding Due Total 2019 $ 728,696 $ 487,991 $ 1,216,687 2020 748,696 466,242 1,214,938 2021 773,696 798,696 1,572,392 2022 798,696 414, 148 1,212,844 2023 828,696 382,348 1,211,044 2024-2028 4,688,480 1,376,895 6,065,375 2029-2031 3,331,091 308,750 3,639,841 Total $ 11,898,051 $ 4,235,070 $ 16, 133, 121 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Government Notes Interest Year Outstanding Due Total 2019 $ 18, 123,505 $ 372,400 $ 18,495,905 Total $ 18, 123,505 $ 372,400 $ 18,495,905 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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: Kansas Water Supply Loans -Primary Go-.emment Loans Interest Year Outstanding Due Total 2019 $ 2020 2021 2022 2023 2024-2028 2029-2033 2034-2035 Total $ 527,499 539,863 552,523 565,483 578,754 3, 104, 194 3,486,921 1,277, 114 10,632,351 ====== $ $ 247,835 $ 775,334 235,471 775,334 222,811 775,334 209,851 775,334 196,580 775,334 772,476 3,876,670 389,749 3,876,670 46,434 1,323,548 2,321,207 $ 12,953,558 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2018, 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 XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2018, the note balance was $2,623,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018, 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, 2018, the note balance was $1,326,000. As of December 31, 2018, the principal balance of these four loans net of $454,947 of unamortized debt issuance costs was $12,185,053. Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2019 $ 2,249 $ 315 $ 2,564 2020 2,350 215 2,565 2021 2,455 110 2,565 Total $ 7,054 $ 640 $ 7,694 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2018, rental income of $79,912 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, 2018: 2019 $ 130,000 2020 130,000 2021 130,000 2022 130,000 2023 162,500 2024-2028 2,405,000 2029-2033 3,250,000 2034-2038 3,250,000 2039-2043 3,250,000 2044-2046 1,625,000 $ 14,462,500 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. Sa/es 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. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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). The City's portion of the proceeds from these bond issuances is recorded as a capital contribution in the financial statements. 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, 2018. The future minimum lease payments for the lease are as follows: Year Amount 2019 $ 93,926 2020 93,926 2021 93,926 2022 93,926 2023 93,926 2024-2027 375,708 Total $ 845,338 G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $5,041,500 $ Tourism and com.ention fund Special gas fund 160,000 Sales tax capital fund Debt ser\1ce 2,270,782 Other go-.emmental funds 1,354,914 Solid waste disposal fund Water and sewer fund Sanitation fund Central garage fund 190,000 Total Transfers $9,017, 196 $ The City uses interfund transfers to share administrative costs between funds. 51 805,000 812,346 2,568,350 690,000 3,650,000 491,500 9,017, 196 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2018 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.39% 20.09% Statutory Employer Capped Rate 8.39% 20.09% Member contribution rates as a percentage of eligible compensation for the fiscal year 2018 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer A/locations. 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, 2018, 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, 2018. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2018, the City's proportion for the Local employees group was 0.790%, which was a decrease of .021% from its proportion measured at June 30, 2017. At June 30, 2018, the City's proportion for the Police and Firemen group was 2.081 %, which was a decrease of .110% from its proportion measured at June 30, 2017. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2018 and 2017, the City and its component units reported a liability of $31,984,657 and $33,276,991, 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, 2017, which was rolled forward to June 30, 2018, using the following actuarial assumptions: Assumptions Rate Price inftation 2.75% Wage inftation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inftation 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, 2017 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, 2018 are summarized in the following table: Long-Tenn Expected Asset Long-Tenn 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-tenn 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. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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: Local Police & Firemen Total 1 % Decrease (6. 75%) $ 16, 154, 118 28,531,728 Discount Rate (7.75%) $ 11,014,328 20,019,473 1% Increase (8.75%) $ 6,670,741 12,892,837 $ 44,685,846 $ 31,033,801 $ 19,563,578 ======= Pension Expense. For the year ended December 31, 2018, the City recognized Local pension expense of $870,226 and Police and Firemen pension expense of $2,385,738, 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 $31, 100 and $39,859, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Local Differences between actual and expected experience Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected experience Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total 55 Deferred outftows Deferred inflows of resources of resources $ 39,766 $ 312,097 257,660 476,967 53,041 446,147 435,326 $ 1,220,540 $ 800,464 Deferred outflows Deferred inftows of resources $ 1,223,246 521,008 1,054,212 51,284 of resources $ 92,492 55,255 1, 107,361 $ 2,849, 750 $ 1,255, 108 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2018, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Housing Authonty Airport Authority Deferred outflows Deferred inftows Deferred outftows Deferred mftows Local of resources ct resources of resources of resources Ditrerences between actual and expected expenence $ 1,670 $ 11,937 $ 2,187 $ 17,161 Net ditrerences between projected and actual earnings on 1miestments 10,829 14, 168 Changes 1n assumpuons 18,592 2,525 26,226 2,916 Changes in proportion 1,806 6,884 55,201 44,325 Total $ 32,897 $ 21,346 $ 97,782 $ 64,402 $1,723,207 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, 2019. 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] Outftows December 31, Amount Amount Total 2019 $ 341,010 $ 985,459 $ 1,326,469 2020 202,538 586, 107 788,645 2021 [100,494] (33,058] [133,552] 2022 [7,653] 64,997 57,344 2023 [15,325] (8,863] (24, 188] Total $ 420,076 $ 1,594,642 $ 2,014,718 $36,221 and $13,417 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, 2019. 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] Outftows [lnftows] Outflows December 31, Amount Amount Total 2019 $ [2,591] $ 10,978 $ 8,387 2020 11, 125 12,657 23,782 2021 7, 101 112 7,213 2022 (4,816] 8,685 3,869 2023 732 948 1,680 Total $ 11,551 $ 33,380 $ 44,931 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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.RC. 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, $183,514 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2018 2017 Unpaid claims, January 1 $ 221,913 $ 255, 154 Incurred claims (including IBNRs) 886,086 622,556 Claim payments [869,221) [655,797] Unpaid claims, December 31 $ 238,778 $ 221,913 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: 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2018 2017 $ 395,691 $ 294,333 3,670,930 4,244,648 [3,685,641) [4, 143,290) $ 380,980 $ 395,691 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, 2018. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2018. 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. 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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, 2018. Markley-Magnolia W Sewer $ 5,150,000 $ 200,790 Cloud from Ohio to Lewe 155,014 69,242 Ninth and Cloud Intersection Realignment 1,100,000 1,048,542 Bicentennial Center lmprowments 10,200,000 12,344,709 Lakewood Middle School Safe Route 81,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 Water Well 13 & 14 Maintenance 52, 184 50,830 Pawment Condition Surwy 36,222 33,909 Community Fieldhouse 6,937,827 8,727,749 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58,858 Rebuild High Ser.Ace Pump P-203 24, 187 13,688 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18, 128 2017 Country Club Road lmprowments 1,200,000 1,088,188 Dowtown STAR District 58,000 136, 120 Downtown CID -Alley 2,317 Downtown TlF 2,009 2017 Mill & Inlay 1,577,502 1,574,583 2017 Major Concrete Rehab 469,472 465,748 Downtown Streetscape 12, 165,000 3,514,351 Smoky Hill Riwr Renewal 3,200,000 2,632,848 Downtown Santa Fe Water Main Replacement 1,351,100 762,367 S Well Field & WTP Phase 1 1,964,525 1,583,269 2017 Sidewalks 69,092 73,665 Police Training Facility 4,900,000 297,358 Beechcraft Road lmprowments-Airport Authority 1,500,000 12,884 2017 Sanitary Sewer Line Cleaning 519,358 297 Indiana Aw Trail 79,262 74,992 Preliminary Design Broadway lmpr 50,000 50,248 2018 Pawment Sealing 325,000 252,778 Northbound 9th Street Bridge 103,768 92,060 2018 Microsurfacing 750,000 731,987 2018 UBAS 800,000 673,029 2018 Brick Streets 99,243 99,486 2018 Bridge Maintenance 86,520 82,684 2018 Chip Seal/Bituminous 175,000 169,866 2018 Mastic Surface Treatment 30,000 30,305 2018 Mill & Inlay 1,550,000 1,353,589 2018 Minor Concrete Rehab 40,510 40,773 2018 Sidewalks 80,493 83, 114 2018 Traffic Control Main/Street Markings 75,000 56,371 9th Street Kirwin to Crawford 665,752 630,458 2018 Sanitary Sewer Point Repair 50,000 18,859 Landfill Cell #20 Design 60,000 50,714 2018 Park lmprowments 194,000 198 Manhole & Value Adj 10,000 306 Community Theater HVAC Replacement 46,000 207 North Lime Drying Lagoon Yearty Maintenance 120,000 37,260 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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. 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the 'Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during 01 2018. The Feasibility Study portion of the CAFO scope of work was also completed during 01 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work were completed during 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 2019. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. 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 2018, the City did not contribute to the plan. At December 31, 2018, the following employees were covered by the benefit terms: Active employees 441 32 473 Retirees and co-.ered spouses Total The total OPEB liability of $3,487,302 was measured as of December 31, 2017 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 Actuarial cost method lnftation Salary increases Discount rate Healthcare cost trend rates Retiree's share of benefit related costs December 31, 2017 Entry age normal as a level percentage of payroll 2.75% 3.50% 3.44% Medical & Pharmacy: 6.8% for 2017, decreasing 0.60% per year to an ultimate rate of 5.1 % for 2020 and through 2030 Dental: 5.00% to 2020 100% of the premium 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. 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) Changes in the total OPEB liability are as follows: Balance 1/1/2018 SeNice cost Interest Benefit paid Changes in assumptions Balance 12/31/2018 $ 3,306,044 226,762 128,578 [265,000] 90,918 $ 3,487,302 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: Total OPEB Liability $ 1% Decrease (2.44%) 3,767,121 $ Discount Rate (3.44%) 3,487,302 $ 1% increase (4.44%) 3,226,016 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: Total OPEB Liability $ 1% Decrease 3,084,533 $ Healthcare Cost Trend Rates 3,487,302 $ 1% increase 3,966,000 For the year ended December 31, 2018, the City recognized OPEB expense of $446,258. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2018, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outftows of resources Changes of assumptions $ 80,503 ------ Total $ 80,503 ====== Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Deferred Year ended [Inflows] Outflows June 30, Amount 2019 $ 10,414 2020 10,414 2021 10,414 2022 10,414 2023 10,414 2024+ 28,433 Total $ 80,503 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) 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 65111 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, 2018, the valuation date, the following employees were covered by the benefit terms: Active employees Disabled members Total 282 4 286 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $566,938 reported as of December 31, 2018, was measured as of June 30, 2018, and was determined by an actuarial valuation as of December 31, 2017, which was rolled forward to June 30, 2018, using the following actuarial assumptions: 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Valuation date Actuarial cost method Inflation Salary increases 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) December 31, 2017 Entry age normal 2.75% 3.00% 3.87% 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-2016. The actuarial assumptions used in the December 31, 2017 valuation were based on the results of an actuarial experience study for the period of July 1, 2014 through June 30, 2016. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2017 KPERS pension valuation. The changes in the total OPEB liability are as follows: Balance 1/1/2018 Service cost Interest Effect of economic/demographic gains or losses Changes in assumptions Benefit payments Balance 12/31/2018 Total KPERS OPEB Liability 9!Y Housing Authority Airport Authority Total $ 439,254 $ 7,096 $ 12,054 $ 458,404 52,380 17,061 75,173 [6,574] [30,368] $ 546,926 $ 1,743 252 [205] 8,886 $ 2,825 533 [4,199] [87] 11, 126 56,948 17,846 70,974 [6,866] [30,368] $ 566,938 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 (2.87%} (3.87%} (4.87%} Total OPEB Liability -City $ 569,284 $ 546,926 $ 524,594 Total OPEB Liability -Housing Authority $ 9,144 $ 8,886 $ 8,588 Total OPEB Liability -Airport Authority $ 11,395 $ 11, 126 $ 10,800 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 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 $ 546,926 $ 546,926 $ 546,926 Total OPEB Liability -Housing Authority $ 8,886 $ 8,886 $ 8,886 Total OPEB Liability -Airport Authority $ 11, 126 $ 11, 126 $ 11, 126 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, 2018, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: City Housing Authority Airport Authority Deferred Deferred Deferred Deferred Outftows of lnftows of lnftows of lnftows of Resources Resources Resources Resources Differences between expected and actual experience $ 67,415 $ - $ - $ 3,766 Changes of assumptions 13,271 184 198 Total $ 67,415 $ 13,271 $ 184 $ 3,964 $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 2019 $ [6, 120] $ [21] $ [458] 2020 [6, 120] [21] [458] 2021 [6, 120] [21] [458] 2022 [6, 120] [21] [458] 2023 [6, 120] [21] [458] Thereafter [23,544] [79] [1,674] Total $[54, 144] $ [184] $ [3,964] K. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $[24,544] at December 31, 2018. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements In 2018, 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. Ad Valorem Property Tax Abatements Company Salina Vortex Corp (facility improvements) Great Plains Mfg (facility improvements) Veris Technologies (facility addition/improvements) Twin Oaks (facility addition/improvements) Salina Field House (facility) Total Abatement Start End 2015 2024 2014 2023 2015 2024 2015 2024 2017 2026 % 75% 100% 40.5% 55% 100% 2018 Tax Abated $ 15,432 4,808 1,525 1,838 58,518 $ 82,120 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements (Continued) TIF Project Plans District Lambertz Total Purpose Construction of 10. 79 acres of shopping center, including single and multi-tenant retail space, and related public and private infrastructure Base Year Expires 2007 2027 2018 Reimbursements Sales Tax Property Tax $ 212,624 $ 217,595 $ 212,624 $ 217,595 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 South 9th Street Total Community Improvement District (CID) Rate Start Expires Purpose ASs1st with improvements to hotel 2.00% 3/1/2016 12/31/2037 and conference center 2018 Eligible Reimbursement Amount* $ 260,274 $ 260,274 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) L. Tax Abatements (Continued) Property/Business Name Sena Guzman James M. Monroe Christina L1twiller Jeremy Cessna Wilham & Mary Warhurst Holly Fain Arlene Cox Gloria Williams Michelle Rogan Samuel A. Rock Jessica A. Ziegler Devin or Jessica Know Ravey Investments LLC Lamont Outland Michelle Bunch Jermaine and Tykea Polk Mary Marshall Angela Fishburn Kress Building LLC Heritage at Hawthorne Partners, LLC Will & Mary Warhurst Donnie & Ramona Marrs TJTM, Inc. TroyValcil Michelle Malone Timothy & Linda Rickman Yvette Gelinas Charles H Carroll Jr Trust Latisha Pierce Tanya Shiehzadeh Robert & Brenda Bums Property Partners LLC Ph1ll Hemmer AP Property Holdings, LLC Gregory Davis Micheal Money Traniesh Byrd Mark Martin Living Trust Philip C Krug Living Trust Jana Endsley Kanesha Sam11ton Maria E Padilla Kansas Property Investors. LLC, JK Webb Properties LLC Alan and Nancy Franzen Brandon Sears Santa Fe Properties, LLC Rusty A Leister Living Trust Heritage at Hawthorne Partners II, LLC. Greg Huston & I erry A Sweanngen Total Neighborhood Revitalization Act (NRA) Address 241 N. Front Street 620 W Hamilton Street 148 N. 12th Street 219 N. Front Street 714 Park Street 204 Forest Avenue 200 Forest Avenue 903 N. 10th Street 240 S. Clark Street 1329 N. 4th Street 221 N. 2nd Street 207 N. Penn 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash 1206 N. 7th Street 634 N. 8th Street 226 N 2nd Street 937 N. 3rd Street 1219 N. 8th Street 134 S. Santa Fe Ave 715 N. 9th Street 809 W. Ash 2035 E. Iron #300R 2035 E. Iron #213C/105R/302R/202R/205R/006R/301 RA/301 RB/001 R/002R/003R/004R/005R 853 Navaho 815 N. 2nd Street 719 E. Ash 1115 N. 8th Street 156-158 S. Santa Fe 705 N. 2nd Street 703 N. 2nd Street 1205 N. 4th Street 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) 2035 E. Iron Avenue, Unit #203R 201 E. Iron Avenue 156-158 N.11th Street 2035 E. Iron Avenue, Unit #206R 701 N. 2nd Street 2035 E. Iron #104R 2035 E Iron #304R 1321 N. 3rd Street 214 W. Grand Avenue 810 N. 5th Street 230 S. Broadway Blvd 120 S Santa Fe Avenue 1413 Arapahoe 900 N. 12th Street 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue 600 N. Santa Fe Avenue 715 N. 9th Street, Phase II 1025 w <.;rawtord Street 69 2018 ill£ Rebate Paid Res $ 257 Res 571 Res 348 Res 323 Res 258 Res 474 Res 476 Res 358 Res 478 Res 92 Res 478 Res 658 Com 2,492 Res 408 Res 419 Res 518 Res 399 Res 384 Com 2,592 Com 4,605 Res 822 Res 992 Res 18,739 Res 259 Res 46 Res 642 Res 621 Com 12,456 Res 1, 158 Res 924 Res 807 Com 6,055 Res 15,392 Com 46,159 Res 2,455 Res 4,217 Res 791 Com 1,730 Res 3,777 Res 815 Res 978 Res 1,332 Com 13,061 Com 6,074 Res 865 Res 182 Com 15,462 Com 11,334 Com 8,116 Res 3,867 $ 1961714 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2018 Note 5. OTHER INFORMATION (Continued) M. Subsequent Events On April 16, 2019, the City was issued two Kansas Public Water Supply Loans in the amounts of $4,250,000 and $32,000,000, respectively. For both loans, the City will make the first payment on August 1, 2020 and the last payment on February 1, 2040. Both loans have interest rates of 2.33%. On April 24, 2019, the City issued Series 2019-A general obligation internal improvement bonds in the amounts of $11,090,000. The bonds will be used to partially retire Temporary Note 2018-2 that matures November 1, 2019 and to finance various capital projects. The City will make the first payment on the bonds on April 1, 2020 and the last payment on October 1, 2039. The interest rate on the bonds ranges from 3.00% to4.00%. On April 24, 2019, the City issued Series 2019-1 temporary notes in the amounts of $6,085,000. The temporary notes will be used to finance various capital projects. The maturity date of the temporary notes is May 1, 2020 and the interest rate on the notes is 1.58%. 70 REQUIRED SUPPLEMENTARY INFORMATION 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 Service cost Interest Benefit paid Changes in assumptions Net change in total OPEB liability Total OPEB liability -beginning Total OPEB liability -ending Coi.ered payroll Total OPEB liability as a percentage of coi.ered-employee payroll Actuarially determined contribution Actual contribution Contributions as a percentage of coi.ered payroll * -Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 71 2018 $ 226,762 128,578 [265,000] 90,918 181,258 3,306,044 $ 3,487,302 $ 24,740,225 14.10% $ 265,000 $ 265,000 1.07% 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 Ser\1ce cost Interest Effect of economic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Net change in total OPEB liability Total OPEB liability -beginning Total OPEB liability -ending Coi.ered payroll Total OPEB liability as a percentage of coi.ered-employee payroll Actuarially determined contribution Actual contribution Contributions as a percentage of coi.ered payroll * -Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 2018 $ 52,380 17,061 75, 173 [6,574] [30,368] 107,672 439,254 $ 546,926 $ 13,652, 194 4.01% $ 109,466 $ 109,466 0.80% 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 aid Police and Police and Local Firemen Local Firemen Local Firemen 12131/15 12131/15 12131/16 12131/16 12131/17 12131/17 Local 12131/18 City's proportion of the net pension liability 0.764% 2.258% 0.761% 2.180% 0.811% 2.191% 0.790% 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 City's covered-employee payroll $12,931,197 $10,161,866 s 13,251,236 $10,730,033 s 13,548,056 $10,593,419 City's proportionate share of the net pension liability as a percentage of its cowre~mployee payroll 77.55% Plan fiduciary net position as a percentage of the total pension liability 71.98% • -The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASS 68 during fiscal year 2015, there!Ore 10 years of data is unawilable. 161.35% 74.60% 88.83% 188.74% 86.75% 193.96% 68.55% 69.30% 72.15% 70.99% Schedule of the City's Contributions Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency [excess] City's co1ered-employee payroll Contributions as a percentage of co1ered employee payroll Local 12131/15 $ 1,256,217 1,256,217 $ $13,251,236 9.48% • -Data became a10ilable with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is una10ilable. Last Ten Fiscal Years* Police and Police and Firemen Local Firemen 12131115 12131/16 12131/16 $ 2,527,995 $ 1,243,711 $ 2,361 ,273 2,527,995 1,243,711 2,361 ,273 $ $ $ $10,730,033 $13,548,056 $10,593,419 23.56% 9.18% 22.29% 73 Police and Local Firemen 12131/17 12131/17 $ 1, 179,745 $ 1,986,933 1, 179,745 1,986,933 $ $ $13,944,989 $10,441,055 8.46% 19.03% $11,014,328 $13,944.989 78.98% 74.22% Local 12131/18 $ 1,205,334 1,205,334 $ $14,366,294 8.39% Police and Firemen 12131/18 2.081% $20,019,473 $10,441,055 191.74% 71.53% Police and Firemen 12131/18 $ 2,181,617 2,181,617 $ $10,859,219 20.09% COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 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 91h 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. 74 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. 75 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2018 Total Total Non major Non major Non major Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 2,885,257 $ 514,201 $ 633,653 Receivables Accounts 1,797 Total assets $ 2,887,054 $ 514,201 $ 633,653 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 149,019 $ -$ Due to other funds 24,544 Total liabilities 173,563 Fund balances: Restricted 345,041 Committed 2,067,239 514,201 Assigned 325,755 Unassigned [24,544] Total fund balances 2,713,491 514,201 Total liabilities and fund balances $ 2,887,054 $ 514,201 $ See independent auditor's report on the financial statements. 76 - 633,653 633,653 633,653 Total Non major Governmental Funds $ 4,033, 111 1,797 $ 4,034,908 $ 149,019 24,544 173,563 978,694 2,581,440 325,755 [24,544] 3,861,345 $ 4,034,908 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2018 Total Total Non major Non major Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 713,282 $ -$ - Intergovernmental 807,067 475,503 Charges for services 469,969 9,260 Licenses and permits 2,500 Investment revenue 18,110 3,283 14,797 Donations 237,660 Miscellaneous 55,048 Total revenues 2,303,636 12,543 490,300 EXPENDITURES Current Culture and recreation 1,760,504 Public safety 343,811 Public health and sanitation 442,359 Planning and development 641,823 Miscellaneous 35 Debt service Principal retirement 810,000 Interest and other charges 84,535 Capital outlay 569,901 Total expenditures 3,758,398 35 894,535 Excess [deficiency] of revenues over [under] expenditures [1,454,762) 12,508 [404,235) Other financing sources [uses] Transfers in 1,354,914 Total other financing sources [uses) 1,354,914 Net change in fund balance [99,848) 12,508 [404,235) Fund balance -Beginning of year 2,813,339 501,693 1,037,888 Fund balance -End of year $ 2,713,491 $ 514,201 $ 633,653 See independent auditor's report on the financial statements. 77 Total Non major Governmental Funds $ 713,282 1,282,570 479,229 2,500 36,190 237,660 55,048 2,806,479 1,760,504 343,811 442,359 641,823 35 810,000 84,535 569,901 4,652,968 [1,846,489) 1,354,914 1,354,914 [491,575) 4,352,920 $ 3,861,345 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit] Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2018 Business Bicentennial Improvement Neighborhood Center District Park $ 154,748 $ 24,964 $ 24,251 1,797 $ 154,748 $ 26,761 $ 24,251 $ 57,067 $ 18,803 $ - 57 067 18,803 7,958 97,681 24,251 97,681 7,958 24,251 $ 154,748 $ 26,761 $ 24,251 Special Parks & Special Recreation Alcohol $ 272,521 $ 234 $ 272,521 $ 234 $ -$ 122,447 234 150,074 272,521 234 $ 272,521 $ 234 Community Sales Tax Downtown Development Economic TIF Revolving Development District #1 $ 186,307 $ 902,997 $ 237,956 $ $ 186,307 $ 902,997 $ 237,956 $ $ - $ 5,512 $ - $ 5,512 186,307 897,485 237,956 186,307 897,485 237,956 $ 186,307 $ 902,997 $ 237,956 $ South 9th CID 46,548 $ 46,548 $ 45,301 $ 45,301 1,247 1,247 46,548 $ State 911 Grants Communications 8,013 $ 8,013 $ - $ 8,013 8,013 372,254 372,254 15,693 15,693 180,880 175,681 356,561 8,013 _$ ___ 37_2...,,2_5_4 See independent auditor's report on the financial statements. 78 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2018 Kenwood Special Cove Law Police Capital Enforcement Grants $ 108,313 $ 82 $ $ 108,313 $ 82 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,564 $ -$ - Due to other funds 24,544 Total liabilities 1,564 24,544 Fund balance: Restricted Committed 106,749 82 Assigned Unassigned [24,544) Total fund balance [deficit] 106,749 82 [24,544) Total liabilities and fund balances $ 108,313 $ 82 $ - Federal DARE Grants Donations $ 3,325 $ 26,616 $ 3,325 $ 26,616 $ -$ 1,298 1,298 3,325 25,318 3,325 25,318 $ 3,325 $ 26,616 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 31,959 $ 3,108 $ 26,141 $ 99 $ 14,215 $ 1,954 $ 438,652 $ 2,885,257 1,797 $ 31,959 $ 3,108 $ 26,141 $ 99 $ 14,215 $ 1,954 $ 438,652 $ 2,887,054 $ 1,542 $ 1,402 $ - $ - $ - $ - $ 837 $ 149,019 24,544 ___ 1~,5_4_2 1,402 30,417 1,706 30,417 1,706 $ 31,959 $ 3,108 26, 141 1,954 99 14,215 26,141 99 14,215 1,954 $ 26, 141 $ 99 $ 14,215 $ 1,954 See independent auditor's report on the financial statements. 79 __ 8'--3_7 173,563 345,041 437,815 2,067,239 325,755 [24,544) 437,815 2,713,491 $ 438,652 $ 2,887,054 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2018 Business Bicentennial Improvement Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 84,870 Licenses and permits 2,500 Investment revenue 1,105 145 152 Donations Miscellaneous Total Revenues 1,105 85,015 2,652 Expenditures Current Culture and recreation 762,968 Public safety Public health and sanitation Planning and development 93,225 Capital outlay Total Expenditures 762,968 93,225 Excess [deficiency] of revenues over [under] expenditures [761,863] [8,21 O] 2,652 Other financing sources [uses] Transfers in 801,564 Total other financing sources [uses] 801.564 Net change in fund balance 39,701 (8,21 O] 2,652 Fund balance, beginning of year 57,980 16, 168 21,599 Fund balance, end of year $ 97,681 $ 7,958 $ 24,251 Special Parks & Special Recreation Alcohol $ -$ 191,676 191,676 1,533 70 193,209 191,746 191,676 44,909 44,909 191,676 148,300 70 148,300 70 124,221 164 $ 272,521 $ 234 Community Development $ Revolving - 1,195 1,195 1,195 1,195 185,112 Sales Tax Economic Development $ 347, 167 5,800 352,967 457,585 457,585 [104,618) [104,618) 1,002,103 $ Downtown TIF District #1 134,867 1,458 136,325 136,325 136,325 101,631 $ South State 9th CID Grants 231,248 $ - 9,000 248 57 14,953 246,449 9,057 536,053 7,480 536,053 7,480 [289,604) ___ 1_,_,5;_7_7 [289,604) 290,851 1,577 6,436 911 Communications $ 332,898 2,246 335,144 343,811 343,811 [8,667) [8,667) 365,228 $ 186,307 $ 897,485 $ 237,956 $ 1,247 $ 8,013 $ 356,561 --~---~ See independent auditor's report on the financial statements. 80 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, 2018 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 6,817 Charges for services Licenses and permits Investment revenue 656 Donations Miscellaneous Total Revenues 656 1 6,817 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 56,420 3,507 Total Expenditures 56,420 3,507 Excess [deficiency) of revenues over [under] expenditures (55,764] 1 3,310 Other financing sources [uses) Transfers in 68,350 Total other financing sources [uses) 68.350 Net change in fund balance 12,586 1 3,310 Fund balance, beginning of year 94,163 81 (27,854) $ Fund balance, end of year $106,749 $ 82 $ ~24,544) $ Federal DARE Grants Donations -$ 21 132 19,142 21 19,274 12,545 12,545 21 6,729 21 6,729 3,304 18,589 3,325 $ 25,318 War Memorial Maintenance $ - 206 206 1,855 1,855 [1,649) [1,649] 32,066 $ 30,417 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ $ -$ -$ -$ -$ - 385,099 127 168 1 86 13 21,848 2,689 [3,584) 407,074 168 1 2,775 [3,571) 995,681 995,681 [588,607) 168 1 2,775 [3,571) 485,000 485.000 [103,607] 168 1 2,775 [3,571] 105,313 25,973 98 11,440 5,525 1,706 $ 26,141 $ 99 $ 14,215 $ 1,954 See independent auditor's report on the financial statements. 81 Animal Shelter Donations Totals $ -$ 713,282 75,000 807,067 469,969 2,500 2,690 18, 110 237,660 237,660 55,048 315,350 2,303,636 1,760,504 343,811 250,683 442,359 641,823 569,901 250,683 3,758,398 64,667 [1,454,762) 1,354,914 1.354.914 64,667 [99,848] 373,148 2,813,339 $437,815 $2,713,491 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December 31, 2018 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total $ 506,324 $ 2,042 .;:;..$ _ ____;5:.i.,8:....:3~5 $ 514,201 $ 506,324 $ 2,042 .... $ __ 5 ..... 8_3_5 $ 514,201 506,324 2,042 5,835 514,201 $ 506,324 $ 2.042 .... $ __ 5 ..... 8_3_5 $ 514,201 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2018 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 9,260 $ -$ Investment revenue 3,233 13 Total revenues 12,493 13 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,458 13 Fund balances -beginning of year 493,866 2,029 Fund balances -end of year $ 506,324 $ 2,042 $ See independent auditor's report on the financial statements. 83 - 37 37 37 5,798 5,835 Total $ 9,260 3,283 12,543 35 35 12,508 501,693 $ 514,201 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, 2018 Budgeted Amounts Actual Original Revenues Investment revenue $ 1,105 $ -$ Total revenues 1,105 Expenditures Culture and recreation 762,968 762,332 Total expenditures 762,968 762,332 Excess [deficiency) of revenues over [under] expenditures [761,863) [762,332) Other financing sources [uses] Transfers in 801,564 700,000 Total other financing sources [uses] 801,564 700,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other (uses] 39,701 [62,332] Unreserved fund balance, January 1 57,980 74,481 Unreserved fund balance/GAAP fund balance December 31 $ 97,681 $ 12, 149 $ See independent auditor's report on the financial statements. 84 Final - 762,332 762,332 [762,332) 700,000 700,000 [62,332] 74,481 12,149 Variance with Final Budget Positive [Negative] $ 1,105 1,105 [636) [636) 469 101,564 101,564 102,033 [16,501) $ 85,532 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 85,937 $ 89,175 $ Investment revenue 145 15 Total revenues 86,082 89,190 Expenditures Planning and development 93,225 89,190 Total expenditures 93,225 89,190 Excess [deficiency] of revenues over [under] expenditures [7,143) Unreserved fund balance, January 1 13,304 18,182 Unreserved fund balance, December 31 6,161 $ 18, 182 $ Reconciliation to GAAP Accounts receivable 1,797 GAAP Fund Balance, December 31 $ 7,958 See independent auditor's report on the financial statements. 85 Final 89,175 15 89,190 89,190 89,190 18, 182 18,182 Variance with Final Budget Positive [Negative] $ [3,238) 130 [3,108) [4,035) [4,035) [7, 143) [4,878) $ [12,021) 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, 2018 Budgeted Amounts Actual Original Revenues Licenses and permits $ 2,500 $ 10,000 $ Investment revenue 152 500 Total revenues 2,652 10,500 Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures 2,652 10,500 Unreserved fund balance, January 1 21,599 4,873 Unreserved fund balance/GAAP fund balance December 31 $ 24,251 $ 15,373 $ See independent auditor's report on the financial statements. 86 Final 10,000 500 10,500 10,500 4,873 15,373 Variance with Final Budget Positive [Negative] $ [7,500) [348] [7,848] [7,848) 16,726 $ 8,878 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, 2018 Budgeted Amounts Actual Original Revenues Intergovernmental $ 191,676 $ 189,192 $ Investment revenue 1,533 1,000 Total revenues 193,209 190,192 Expenditures Capital outlay 194,983 194,000 Total expenditures 194,983 194,000 Excess [deficiency] of revenues over [under] expenditures [1,774] [3,808] Unreserved fund balance, January 1 124,221 115,137 Unreserved fund balance, December 31 122,447 $ 111,329 $ Reconciliation to GAAP Current year encumbrances 150,074 GAAP Fund Balance, December 31 $ 272,521 See independent auditor's report on the financial statements. 87 Final 189,192 1,000 190,192 194,000 194,000 [3,808] 115,137 111,329 Variance with Final Budget Positive [Negative] $ 2,484 533 3,017 [983] [983] 2,034 9,084 $ 11,118 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, 2018 Budgeted Amounts Actual Original Revenues Intergovernmental $ 191,676 $ 216,086 $ Investment revenue 70 Total revenues 191,746 216,086 Expenditures Public health and sanitation 191,676 216,086 Total expenditures 191,676 216,086 Excess [deficiency] of revenues over [under] expenditures 70 Unreserved fund balance, January 1 164 34,899 Unreserved fund balance/GAAP fund balance December 31 $ 234 $ 34,899 $ See independent auditor's report on the financial statements. 88 Final 216,086 216,086 216,086 216,086 34,899 34,899 Variance with Final Budget Positive [Negative] $ [24,410] 70 [24,340] 24,410 24,410 70 [34,735] $ ~34,665] Revenues Taxes Investment revenue Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2018 Budgeted Amounts Actual Original Final $ 347,167 $ 332,818 $ 332,818 5,800 2,000 2,000 352,967 334,818 334,818 457,585 458,840 458,840 457,585 458,840 458,840 Excess [deficiency] of revenues over [under] expenditures [104,618] [124,022] Unreserved fund balance, January 1 1,002,103 667,262 Unreserved fund balance/GAAP fund balance December 31 $ 897,485 $ 543,240 $ See independent auditor's report on the financial statements. 89 [124,022] 667,262 543,240 Variance with Final Budget Positive [Negative] $ 14,349 3,800 18,149 1,255 1,255 19,404 334,841 $ 354,245 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 385,099 $ 347,200 $ Investment revenue 127 2,000 Miscellaneous 21,848 133,650 Total revenues 407,074 482,850 Expenditures Culture and recreation 995,681 1,048,635 Total expenditures 995,681 1,048,635 Excess [deficiency) of revenues over [under] expenditures [588,607] [565,785] Other financing sources [uses] Transfers in 485,000 525,000 Total other financing sources [uses] 485,000 525,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other (uses] (103,607] (40,785] Unreserved fund balance, January 1 105,313 190,338 Unreserved fund balance/GAAP fund balance December 31 $ 1,706 $ 149,553 $ See independent auditor's report on the financial statements. 90 Final 347,200 2,000 133,650 482,850 1,048,635 1,048,635 [565,785] 525,000 525,000 [40,785] 190,338 149,553 Variance with Final Budget Positive [Negative] $ 37,899 [1,873) [111,802] [75,776) 52,954 52,954 [22,822) [40,000) [40,000] (62,822) [85,025) $ [147,84ZJ 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, 2018 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,394,142 $ 2,674,498 Delinquent taxes 62,732 55,000 Motor vehicle taxes 305,481 296,922 Special assessments 1,545,758 1,620,000 Investment revenue 21,230 Miscellaneous 58,932 Total revenues 4,329,343 4,705,352 Expenditures Debt Service Principal retirement 5,252,865 5,057,920 Interest and other charges 1,702,255 2,086,687 Total expenditures 6,955,120 7,144,607 Excess [deficiency] of revenues over [under] expenditures [2,625,777] [2,439,255] Other financing sources [uses] Transfers in 2,270,782 2,000,000 Total other financing sources (uses] 2,270,782 2,000,000 Excess [deficiency] of revenues and other sources over (under] expenditures and other [uses] [354,995] [439,255] Unreserved fund balance, January 1 1,462,554 814,255 Prior period adjustment 694,409 Unreserved fund balance, January 1, restated 2,156,963 814,255 Unreserved fund balance, December 31 1,801,968 $ 375,000 Reconciliation to GAAP Taxes receivable 2,674,390 Deferred revenue [2,625,000) GAAP Fund Balance, December 31 $ 1,851,358 See independent auditor's report on the financial statements. 91 Final $ 2,744,775 62,732 305,480 1,546,859 4,659,846 5,494,365 1,688,616 7,182,981 [2,523, 135] 2,000,000 2,000,000 [523,135) 1,195,141 1,195,141 $ 672,006 Variance with Final Budget Positive [Negative] $ (350,633] 1 (1, 101] 21,230 [330,503] 241,500 [13,639] 227,861 [102,642) 270,782 270,782 168,140 267,413 694,409 961,822 $ 1,129,962 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 3,101,872 $ 2,844,000 Investment revenue 31,711 4,000 Miscellaneous 18,894 49,310 Total revenues 3,152,477 2,897,310 Expenditures Public works 1,893,824 1,698,164 Total expenditures 1,893,824 1,698,164 Excess [deficiency] of revenues over [under] expenditures 1,258,653 1, 199, 146 Other financing sources [uses] Transfers [out] [690,000] [1,175,000) Total other financing sources [uses] [690,000] [1,175,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 568,653 24, 146 Unreserved fund balances, January 1 3,880,930 3,107,520 Prior period adjustment [694,409] Prior year cancelled encumbrances 249,242 Unreserved fund balances, December 31 $ 4,004,416 $ 3,131,666 See independent auditor's report on the financial statements. 92 Final $ 2,844,000 4,000 49,310 2,897,310 1,698,164 1,698,164 1,199,146 [1,175,000] [1,175,000) 24, 146 3,107,520 $ 3,131,666 Variance with Final Budget Positive [Negative] $ 257,872 27,711 [30,416] 255,167 [195,660] [195,660] 59,507 485,000 485,000 544,507 773,410 [694,409) 249,242 $ 872,750 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 20,205,846 $ 20,469,600 Investment revenue 97,347 25,000 Miscellaneous 5,101 10,000 Total revenues 20,308,294 20,504,600 Expenditures Public works 10,965,681 14,491,199 Total expenditures 10,965,681 14,491, 199 Excess (deficiency] of revenues over [under] expenditures 9,342,613 6,013,401 Other financing sources [uses] Transfers in 122,200 Transfers [out] [6,266,000] [6,850,000] Total other financing sources (uses] (6,266,000] [6,727,800] Excess [deficiency] of revenues and other sources over (under] expenditures and other (uses] 3,076,613 (714,399] Unreserved fund balances, January 1 11,301,601 12,691,809 Prior period adjustment (2, 116,375] Prior year cancelled encumbrances 21,352 Unreserved fund balances, December 31 $ 12,283, 191 $ 11,977,410 See independent auditor's report on the financial statements. 93 Final $ 20,469,600 25,000 10,000 20,504,600 14,491,199 14,491, 199 6,013,401 122,200 [6,850,000] [6,727,800] (714,399] 12,691,809 $ 11,977,410 Variance with Final Budget Positive [Negative] $ (263,754] 72,347 (4,899] [196,306] 3,525,518 3,525,518 3,329,212 (122,200] 584,000 461,800 3,791,012 (1,390,208] (2, 116,375] 21,352 $ 305,781 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, 2018 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,941,279 $ 3,048,426 $ 3,048,426 Investment revenue 10,882 2,500 2,500 Total revenues 2,952,161 3,050,926 3,050,926 Expenditures Public works 2,542,409 2,472,097 2,472,097 Total expenditures 2,542,409 2,472,097 2,472,097 Excess [deficiency] of revenues over [under] expenditures 409,752 578,829 578,829 Other financing sources [uses] Transfers [out] (491,500) [411,500) [411,500) Total other financing sources [uses] [491,500) [411,500) [411,500) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses) [81,748) 167,329 167,329 Unreserved fund balance, January 1 1,544,357 1, 191,230 1, 191,230 Prior year cancelled encumbrances 5,525 Unreserved fund balances, December 31 $ 1,468, 134 $ 1,358,559 $ 1,358,559 See independent auditor's report on the financial statements. 94 Variance with Final Budget Positive [Negative] $ (107, 147] 8,382 (98,765) (70,312) [70,312) [169,077) [80,000) (80,000) [249,077) 353,127 5,525 $ 109,575 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 755,270 $ 825,900 $ Investment revenue 545 Miscellaneous 129,204 50,000 Total revenues 885,019 875,900 Expenditures Recreation 950,840 838,456 Total expenditures 950,840 838,456 Excess [deficiency] of revenues over [under] expenditures [65,821] 37,444 Other financing sources [uses] Transfers [out] [25,000] Total other financing sources [uses] [25,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [65,821] 12,444 Unreserved fund balance, January 1 116,032 133,136 Unreserved fund balances, December 31 $ 50,211 $ 145,580 $ See independent auditor's report on the financial statements. 95 Final 761,000 79,840 840,840 954,700 954,700 [113,860] [113,860] 116,032 2,172 Variance with Final Budget Positive [Negative] $ [5,730] 545 49,364 44,179 3,860 3,860 48,039 48,039 $ 48,039 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, 2018 Budgeted Amounts Actual Original Revenues Charges for services $ 408,974 $ 250,000 $ Investment revenue 6,315 2,500 Miscellaneous 6,854 Total revenues 422, 143 252,500 Expenditures General government 254,669 281,306 Total expenditures 254,669 281,306 Excess [deficiency] of revenues over [under] expenditures 167,474 [28,806] Unreserved fund balance, January 1 919,375 862,316 Unreserved fund balances, December 31 $ 1,086,849 $ 833,510 $ See independent auditor's report on the financial statements. 96 Final 250,000 2,500 252,500 281,306 281,306 [28,806] 862,316 833,510 Variance with Final Budget Positive [Negative] $ 158,974 3,815 6,854 169,643 26,637 26,637 196,280 57,059 $ 253,339 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) HEAL TH INSURANCE FUND For the Year Ended December 31, 2018 Budgeted Amounts Actual Original Final Revenues Charges for services $ 7,010,936 $ 7,044,200 $ 7,044,200 Investment revenue 18,520 5,000 5,000 Miscellaneous 60,258 5,000 5,000 Total revenues 7,089,714 7,054,200 7,054,200 Expenditures General government 6,028,279 6,402,432 6,402,432 Total expenditures 6,028,279 6,402,432 6,402,432 Excess [deficiency] of revenues over [under] expenditures 1,061,435 651,768 651,768 Unreserved fund balance, January 1 2,050,972 3,086,108 3,086,108 Unreserved fund balances, December 31 $ 3,112,407 $ 3,737,876 $ 3,737,876 See independent auditor's report on the financial statements. 97 Variance with Final Budget Positive [Negative] $ [33,264) 13,520 55,258 35,514 374,153 374,153 409,667 [1,035,136] $ ~625,469J Revenues 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, 2018 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Investment revenue Miscellaneous $ 1,327,390 $ 668 6,146 - $ 40 17,500 - $ 1,327,390 Total revenues Expenditures General government Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 Unreserved fund balance, December 31 1,334,204 1,491,671 1,491,671 [157,467] 190,000 190,000 32,533 21,595 $ 54, 128 $ 40 628 17,500 [11,354] 17,540 17,540 1,316,664 1,435,015 1,435,015 [56,656] 1,435,015 1,435,015 [56,656] [1,417,475] [1,417,475] 1,260,008 1,416,850 1,416,850 [1,226,850) 1,416,850 1,416,850 [1,226,850] [625] [625] 33,158 734 734 20,861 109 $ 109 $ 54,019 ---------- See independent auditor's report on the financial statements. 98 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. 99 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2018 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 1,087,616 $3,112,407 Inventory and prepaid supplies Total current assets 1,087,616 3,112,407 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 1,087,616 3,112,407 Deferred outflows of resources: KPERS OPEB deferred outflows of resources Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 1,087,616 $3,112,407 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 767 $ - Current portion of compensated absences payable Current portion of accrued claims payable 183,514 380,980 Total current liabilities (payable from current assets) 184,281 380,980 Noncurrent liabilities: Compensated absences payable Accrued claims payable 55,264 Net KPERS OPEB obligation Net pension liability Total noncurrent liabilities 55,264 Total liabilities 239,545 380,980 Deferred inflows of resources KPERS OPEB deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 239,545 $ 380,980 Net Position Invested in capital assets, net of related debt $ -$ - Un restricted 848,071 2,731,427 Total net position $ 848,071 $2,731,427 See independent auditor's report on the financial statements. 100 Total Internal Central Service Garage Funds $ 95,062 $4,295,085 111,486 111,486 206,548 4,406,571 168,234 168,234 152,573 152,573 15,661 15,661 222,209 4,422,232 1,401 1,401 25,285 25,285 26,686 26,686 $248,895 $ 4,448,918 $ 40,934 $ 41,701 33,989 33,989 564,494 74,923 640,184 25,399 25,399 55,264 5,469 5,469 154,549 154,549 185,417 240,681 260,340 880,865 133 133 11,300 11,300 11,433 11,433 $ 271,773 $ 892,298 $ 15,661 $ 15,661 [38,539) 3,540,959 $ [22,878] $ 3,556,620 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2018 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 408,974 $ 7,010,936 $ 1,327,390 Miscellaneous 6,855 60,258 6,145 Total operating revenues 415,829 7,071,194 1,333,535 Operating expenses General government 271,535 6,013,569 1,545,842 Depreciation 7,699 Total operating expenses 271,535 6,013,569 1,553,541 Operating income [loss] 144,294 1,057,625 [220,006] Nonoperating revenues [expenses] Investment revenue 6,315 18,520 668 Total other operating revenues [expenses] 6,315 18,520 668 Income [loss] before transfers 150,609 1,076,145 [219,338] Transfers from [to] other funds Transfers in 190,000 Total transfers 190,000 Change in net position 150,609 1,076,145 [29,338] Net position, January 1 697,462 1,655,282 10,853 Prior period adjustment [4,393] Net position, January 1, restated 697,462 1,655,282 6,460 Net position, December 31 $ 848,071 $ 2,731,427 $ [22,878J See independent auditor's report on the financial statements. 101 Total Internal Service Funds $ 8,747,300 73,258 8,820,558 7,830,946 7,699 7,838,645 981,913 25,503 25,503 1,007,416 190,000 190,000 1, 197,416 2,363,597 [4,393] 2,359,204 $ 3,556,620 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2018 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 425,839 $6,996,225 Cash paid to suppliers of goods or services [270,848] (6,047,211] Cash paid to employees Other operating receipts 6,855 60,258 Net cash provided by [used in] operating activities 161,846 1,009,272 Cash flows from investing activities Interest received 6,315 18,520 Cash flows from noncapital financing activities Transfers in Net cash provided by [used in] noncapital financing activities Net increase [decrease] in cash and cash equivalents 168,161 1,027,792 Cash and cash equivalents, January 1 919,455 2,084,615 Cash and cash equivalents, December 31 $ 1,087,616 $ 3, 112,407 See independent auditor's report on the financial statements. 102 Total Internal Central Service Garage Funds $1,327,391 $ 8,749,455 (1,177,372] (7,495,431] (297,532] (297,532] 6,144 73,257 (141,369] 1,029,749 668 25,503 190,000 190,000 190,000 190,000 49,299 1,245,252 45,763 3,049,833 $ 95,062 $4,295,085 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2018 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss] $ 144,294 $1,057,625 $ (220,006) $ 981,913 Adjustments to reconcile operating income [loss] to net cash provided by [used in) operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in KPERS OPEB liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows 687 (33,642) 16,865 [14,711) 7,699 53,639 4,554 16,766 5,818 [11,010) 1,076 95 7,699 53,639 4,554 [16,189) 5,818 (11,01 OJ 1,076 2,154 95 Net cash provided by [used in] operating activities $ 161,846 $1,009,272 $ (141,369) $1,029,749 See independent auditor's report on the financial statements. 103 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. 104 Special Fire Assessment Insurance Escrow Proceeds ASSETS Cash and investments 108 806 s 18,967 Total assets 108,806 $ 18,967 LIABILITIES Accounts payable s 108,806 s 18,967 Total hab1ht1es s 108 806 $ 18,967 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December31, 2018 Court Police Section OTF Payroll Bond and lnvesbgat1on 125 Federal Cleanng Rest1tut1on Account C1t1zenshm Plan Forfeiture $[339,790] s 18811 ~ s 30 797 $215,856 _s __ s [339,790] s 18 811 ~ s 30,797 $215,856 _$ __ $ [339,790] $ 18,811 ~ s 30,797 $215,856 _s __ s [339,790] s 18 811 ~ s 30,797 $215,856 _s __ See independent aud1to~s report on the financial statements 105 Beechcraft Bail OTF DTF Remedrt1on Bond .l.2£fil Reserve ~ Escrow Totals $41,2.ol1 $33,475 s 179 386 $1135 $312,065 $41241 $33 475 $ 179 386 $1135 $312,065 $41,241 $33,475 s 179,386 $1,135 $312,065 $41,241 $33,475 s 179 386 $1,135 $312,065 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2018 Balance December 31 , 2017 Additions Deductions Cash and investments Special Assessment Escrow $ 90,849 $ 17,957 $ Fire Insurance Proceeds 18,869 47,855 Payroll Clearing [365,473] 25,683 Court Bond and Restitution 23,818 Police Investigation Account 3,379 2 Citizenship Trust 94,580 41,498 Section 125 Plan Fund 291,014 353,619 DTF Federal Forfeiture 3,696 DTF Local 47,216 23,527 DTF Reserve 26,299 13,102 Beechcraft Remediation Settlement 154,181 25,205 Bail Bond Escrow 1,127 8 Total Assets $ 389,555 $ 548,456 $ Accounts Payable Special Assessment Escrow $ 90,849 $ 17,957 $ Fire Insurance Proceeds 18,869 47,855 Payroll Clearing [365,473] 25,683 Court Bond and Restitution 23,818 Police Investigation Account 3,379 2 Citizenship Trust 94,580 41,498 Section 125 Plan Fund 291,014 353,619 DTF Federal Forfeiture 3,696 DTF Local 47,216 23,527 DTF Reserve 26,299 13, 102 Beechcraft Remediation Settlement 154,181 25,205 Bail Bond Escrow 1,127 8 Total liabilities $ 389,555 $ 548,456 $ See independent auditor's report on the financial statements. 106 - 47,757 5,007 105,281 428,777 3,696 29,502 5,926 625,946 - 47,757 5,007 105,281 428,777 3,696 29,502 5,926 625,946 Balance December 31, 2018 $ 108,806 18,967 [339,790] 18,811 3,381 30,797 215,856 41,241 33,475 179,386 1,135 $ 312,065 $ 108,806 18,967 [339,790] 18,811 3,381 30,797 215,856 41,241 33,475 179,386 1,135 $ 312,065 STATISTICAL SECTION Schedule 1 City of Salina. Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Net investment in capital assets $101,974 85% $113,001 96% $109,289 93% $112,929 94% $116,585 90% $ 115,589 90% $ 130,401 122% $124,635 108% $129,921 105% $ 144,846 109% Restricted 1,174 1% 988 1% 1,712 1% 1,082 1% 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2% Unrestricted 16,706 14% ~ 3% ~ 5% ~ 5% ~ 9% ~ 9% (24,922) -23% ~ -9% ~ -7% ~ -10% Total governmental activities net position $119,854 100% $117,797 100% $117 334 100% $119,522 100% $129,423 100% $ 127,878 100% $ 106,703 100% $115,868 100% $123,701 100% $ 133,453 100% Business-type activities Net investment in capital assets $ 48,234 79% $ 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% Restricted 1,553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% Unrestricted ~ 19% 14,306 22% 24,528 35% 21,450 29% ~ 23% ~ 24% ---1M.lQ 18% 23,621 27% 24,255 27% 26,503 29% Total business-type activities net position $ 61,269 100% $ 63,937 100% $ 70 308 100% $ 73,860 100% $ 76,450 100% $ 82 778 100% $ 85,229 100% $ 87,560 100% $ 89,083 100% $ 90,383 100% Primary government Net investment in capital assets $150,208 83% $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% Restricted 2,727 2% 2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% 3,878 2% Unrestricted ~ 16% ~ 10% 30,867 16% 26,961 14% 29,422 14% 30,959 15% ~ -5% ~ 6% 16,023 8% ~ 6% Total primary government net position $181,123 100% $181,736 100% $187,599 100% $193,382 100% $205,873 100% $ 210,658 100% $ 191,932 100% $ 203,428 100% $212,784 100% $ 223,835 100% Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 107 Expenses Governmental act1v1t1es General government Pubhc safety Pubhcworks Pubhc health and sanitabon Culture and recreation Planning and development Interest on long tenn debt Total governmental act1v1t1es expenses Business-type ac!Jv1bes Sohd waste disposal Water and sewer Sanitation GoWcourse Total business-type act1v1t1es expenses Total pnmary government expenses Program Revenues Governmental acbv1t1es Charges for services General government Pubhc safety Pubhc works Public health and sanitabon Culture and recreation Planning and development Operabng grants and contnbut1ons Capital grants and contnbubons Total governmental act1V1bes program revenues Business-type acbv1bes Charges for services Solid waste disposal Water and sewer Sanrtabon GoWcourse Operabng grants and contnbut1ons Capital grants and contnbut1ons Total business-type act1vibes program revenues Total pnmary government program revenues ~ 14,664 16,539 9,781 1,390 5,397 3,375 51,146 2,287 12,995 2,224 ~ 18<403 $ 69,549 $ 4,599 2,913 164 42 1,936 267 3,163 13,084 2,903 14,980 2,292 757 20,932 s 34 016 Schedule2 City of Salina, Kansas Changes in Net Pos1t1on Last Ten Fiscal Years (accrual basis of accounting) (1n OOO's) 2010 2011 ZQll $ 10,845 $ 13,614 11,278 18,592 18,579 19,066 9,782 9,858 10,957 1,365 1,368 1,383 8,572 6,693 5,338 3,716 3,450 3,362 ~ ----1.&§Q. ----1.lli 55,128 55212 53,298 3,010 2,945 2,067 14,050 13,597 14,897 2,261 2,261 2,«1 ____!11. ~ ___fil 20138 19,628 20,128 s 75,266 s 74 840 s 73<426 $ 5,143 $ 6,106 $ 6,328 3,969 3,766 4,290 198 262 306 37 <43 46 2,817 3,140 1,728 144 153 158 3,415 2,907 4,<495 15 723 16377 ---1L.lli. 2,853 2,90<4 3,137 16,520 17,904 19,099 2,310 2,334 2,<462 736 636 783 202 ~ ---1Zi 22,419 27 78<4 25,755 s 381<42 $ 44161 s 43106 Fiscal Year 2Qll 2014 W§. 2Q.1§ ~ ~ $ 10,978 12,175 $ 10,743 $ 9,188 $ 9,780 $ 12,013 19,6"9 20,208 21,084 22,232 23,120 23,892 11,064 11,401 9,049 9,773 10,345 10,458 1,369 347 995 1,095 1,126 1,256 4,809 5,156 6,517 6,612 6,880 7,040 3,399 3,236 1,915 2,047 1,835 2,369 ~ _J1!11. -----1..IB ____bill -----1ill. ___b1.!l 53,221 54340 52077 ~ __Milli 59145 3,532 1,867 1,766 2,335 2,365 2,382 15,418 14,938 11,712 14,807 15,650 15,190 2,237 2,399 1,909 2,043 2,178 2,419 ~ ~ __Bl ____m. ____lli_ ~ ~ 20041 16208 19977 21,045 20917 $ 75 176 $ 74 381 s 68,285 s 731895 $ 75,856 $ 801062 $ 5,548 $ 5,662 $ 3,151 s 3,134 $ 3,470 $ 3,569 4,656 4,222 <4,600 4,891 4,601 4,815 277 255 193 238 348 285 34 46 <46 44 50 47 1,466 1,533 1,501 1,638 1,541 1,545 161 167 73 140 91 150 4,200 4,015 3,394 4,332 4,541 4,299 ____Ill ~ 16 342 15900 12958 ~ 14,642 19345 3,138 3,024 2,519 2,795 3,165 3,097 17,938 18,742 19,059 19,322 19,855 20,202 2,51<4 2,553 2,529 2,751 2,885 3,006 719 811 820 789 798 756 __ 1_1_5 24,309 25,245 24,927 25,657 26703 27 061 s 401651 s 41145 s 371885 s <40 807 $ <41345 $ 46 406 Net (Expense) Revenue Governmental act1vrt1es Business-type acbv1t1es Total pnmary government net expense $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,440) $ (39,119) $ (38,768) $ (40,169) $ (39,800) ~ ___bill ~ ~ ~ ~ ~ ~ ~ __filQ $ (35,533) $ (37,124) $ (30,679) $ (30,320) $ (34,525) $ (33,236) $ (30,400) $ (331088) $ (34,511) $ (33,657) General Revenues and Other Changes In Net Position Governmental act1v1ties Taxes Property taxes, general purpose $ 9,019 $ 7,803 $ 7,783 8,272 $ 8,031 Property taxes, debt service 1,711 2,230 2,779 2,439 2,362 Motor vehicle taxes 1,135 1,145 1,150 1,153 1,200 Sales tax, general purpose 11,669 11,118 11,767 12,165 12,260 Selective sales tax 3,380 4,108 4,080 4,210 4,281 Other taxes 5,791 6,298 6,390 6,<486 6,630 Investment revenues 277 81 77 66 67 Miscellaneous 505 565 872 660 9,918 Transfers, net ~ ___ 9_2 ~ __ 3_0 ____m Total governmental act1v1bes 33,742 33440 35,097 35481 45 748 Business-type actJv1bes Investment revenues 242 67 84 79 49 Miscellaneous 352 341 330 <434 279 Re1mbur.1ements Transfers. net _.@2) ____fil) ___i1W ___QQ) ~ Total business-type act1v1t1es ____E!. ~ ~ ~ ____Jfil) Total pnmary government $ 34,081 $ 331756 $ 35,312 $ 35,96" s 45, 126 Change In Net Position Governmental acbv1t1es $ (4,320) $ (5,965) $ (3,738) $ (466) $ 8,869 Business-type actJvrt1es ~ ---1.fil ~ ___hl!Q_ ----1.lli. Total pnmary government $ (1,452) $ (3,368) $ 4,633 $ 5644 $ 10601 Source City of Salina Comprehensive Annual Financial Reports, 2009 -2018 108 8,315 $ 8,242 $ 8,196 $ 9,101 $ 8,623 2,578 2,766 3,022 2,487 2,457 1,250 1,312 1,370 1,372 1,428 12,689 12,931 12,781 12,906 13,292 4,461 4,558 4,901 8,832 8,917 7,231 7,363 7,991 6,900 7,241 98 86 148 92 183 1,160 2,371 5,842 2,003 1,062 __lE_ ~ ~ ~ ~ 38569 43448 47 851 48,002 48 034 51 56 78 129 233 97 103 153 180 132 79 ~ ____Q2!!!) ~ ~ ~ ___il2W ___@.ill) __ill_W ~ $ 38 897 $ 39,855 $ 44 427 $ 43,867 $ 43,589 $ 129 $ 4,329 $ 9,083 $ 7,833 8,233 ----22B ~ ~ ~ ~ $ 5661 $ 9,455 $ 11 339 $ 9356 $ 9 931 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2011 2009 2010 (Note 1) 2012 2013 2014 2015 2016 2017 2018 General Fund Reserved $ 508 $ 99 $ $ $ $ $ $ $ $ Nonspendable 90 116 81 107 111 131 153 152 Restricted Committed Assigned 293 540 331 239 199 136 214 340 Unreserved/unassigned ~ ~ ~ ~ ~ ~ ~ 4,765 6,516 6,251 Total general fund $ 5,088 3,617 $ 3,837 $ 3,828 $ 3,550 ~ ~ $ 5,032 $ 6,883 $ 6,743 Restatement 156 Restated fund balance $ 3,773 All other governmental funds Reserved $ 11,092 $ 6,413 $ $ $ $ $ $ $ $ Nonspendable Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 Committed 127 (516) 7,486 9,886 8,695 14,284 10,072 7,325 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 1,227 Unreserved/unassigned ~ ~ ~ (6,823) (28) (852) Total all other governmental funds $ 15,116 $ 5,283 $ 8,061 ~ ~ $ 14,076 ~ $ 11,646 $ 14,876 $ 12,348 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, 2009 -2018 109 Schedule4 City of Salina, Kansas Changes m Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (1n OOO's) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues Taxes (see Schedule 5) $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 Intergovernmental 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 Special assessments 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 Licenses and permits 10 11 6 8 9 7 10 7 6 3 Charges for services 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 Investment revenue 210 64 69 47 40 59 47 142 79 157 Reimbursements 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 238 Miscellaneous 438 448 599 537 ~ 799 1,853 4 315 1,851 884 Total revenues 44,693 47,018 48 821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 Expenditures General government 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 Public safety 17,883 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 Publicworlls 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 Public health and sanitation 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 1,236 Culture and recreation 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 Planning and development 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 Miscellaneous 32 Capital outlay 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 Debt service Pnncipal 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 Interest 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 Deposit to escrow 107 92 Total expenditures 61,072 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 Other financing sources (uses) Bonds and notes issued 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 Bond and note premium 1,369 47 23 60 185 302 369 1,503 95 70 Transfers 1n 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 Transfers out (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) Other 156 Total other financing sources (uses) 25,259 ___zm ~ ~ ~ 5,669 10 923 39,905 15 764 17,436 Net change in fund balance $ 8,880 $(11,898) $ 2,803 L...Ei $ 6 775 $ 550 $ (12,046) $ 10,268 $ 51082 $ (3,362) Debt service as a percentage of non-capital expenditures 17% 21% 17% 28% 18% 18% 20% 50% 16% 37% Source City of Salina Comprehensive Annual Financial Reports, 2009 -2018 110 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Real estate $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 $ 10,804 Delinquent 760 278 274 245 248 235 279 246 210 276 Motor vehicle 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 General sales 11,669 11, 117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 Selective sales 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 Other taxes 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7 240 Total taxes $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 Source City of Sahna Comprehensive Annual Financial Reports, 2009 -2018 111 Schedule6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Fiscal Estimated Total Assessed (Budget) Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Personal Property State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value (Note 2) Market Value 2009 $ 356,678,712 $ 28,373,980 $ 14,929,456 $ 399,982, 148 25.886 $ 51,351,656 $ 451,333,804 $ 2,914,775,730 15.48 2010 $ 358,979,211 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 15.48 2011 $ 367,750,803 $ 19,918,188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531,746 15.67 2012 $ 369,416,422 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884,188,981 15.65 2013 $ 370,390,092 $ 17,769,120 $ 16,948,264 $ 405,107,476 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 15.71 2014 $ 376,131,346 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 15.64 2015 $ 381,087,426 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531,741 15.66 2016 $ 389,872,825 $ 11,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51,833,505 $ 472,683, 104 $ 3,046,949,034 15.51 2017 $ 391,895,060 $ 11,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335,124 $ 3,097,885, 103 15.28 2018 $ 403,835,383 $ 10,130,718 $ 20,485,144 $ 434,451,245 26.129 $ 53,336,677 $ 487,787,922 $ 3,150,409,123 15.48 Note 1 : The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk 112 Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Ci of Salina Saline Coun USO 305 2 Other (1 Fiscal Debt Total Debt Total Debt Total (Budget) Operating Service City Operating Service USO Year Milla e Millage Milla e Millage Millage MillaQe I Other I Total 2009 21.749 4.137 25.886 29.347 29.347 46.339 12.208 58.547 10.971 124.751 2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.055 2011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.498 2012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.657 2013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.797 2014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.879 2015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.037 2016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.999 2017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.153 2018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.140 Source: Saline County Treasurer (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USO 306, USO 307, or USO 400. Total Tax Rates are different in the areas covered by these jurisdictions. 113 Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2008 (2007 Assessed Value) 2018 (2017 Assessed Value) Assessed % of Total Assessed % of Total Taxpayer Type of Business Valuation Valuation Rank Valuation Valuation Rank Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Kansas Gas Service Central Mall Realty Holding LLC S&B Motels Sams Real Estate Business Trust/Walmart Menard Inc. Individual Wal-Mart Real Estate Business Trust Great Plains Manufacturing Union Pacific Southwestern Bell Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Utility Pizza Manufacturing Regional Shopping Center Utility Regional Shopping Center Motel Discount Retail Stores Home Improvement Residential Discount Retail Stores Manufacturing Railroad Telephone Utility Hospital and Medical Offices 114 $ 7,287,074 12,382,582 2,633,187 9,003,313 2,388,908 1,913,209 3,627,525 2,308,375 4,783,821 5,580,586 --$ 51,908,580 $ 335,262,182 2.17% 3 $ 11,856,980 2.73% 1 3.69% 1 7,508,620 1.73% 2 NIA 4,674,872 1.08% 3 0.79% 7 3,784,188 0.87% 4 2.69% 2 3,696,437 0.85% 5 0.71% 8 3,424,974 0.79% 6 N/A 2,529,908 0.58% 7 N/A 2,501,856 0.58% 8 0.57% 10 2,333,789 0.54% 9 1.08% 6 2,282,451 0.53% 10 0.69% 9 N/A 1.43% 5 1.66% 4 -$ 44,594,075 $ 434,451,245 15.48% 10.26% Fiscal (Budget) Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Taxes Levied for the fiscal Delinquent year Amount Percentag~ Collections (1) $ 10,354,161 $ 9,923,959 95.8% $ 759,764 $ 10,276,905 $ 9,704,937 94.4% $ 278,656 $ 10,415,491 $ 10,287,770 98.8% $ 273,843 $ 10,570,420 $ 10,411,299 98.5% $ 245,086 $ 10,576,448 $ 10,145,404 95.9% $ 248,184 $ 10,908,147 $ 10,776,688 98.8% $ 398,820 $ 11,316,065 $ 10,460,246 92.4% $ 617,496 $ 11,740,993 $ 10,972,299 93.5% $ 245,577 $ 11,254,398 $ 11,239,051 99.9% $ 209,950 $ 11,260,358 $ 10,803,591 95.9% $ 276,340 Total Tax Distributions Amount $ 10,683,723 $ 9,983,593 $ 10,561,613 $ 10,656,385 $ 10,393,588 $ 11, 175,508 $11,077,742 $11,217,876 $ 11,449,001 $11,079,931 Percentage of levy 103.2% 97.1% 101.4% 100.8% 98.3% 102.5% 97.9% 95.5% 101.7% 98.4% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 115 Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 City Direct Tax Rate General 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Special purpose 0.25%/0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% County-wide Tax Rate 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) 62.46% 61.58% 63.34% 61.72% 60.86% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to . 75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 116 2017 2018 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 60.28% 59.85% Schedule 11 City of Salina, Kansas Water Sales by Class of Customer Last Ten Fiscal Years 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water Rate Class Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential 17,792 1,043,774 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 Commercial 1,589 339,507 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 Industrial 46 152,910 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 Government 104 41,793 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 Apartment 182 71,503 172 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 Schools 84 39,815 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 Industrial special 1 32,934 1 44,457 1 44,051 1 40,448 1 20,439 Consumed in production 18 26,223 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 Rural water 1 22.824 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 Hospitals 13 20,488 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 Religious/non profit 39 7,312 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 Other taxable deductions 699 Engineering studies 8 6,176 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 Providing taxable service 2 4,869 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 Sale of component parts 8 5,200 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 Fire hydrant 2 1,032 3 2.424 3 1,389 4 2,533 3 1,922 2 1.474 3 1.727 3 1,790 3 2,829 Industrial consumed in production 3 2,314 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 Sales of farm equipment 1 205 1 213 1 56 1 83 1 107 1 48 1 53 1 54 1 104 1 56 19,893 1,818,879 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 Water Rate Schedule: Monthly meter charge (5/8") $ 4.44 $ 4.51 $4.60 $4.74 $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 Commodity charge (per 000 gal.): O -2000 gal. $ 2.34 $ 2.55 $3.77 $3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 2001 -10.000 gal Over 10,000 gal. Excess use charge $ 4.68 $ 5.10 $7.54 $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 Wastewater Rate Schedule: Monthly base charge s 6.31 $ 6.42 $6.57 $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 Unit cost (per 000 gal.): s 2.88 $ 3.08 $4.48 $4.61 $4.79 $4.94 $5.01 S5.19 S5.29 $5.51 Water 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 monthty water consumption. 2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge Ylhich is double the consumption rate Source: City of Salina Waler Customer Accounting Office. 117 Governmental Activities General Obligation Loans Fiscal Year Bonds Payable Capital Lease Temporary Notes 2009 $ 52,067.590 $ $ $ 2010 $ 53.120,952 $ $ $ 2,500,000 2011 $ 55,225,670 $ $ $ 3,400,000 2012 $49.109,575 $ $ $ 1,485,000 2013 $49,631,797 $ $ $ 3,800,000 2014 $ 50,033,555 $ $ 176,235 $ 5,000,000 2015 $ 50,840,632 $ $ 479,366 $ 5,995,000 2016 $ 51,816,399 $12,157,127 $ 321.174 $ 11,505,000 2017 $ 55,994,305 $12,171,090 $ 157,868 $ 6,811.742 2018 $51,968,310 $ 12.185,053 $ $ 18,123,505 Source: City of Salina Comprehensive Annual Financial Reports. 2009 -2018 Schedule 12 City of Salina. Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Business-Tlpe Activities General Obligation Water Revenue Loans Bonds Bonds Payable $ 2,320,000 $ 2,320,000 $ 5,862,516 $ 8,614,576 $ 1,580,000 $ $ 7,417,907 $ 16,193,925 $ $ 9,613,926 $ 15,850,228 $ $ 8,519,799 $ 15,226,532 $ $ 9,587,351 $ 14,592,836 $ 6,208, 102 $ 8,539,773 $ 13,949, 139 $ 5,753,620 $ 7,640,381 $ 13,285,443 $ 7,432,024 $ 6,520,433 $ 12,606,747 $ 8,862,810 $ 5,282,578 $ 11,898,051 $10,632,351 118 Percentage Temporary Total Primary of Personal Notes Government Income Per Capita $ $ 62,570, 106 3.5% $ 1,346.09 $ $ 65,815,528 3.8% $ 1,425.20 $ $ 82,237,502 4.3% $ 1,723.80 $ $ 76,058,729 3.8% $ 1,583.07 $ $ 77,178,128 3.7% $ 1,613.05 $ $ 85,598,079 4.1% $ 1,788.25 $ $ 85,557,530 4.1% $ 1,789.42 $ $ 104.157,548 5.0% $ 2,200.39 $ $ 103. 124. 995 4.9% $ 2, 194.43 $ $ 110,089,848 4.9% $ 2,342.64 Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding Percentage of Temporary Less Debt Net General Actual Taxable General Obligation Bonds Capital Lease Notes Total Service Fund Bonded Debt Value of Per Capita $ 54,387,590 $ 61,735,528 $ 62,443,577 $ - $ - $ 54,387,590 $ 735,291 $ 53,652,299 11.9% $1, 154.23 $ - $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $1,378.60 $ 58,723,501 $ $ 58, 151,596 $ $ 59,620,906 $ $ 59,380,405 $ $ 59,456,780 $ $ 62,514,738 $ $ 57,250,888 $ 176,235 479,366 321, 174 157,868 $ 3,400,000 $ 65,843,577 $ 1,236,026 $ 64,607,551 14.4% $1,354.26 $ 1,485,000 $60,208,501 $ 582,412 $59,626,089 13.2% $1,241.05 $ 3,800,000 $61,951,596 $ 707,763 $61,243,833 13.5% $1,280.02 $ 5,000,000 $64,797,141 $ 407,864 $64,389,277 14.1% $1,345.17 $ 5,995,000 $65,854,771 $ 745,339 $65,109,432 14.1% $1,361.75 $11,505,000 $ 71,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 $ 6,811,742 $ 69,484,348 $ 1,509,863 $ 67,974,485 14.4% $1,446.45 $18,123,505 $75,374,393 $ 1,851,358 $73,523,035 15.1% $1,564.52 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 119 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2018 Net General Obligation Percentage Bonded Debt Applicable to City Jurisdiction Outstanding of Salina Direct: City of Salina $ 73,523,035 100.00% Overlapping: Salina Airport Authority 21,427,000 100.00% Saline County 224,409 73.45% USD 305 117,030,000 93.11% Total Overlapping Debt 138,681,409 Total Direct and Overlapping Debt $ 212,204,444 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 73,523,035 21,427,000 164,823 108,969,011 130,560,834 $ 204,083,869 $ 4,268.38 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 120 Legal Debt Margin Calculation for 2018 Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit $ 487,787,922 146,336,377 $ 110,089,848 (5,282,578) (11,898,051) (22,817,404) p,851,358) $ 68,240,457 $ 78,095,920 2009 $ 135,400,141 $ 53,652,299 $ 81~ $ 40% Schedule 15 City of Salina. Kansas Legal Debt Margin Last Ten Fiscal Years 2010 WJ. 2012 134,340,263 $ 134,928, 191 $ 135,421,208 58,411,185 57,747,032 49,309,445 75,929,078 $ 77,181,159 $ 86, 111,763 43% 43% 36% 121 Fiscal Year 2013 2014 2015 2016 2017 2018 $ 136, 196,966 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 52,724,034 54,625,691 56,090,293 62,072,485 61,296, 184 68,240,457 $ 83,472,932 $ 82,270,393_ $ 82,818,785 $ 79, 732,446 $ 80,704,353 ~920 39% 40% 40% 44% 43% 47% Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Utility Service Operating Net Available Debt Service Fiscal Year Char1:1es Ex~enses Revenue Principal Interest 2009 $15,151,305 $ 10,693,654 $ 4,457,651 $ 1,276,243 $ 455,294 2010 $16,565,880 $ 11,803,594 $ 4,762,286 $ 740,000 $ 91,450 2011 $17,976,508 $11,905,114 $ 6,071,394 $ 1,580,000 $ 496,760 2012 $19,163,426 $12,222,431 $ 6,940,995 $ 340,000 $ 596,992 2013 $17,974,089 $13,373,088 $ 4,601,001 $ 620,000 $ 590, 191 2014 $18,964,164 $12,112,288 $ 6,851,876 $ 630,000 $ 577,791 2015 $19,139,612 $ 9,859,974 $ 9,279,638 $ 640,000 $ 565,191 2016 $19,389,348 $11,800,473 $ 7,588,875 $ 660,000 $ 549,191 2017 $19,958,862 $13,148,035 $ 6,810,827 $ 675,000 $ 529,391 2018 $ 20,382,469 $12,973,621 $ 7,408,848 $ 705,000 $ 509,141 Source: City of Salina Comprehensive Annual Financial Reports, 2009 -2018 City of Salina Debt Service Schedules 122 Debt Service Covera1:1e 2.57 5.73 2.92 7.41 3.80 5.67 7.70 6.28 5.65 6.10 Per Capita Personal Income Fiscal Year Population (Saline County) 2009 46,483 $ 38,392 2010 46,180 $ 37,880 2011 47,707 $ 40,512 2012 48,045 $ 41,762 2013 47,846 $ 43,078 2014 47,867 $ 43,736 2015 47,813 $ 44,065 2016 47,336 $ 44,230 2017 46,994 $ 44,732 2018 46,994 $ 47,945 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Personal Income, Salina (interpolated) $ 1, 784,575,336 $ 1,749,298,400 $ 1,932,705,984 $ 2,006,455,290 $ 2,061, 109,988 $ 2,093,511,112 $ 2, 106,879,845 $ 2,093,647,612 $ 2, 102, 135,608 $ 2,253, 127' 330 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USO 305 Rate City of Salina Headcount 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,258 7,289 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 3.3% 30,174 7,180 Personal income for Salina is derived from the population and per capita personal income for Saline County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina Percentage Free and Per Capita .5 Reduced City .5 cent cent sales Lunch sales tax Tax 58.7% $4,965,147 $ 106.82 57.8% $4,803,553 $ 104.02 58.7% $ 5,076,751 $ 106.42 59.1% $ 5,241,205 $ 109.09 60.7% $ 5,326,723 $ 111.33 61.3% $ 5,555,601 $ 116.06 61.8% $5,670,040 $ 118.59 68.7% $5,727,260 $ 120.99 62.1% $5,755,869 $ 122.48 61.7% $5,770,174 $ 122.79 Increase in per capita Sales Tax (10 years) Increase in per capita Personal Income USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Asa%of per capita personal income 0.278% 0.275% 0.263% 0.261% 0.258% 0.265% 0.269% 0.274% 0.274% 0.256% 14.3% 20.5% Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 123 Employer Salina Regional Health Center Schwan's Global Supply Chain Unified School District No 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Walmart Blue Philips Lighting Company Raytheon Aircraft Eldorado National Total Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago 2009 Type of Business Health Care Frozen Pizza Manufacturing Public School System Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing Manufacturing Retail Fluorescent Lamps Aircraft Manufacturing Susses/Recreational Vehicle Employees Rank 2,093 1,850 935 650 800 493 600 357 255 8,033 1 2 3 5 4 7 6 8 9 Source: Salina Chamber of Commerce 124 Percentage of Labor Force 7.8% 6.9% 3.5% 2.4% 3.0% 1.8% 2.2% 1.3% 1.0% 30.0% Emplo~ees 1,800 1,700 1,500 1,100 600 425 300 250 250 230 8,155 2018 Percentage of Labor Rank Force 1 6.0% 2 5.6% 3 5.0% 4 3.6% 5 2.0% 6 1.4% 7 1.0% 8 0.8% 9 0.8% 10 0.8% 27.0% APPENDIX D 2019 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2019 prepared on a cash basis. This information has been provided by City staff and is believed to be accurate but is subject to revision both before and during the auditing process. Budgeted Funds 2019 Budget 2019 Actuals Ending Fund Balance Revenues Expenditures Net Change Revenues Expenditures Net Change 12/31/2019 Target Balance Budgeted Funds: -Tax Funds -General 100 42,904,224 41,466,380 1,437,844 43,953,627 41,551,143 2,402,484 7,019,276 8,500,000 Debt Service 500 6,254,642 7,319,220 (1,064,5 78) 6,237,206 6,949,849 (712,644) 1,089,324 200,000 ----------Special Revenue Funds Sales Tax Capital 210 8,501,016 9,614,958 (1,113,942) 8,500,559 8,259,987 240,572 1,832,941 750,000 Sales Tax EcoDevo 220 356,987 480,000 (123,013) 344,976 533,897 (188,922) 708,563 50,000 Tourism 240 1,656,712 1,656,562 150 1,895,818 1,895,818 853 Special Gas 270 1,580,590 1,472,073 108,517 2,019,141 1,348,775 670,366 1, 794,474 500,000 Arts & Humanities 200 1,057,948 1,039,097 18,851 1,040,274 992,216 48,058 49,764 100,000 Business Improvement District 230 90,528 90,500 28 83,701 85,201 (1,500) 4,661 Special Parks 250 213,851 259,000 (45,149) 227,304 6,620 220,684 348,866 50,000 Special Alcohol 260 213,751 213,751 227,304 227,304 234 Neighborhood Parks 280 5,550 10,000 (4,450) 4,500 4,500 28,751 TPEC 290 764,496 725,000 39,496 765,916 663,614 102,302 199,983 ------Enterprise Fun~ . --Sanitation 300 3,453,500 3,547,723 (94,223) 3,228,431 2,970,966 257,465 1,725,600 500,000 Solid Waste 320 2,880,000 3,071,997 (191,997) 3,489,733 2,995,684 494,049 4,512,594 500,000 Golf 340 966,347 955,806 10,541 907,198 935,700 (28,502) 21,709 100,000 Water/Wastewater 370 21,107,519 19,307,493 1,800,026 20,306,491 16,280,904 4,025,586 12,604,765 5,000,000 --Internal Service Funds Central Garage 450 1,641,184 1,564,013 77,171 1,574,530 1,474,000 100,531 154,659 100,000 Workers' Compensation 410 318,433 430,418 (111,985) 312,961 336,880 (23,920) 933,943 750,000 Health 420 6,553,584 6,547,553 6,031 6,104,976 7,028,930 (923,954) 2,188,453 1,500,000 CONTINUING DISCLOSURE UNDERTAKING $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A $7,050,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 DATED APRIL 29, 2020 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2020 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 29, 2020, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or Continuing Disclosure Undertaking the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuers Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2019, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, Continuing Disclosure Undertaking 2 as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section ( d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity of less than 18 months. ( c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; ( 11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an Continuing Disclosure Undertaking 3 action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, ( 1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) Continuing Disclosure Undertaking 4 between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court oflaw. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] Continuing Disclosure Undertaking 5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS Shandi Wicks. CMC. City Clerk Continuing Disclosure Undertaking S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY-Assessed Valuation • FINANCIAL INFORMATION CONCERNING JHE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers l l l CITY OF SALINA, KANSAS SPECIAL MEETING OF THE BOARD OF COMMISSIONERS March 25, 2020 4:00p.m. Mayor Hoppock asked the Oerk for verification that notice had been sent for today's City Commission meeting. The Oerk replied yes. The Special Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Michael L. Hoppock (presiding), Commissioners Trent W. Davis, M.D., Rod Franz, Melissa Rose Hodges, and Karl Ryan. Also present Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS None. CITIZENS FORUM Michael Schrage, City Manager, provided information regarding the new format for the meetings due to the guidance from the Centers for Disease Control (CDC) and the Kansas Governor including public input. He provided information regarding the meeting requirements for the Kansas Open Meeting Act. He also provided the call-in phone number along with the participant number that citizens would need to use. Mayor Hoppock made a few comments regarding the COVID-19 virus, the precautions necessary, thanked City staff, Saline County and Jason Tiller, Saline County Health Officer, for their hard work. He also made comments regarding the effect on local businesses and how the Salina Area Chamber of Commerce could be of assistance to those businesses. He lastly asked for all individuals to pray for our community, the nation, the first responders, and the business community. Kenny Hancock, Salina, provided the information on the level of detail between City staff and the baseball/ softball group on the creation of the development agreement for the baseball/ softball project and asked for a commitment that the City will consider discussing the project within the next 30 days and if that is not reasonable to extend another 30 days. Michael Schrage, City Manager, stated that the request was part of the first agenda item and can be discussed at that time. Jane Anderson, Friends of the River Foundation, provided information on the Smoky Hill River Renewal project Joan Ratzlaff, Salina, noted that there was a delay between the audio and the visual and urged the staff to think environmentally regarding plastic grass. She continued to provide her thoughts on the flow of the river and the river project. Page 1 l l l PUBuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of March 9, 2020. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) COVID-19 Related Budgetary Guidance. Michael Schrage, City Manager, explained the possible financial ramifications, revenue sources impacted, the 2020 Smoky Hill River Festival, baseball and softball project, fiscal impact and action options. Debbie Pack, Director of Finance & Administration, presented a financial overview. Michael Schrage, City Manager, provided additional information on the suggested direction to be provided by the City Commission to the City Manager. Commissioner Franz provided his thoughts on the significant impacts and the need to look 6 months to a year out along with need to coordinate with the entities that use the transient guest tax funds. Michael Schrage, Oty Manager, stated that staff was looking at the transient guest tax significantly. Commissioner Franz continued to provide his thoughts on the potential impact on the finances. Mayor Hoppock stated this was the first of many discussions on this topic but needed to make some decisions and then need to revisit the topic. Mayor Hoppock asked if any of the stimulus dollars were going to flow down to the local governments. Mr. Schrage stated staff spent time on the Families First Coronovirus Response Act that will be discussed later and stated he did not know how the money would land for the stimulus package. Mayor Hoppock provided information on the potential impact of the stimulus plan to the various states and communities. Commissioner Davis stated he had received an email from the National League of Cities regarding the stimulus plan and the size of communities that may receive funds. Commissioner Hodges provided her thoughts on the impact of sales tax and asked if there was a figure in mind to budget to at this time for the general fund expenditures. Ms. Pack stated the original budget for the general fund expenditures was $43.9 million dollars. Commissioner Hodges asked what the reduction would need to look like. Ms. Pack stated the reduction would need to be $2.8 million dollars for a total of $41.1 million dollars. Commissioner Hodges asked if staff could provide a list of contracts and projects that staff was looking to postpone or hold. Mr. Schrage stated if there was a general consensus from the Governing Body, staff could put together the list. Page2 l l l Commissioner Hodges provided her thoughts on the reducing discretionary expenditures. Mr. Schrage stated the conversation had been on the effects to the employees of the organization to now the budgetary ramifications. Commissioner Ryan provided his thoughts on the possible financial ramifications and the need to provide staff with the tools needed and would like to further discuss the river festival and the baseball project. Commissioner Davis provided information regarding the impact of the COVID-19 on the community and the need to look at the sales tax and transient guest tax. He continued to state he was in favor of the discretionary spending, capital improvements and contracts and bids awarded but not yet commenced but was only in favor of projects and services currently underway but not completed. Mayor Hoppock stated the Governing Body needed a list of the capital improvements and contracts to look at. A conversation ensued between the City Commission, Mr. Schrage and Ms. Pack regarding the information to be provided to the Governing Body. Commissioner Hodges asked if the surplus money for dues paid would be transferred to the general fund. Ms. Pack stated there was a set amount that would be transferred into the general fund. Commissioner Hodges asked if staff could provide a list of those transfers. Ms. Pack stated yes. Commissioner Hodges asked if two (2) payments were made for the STAR Bonds. Ms. Pack stated yes, April and December each year. Commissioner Hodges asked if there was enough money to pay for the April and December payments for 2020. Ms. Pack stated yes and explained where the money comes from. Commissioner Ryan asked if there was a way to shift the money out of the street spending. Ms. Pack stated that staff had reviewed the projects dedicated for the street fund and there was approximately $2 million dollars that could be saved. Commissioner Hodges provided her thoughts on the South Welliield project and asked if the project could be pushed out as far as we could. Mr. Schrage stated that staff had revisited contracts and the river festival and staff would need time to compile the list and bring it back to the City Commission. Commissioner Ryan stated the South Wellfield was paid for from user fees, correct. Mr. Schrage stated yes. Commissioner Ryan provided his thoughts on the projects utilizing user fees. Mayor Hoppock asked if we could go through the list, starting at the bottom of page 2. Mr. Schrage stated that staff didn't want to complete all of the work but wanted direction from the Governing Body. Commissioner Ryan stated that some of the discretion could fall on the City Manager to make the decisions since he would know best. Mayor Hoppock stated he did not think that it should be laid on the City Manager. Commissioner Davis asked if we planned a meeting next week. Mr. Schrage stated that he was going to ask about holding a meeting next week. A conversation ensued between the City Commission and Mr. Schrage regarding a meeting Page3 l l l z 11. w • ~ I 1 next week and budgetary discussions. Commissioner Hodges asked if each director had the discretion to spend up to $20,000. Mr. Schrage stated that the directors did have the authority based on his authority. Commissioner Hodges stated the potential need to limit the spending of the directors and have it reviewed by the City Manager or someone else. She continued to state she was willing to meet more often if necessary. Mr. Schrage stated that generally spending authority was broadened and not limited in situations like this. He continued to state public safety expenditures, water and sewer, and computer technology. Commissioner Ryan asked if an expansion of spending authority would be beneficial for the City Manager. Mr. Schrage stated there was an added agenda item that he could cover later in the meeting. Mr. Schrage stated that staff could provide a higher level of detail on discretionary spending and no new contracts and no new expenditures. Mayor Hoppock stated we would first talk about the cancellation of the 2020 River Festival. Brad Anderson, Director of Arts & Humanities, provided information on the recommendation of the cancellation of the Smoky Hill River Festival. Commissioner Ryan wanted to say he was sorry and stated he did not disagree with his decision and asked if some type of event could happen in the park or a fallback if there was an opportunity to do so. Mr. Anderson stated if time and resources would allow for some type of event at a later time when people were allowed to gather, the Arts and Humanities staff would be ready. Commissioner Hodges thanked Mr. Anderson for his hard work and making the recommendation on behalf of the citizens. Mr. Schrage thanked Mr. Anderson for his leadership. Mayor Hoppock also thanked Mr. Anderson for his leadership. 20-0088 Moved by Commissioner Davis, seconded by Commissioner Hodges, to accept the Arts & Humanities Commission recommendation to cancel the 2020 Smoky Hill River Festival. Aye: (5). Nay: (0). Motion carried. Mr. Schrage provided information regarding the baseball and softball project and the use of transient guest tax funds for the project. Commissioner Davis provided his thoughts on the postponement of the project Commissioner Hodges asked if the transient guest tax receipts are received two (2) months in arrears like sales tax. Ms. Pack stated that information was received quarterly so we would not know that information until about July. Commissioner Hodges provided her thoughts on the project and thought a 6 month postponement timeframe was best. Commissioner Ryan provided his thoughts on the postponement timeframe of the project. Commissioner Franz stated he would see the postponement timeframe of the project as 90 days. Mayor Hoppock stated he was thinking about a 90 day postponement timeframe. Page4 L l 20-0090 Moved by Commissioner Franz, seconded by Commissioner Davis, to postpone further consideration of the East Crawford Recreation Area and Bill Burke Baseball & Softball Improvements Project for 90 days at which time we would reevaluate how to proceed. Aye: (5). Nay: (0). Motion carried. Mr. Schrage stated that he did not have much information that he could additionally provide on the River Renewal Project, other than it was currently in the design phase. Commissioner Davis asked at what time a decision need to be made on the project. Ms. Pack stated there was still final design to occur on the project in later 2020. r Mayor Hoppock asked if there was still funding from the Corp of Engineers. Mr. Schrage stated that it was a core piece of the project and there would need to be conversations regarding the project and he did not have a good timeframe to give the Governing Body. Ms. Pack stated the portion of the Corp of Engineers work was late in the project process sometime next year. Commissioner Ryan asked if postponing our design would postpone the Corp of Engineers portion. Ms. Pack stated from her understanding our design portion was separate from the Corp of Engineers portion of the project. Jane Anderson, Salina, stated the Corp of Engineers would not make a decision until January 2021 and provided her thoughts on the project status and potential postponement. Moved by Commissioner Hodges, seconded by Commissioner Franz, to postpone new commitments or expenses associated with the River Renewal Project for a period of 90 days, while maintaining or support for the project going forward. Commissioner Davis stated he would like to keep the item on the same schedule as the baseball project. Mr. Schrage stated that if the project was put out to December, staff may be visiting it sooner. He stated the postponement could be for 90 days and may have to be postpone again in the future. Mayor Hoppock called the question. Aye: (5). Nay: (0). Motion carried. Mr. Schrage provided an update on the proposed wastewater treatment plant upgrades. Commissioner Hodges asked when the improvements needs to be completed. Mr. Schrage stated the improvements would need to be completed within the 5 year period. He stated that staff recommended a 90 day postponement. Commissioner Hodges stated that this project was a mandatory project and the other projects were discretionary. 20-0091 Moved by Commissioner Ryan, seconded by Commissioner Davis, to postpone new commitments or expenses associated with proposed wastewater treatment plant upgrades for a period of 90 days. Aye: (5). Nay: (0). Motion carried. (7.2) General Obligation Bonds and Temporary Notes. (7.2a) Resolution No. 20-7814 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.2b) First reading Ordinance No. 20-11029 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2020-A. Pages l l 20-0092 l (7.2c) Resolution No. 20-7820 authorizing the offering for public sale of General Obligation Refunding Bonds. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Michael Schrage, City Manager, stated that existing commitments were projects that contracts were executed, work had been completed and payment needed to be made. David Arteberry, Stifel Financial Group, provided an update on the bond market. Mayor Hoppock asked what the contingencies were. Mr. Arteberry stated it could be possible to renew the temporary notes and stated he had been in contact with the bank that currently held the notes that would be willing to renew the notes or find a bank within the state that would be willing to take on the renewal of the notes. Commissioner Hodges asked if there had been any bond sales across the State that would show the type of scenario we were facing. Mr. Arteberry stated the City of Shawnee, Kansas sold a bond issue on Monday for $4.9 million dollars and received three (3) bids with an interest rate of 2.5%. Commissioner Hodges asked if there was a bond rating call this week. Mr. Schrage stated there was a prep call but the bond rating call was scheduled for tomorrow. Commissioner Hodges asked for the status of the special assessment projects. Ms. Pack stated one development was to construct yet this year and the other one would be early next year. She also stated the City of Salina had made a commitment to the developer through the development agreement to reimburse the expenses. Mr. Schrage stated that staff had a conversation with bond counsel regarding the developments but had not had the conversation with the developers yet but plan to do so before we go to market. Mayor Hoppock stated those would not be an obligation of the City of Salina but only if the developer would default they would be an obligation of the City of Salina. Mr. Schrage stated that was correct. Commissioner Franz mentioned the Ninth Street Bridge under existing commitments and new funding and asked if the existing commitment was for design and if the decision was to not proceed, there would be a design available to proceed in the future. Ms. Pack stated that was correct, the department anticipated bidding the project in the fall of 2020 so the delay would not impact the project from its original intent Commissioner Franz stated the resource for the Police Training Center funding was sales tax and asked if that was a commitment to utilize those funds. Ms. Pack stated that the source of debt payment was not listed on the resolutions or ordinances but was a decision of the City of Salina. Commissioner Hodges provided her thoughts on the special assessment developments. Mr. Schrage stated that staff was committed to having those conversations with the developers. Moved by Commissioner Davis, seconded by Commissioner Franz, to adopt Resolution No. 20- 7814 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds in a maximum amount of $7,335,165 with issuance costs. Aye: (4). Nay: (1) Hodges. Motion carried. Ms. Pack provided information related to the bond issuance. Mr. Arteberry noted the maximum cost for the temporary notes and potential need to amend the motion. Page6 l l 20-0094 l Commissioner Davis asked if the yearly cost was higher than the temporary note due to the 5 year term for the landfill cell. Ms. Pack stated yes. Mr. Schrage stated staff was trying to sync the project with the life of the cell. Moved by Commissioner Hodges, seconded by Commissioner Davis, to pass Ordinance No. 20- 11029 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2020-A on first reading. Aye: (5). Nay: (0). Motion carried. Ms. Pack stated that staffs recommendation was to not act on that item and if the City Commission was in agreement, no motion was necessary. The City Commission recessed at 6:45 p.m. for a 5 minute break. The meeting resumed at 6:54p.m. (7.3) Award contract for the abatement (removal) of nuisances related to property maintenance for properties within the city limits of Salina for a period of April 1, 2020 through March 31, 2021. Lauren Driscoll, Director of Community & Development Services, explained the nuisance abatement process, bids received, fiscal impact and action options. Michael Schrage, City Manager, provided information regarding the option to award the contract to other contracts but the low bid. Commissioner Davis asked if United Field Services offered a plan on how they would be responsive to providing the service from over 100 miles away and how they would be providing the equipment needed. Ms. Driscoll stated United Field Services was not very responsive in responding to questions asked by staff. She continued to state that staff had contacted references of the company. Mayor Hoppock stated the costs would not necessarily be costs of the City of Salina but would be added to the property taxes of the property owner affected. Commissioner Franz stated he was concerned about the equipment availability and if sub- contractors could sub the work out to another contractor. Ms. Driscoll stated staff recommended Loux Home Repair and staff would amend the bid document to ask more questions to obtain the information necessary. Commissioner Franz asked if the typical cost for an abatement was $125.00 Ms. Driscoll stated yes for an average lot. Mr. Schrage stated there was an administrative fee on top of it as well. Commissioner Davis asked if the cost was recouped from the property owners and how much was recouped. Ms. Driscoll stated that she did not have that information available but could provide it. Mayor Hoppock stated the abatement costs were recouped at some point. Moved by Commissioner Hodges, seconded by Commissioner Ryan, to award the nuisance abatement contract to Loux Home Repair for the amounts indicated in the bid tabulation summary and the contract documents for the period of April 1, 2020 through March 31, 2021, and authorize the Mayor to sign the contract for services. Aye: (5). Nay: (0). Motion carried. (7.4) Resolution No. 20-7822 authorizing temporary COVID-19 related Personnel Manual Updates. Page7 l l l "' "' Michael Schrage, City Manager, explained the Families First Coronavirus Response Act, guidance from Department of Labor, temporary amendments, fiscal impact and action options. Commissioner Davis stated other than emergency sick leave, most of the leave would be full pay as long as the employees were using hours they already accrued. Mr. Schrage stated yes, if the employee was eligible to use City of Salina accrued leave at their hourly rate, whatever amount was used would be paid in full. Commissioner Davis asked if the employee would need to ask for the extended leave before their accrued leave was used. Mr. Schrage stated that an employee could request extended leave to cover the remaining hours to earn a full paycheck. Commissioner Davis asked if employees that were on call received pay. Natalie Fischer, Director of Human Resources, stated there were very few employees that were on an on- call basis. She continued to explain the variations of staff working after hours. Mayor Hoppock asked how leave was calculated for the Fire Department that worked different shifts. Ms. Fischer stated that staff would need to look at how the leave would be handled for the Fire Department based on the direction the City Commission would like to go. Ms. Fischer provided additional information on the act and the guidelines of the act. Mayor Hoppock asked if an employee would understand this. Ms. Fischer stated probably not. Mr. Schrage stated that he had noticed some administrators that told employees that they would get paid regardless. He noted that he had not done that yet. He continued to state that his hope was to communicate to them that the act was in place and will work with the employees on the provisions. Mayor Hoppock asked if some employees have had impacts with child care with school closing. Ms. Fischer stated that about 15 employees at most were impacted last week and there could be a potential that number may increase. Commissioner Hodges asked about the level of leave available to the employees. Mr. Schrage stated that we had to offset the 2/3 provision by allowing additional leave at the full rate to come to a full paycheck. A conversation ensued between the City Commission and Mr. Schrage regarding the extended leave. Commissioner Hodges stated that the municipality was not expecting repayment for the use of hours under the act. Mr. Schrage stated correct and the amount was capped at the dollar amount that the act provided. Commissioner Hodges asked if we were going to pay the employees for the hours the employee would work anyway, then why can't we take the other step and just pay the employee for the full time. Mr. Schrage stated there were so many instances that an employee would need to elect what they would like to do. A conversation ensued between the City Commission, Mr. Schrage, Greg Bengtson, City Attorney, and Ms. Fischer regarding the leave advancement and compliance of the act. Commissioner Davis asked if companies under 500 employees were captured under this. Mr. Schrage stated companies in excess of 500 employees were not covered. Mr. Schrage stated the act created additional banks of leave that we do not have in the system that we Page8 l I l 20-0095 l are obligated to provide to the employee. Commissioner Davis asked what type of credit the City would receive. Mr. Bengtson stated it was a credit against payroll tax. Commissioner Franz provided a scenario on the various leaves available. A conversation ensued between Commissioner Franz, Ms. Fischer and Mr. Schrage regarding the scenarios of leave. Commissioner Franz asked why $200 a day was $25 per hour, and $300 a day was $37.50 per hour. Mr. Schrage stated an employee would be limited to $200 a day. Commissioner Franz asked if the Emergency Family Medical Leave was handled similar to Family Medical Leave Act. Mr. Schrage stated the Emergency Family Medical Leave was an extension of paid leave. Mayor Hoppock asked if staff would be able to account for this. Ms. Fischer stated staff was looking at other software systems to track leave forms and processing the leave. Commissioner Hodges asked if there had been a thought to allow for work from home or flexible schedule directives. Mr. Schrage stated there had been conversatiqns but his concern was essential versus non-essential and if a stay-in place order was put in place. He continued to state that staff had to stay focused on if it was essential or needed right now. Ms. Fischer stated work for department heads was to determine what work could be offered to employees that did not have the needs to work from home. Commissioner Davis asked if those individuals were ones who had children that were home to take care of and would generally be in school and would be working their full schedule. Mr. Schrage stated correct but what he was referring to were people that were on emergency paid sick leave because of the stay-at-home order. Commissioner Davis asked what the reduced leave would be to where an employee could still get their benefits. Ms. Fischer stated the City had been pretty liberal in the past for employees that were on leave to receive benefits. She continued to state the personnel manual stated a full time employee was 40 hours a week and a classified part-time employee was 25 to 30 hours a week. Commissioner Hodges asked if the leave would cover both essential and non-essential personnel. Ms. Schrage stated yes. Mr. Schrage continued to provide information on the use of leave for a non-essential employee. A conversation ensued between the City Commission and Mr. Schrage regarding the components of the resolution. Mr. Bengtson stated in Section 1 of the resolution, possibly adding "or the equivalent for employees who work other than the 40 hours per week work schedule" after 110 hours. A conversation ensued between the City Commission, Mr. Schrage, Mr. Bengtson, and Ms. Fischer regarding the language to add to the resolution. Moved by Commissioner Hodges, seconded by Commissioner Davis, to adopt Resolution No. 20- 7822 addressing personnel measures in response to the COVID-19 Public Health Emergency adding under Section 1 -CM authorized to grant up to 110 hours or the equivalent for employees who work other than 40 hours per week work schedule. Page9 l l l Mr. Bengtson stated the need to make a few non-substantive changes to the resolution in Sections 9-12. Mayor Hoppock called the question. Aye: (5). Nay: (0). Motion carried. (7.5) Follow-up discussion and explanation for the change in the Downtown Streetscape Project related to the License Agreement for sidewalk dining with Lighthouse Properties ill, Inc. at Starbucks on the corner of Mulberry and Santa Fe approved by the City Commission on March 9, 2020. Jim Kowach, Director of Public Works, explained the streetscape project, project plans, location of flower bed, impact to sidewalk dining area, fiscal impact, and action options. Michael Schrage, City Manager, provided information on the size of contingency on a $11 million dollar project, the decision by staff, and the work performed by staff. Commissioner Davis stated it was a non-issue for him. Commissioner Hodges stated she noticed a pattern of behavior where commissioners asked questions and asked if the hotel was going to be able to open on April 1, 2020 and if another extension was needed. Mr. Schrage stated he did not think they would be open by April 1 but would be within the 90 day window. Commissioner Franz noted his original question on March 9th but noted that a picture was submitted to him had part of the planter box missing so he questioned it He also stated that just because a question was asked did not mean that a staff person had to have an answer. Mr. Kowach wanted to thank Commissioner Franz for noticing it and notifying staff and it minimized the additional cost that would have occurred if staff was not notified. Mayor Hoppock provided his thoughts on the request. Mr. Schrage thanked the Governing Body and acknowledged that staff tried their best to be light on their feet to respond to questions asked. Mr. Kowach apologized to the Governing Body and City Manager. 20-0096 Moved by Commissioner Ryan, seconded by Commissioner Franz, to approve use of project funds to pay for the additional $1,000.00 for relocation of the planter in conflict with the sidewalk dining request and license agreement granted 3/9/2020. Aye: (5). Nay: (0). Motion carried. (7.6) Resolution No. 20-7823 granting additional temporary authority to the City Manager related to COVID-19 response. Michael Schrage, City Manager, explained the request, temporary authority, and action options. Mayor Hoppock asked if there was a requirement for the citizen's boards and committees to meet. Mr. Schrage stated that he could touch on that under the next agenda item. Commissioner Davis asked if there was a limit to the City Manager's emergency spending authority. Mr. Schrage stated it would truly need to be an emergency that was imminent and if he could bring it to the Governing Body he preferred to do so. Commissioner Franz stated that he did not think there was a spending limit for the Page 10 L L l z IL w l! i 20-ocil7 8 emergency spending. Commissioner Franz asked if the golf course was open. Mr. Schrage stated on a limited schedule. Commissioner Franz asked what Tony's Pizza Events Center operations were. Mr. Schrage stated they were following the CDC guidelines and had cancelled most events or were working on rescheduling those. Mr. Schrage provided information on the necessity to close the recycling center. Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 20- 7823 temporarily expanding the authority of the City Manager to act on behalf of the City in response to the COVID-19 emergency, and ratifying previous decisions regarding the COVID-19 Emergency. Aye: (5). Nay: (0). Motion carried. (7.7) Resolution No. 20-7784 cancelling meetings of certain City of Salina, Kansas subordinate boards, committees, and commissions in response to the COVID-19 Public Health Emergency and the Governor's Executive Order No. 20-14. Michael Schrage, City Manager, explained the request for a temporary suspension of meetings, and action options. Commissioner Ryan asked if the Board of Zoning Appeals had an item that had no other option but to go to district court, could the board meet. Mr. Schrage stated he would use discretion based on the information available. Greg Bengtson, City Attorney, stated part of the structure of the resolution was based upon direction of the Governor's Executive Order pertaining to the timeframe the resolution was in effect. Commissioner Hodges thanked staff for keeping an eye on the judicial boards and the applications submitted. 20-0098 Moved by Commissioner Ryan, seconded by Commissioner Davis, to adopting Resolution No. 20- 7784 cancelling meetings of certain City of Salina, Kansas subordinate boards, committees, and commissions in response to the COVID-19 Public Health Emergency and the Governor's Executive Order No. 20-14. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OmER BUSINESS Commissioner Davis noted that Robby's Cheesecake was still open and through all of this, he was still giving out free lunch sacks to citizens. He also encouraged citizens to help others. Commissioner Ryan asked if legal counsel was still working on a lease for the Expo Center. Michael Schrage, City Manager, stated that he had pulled the City Attorney in a lot of directions lately. Greg Bengtson, City Attorney, stated he had a conversation with Mr. Schrage providing additional information and he was hoping that would be back to the top of his list tomorrow .. ADJOURNMENT Page 11 l l "' "' f w Moved by Commissioner Ryan, seconded by Commissioner Davis, that the special meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 9:27 p.m. [SEAL] ATTEST: ~lO~ Shandi Wicks, CMC, City Clerk Page 12 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON APRIL 13, 2020 The governing body met in regular session at the usual meeting place in the City, at 2:30 p.m., the following members being present and participating, to-wit: Present: Mike Hoppock, Mayor; Melissa Rose Hodges, Vice Mayor; Trent W. Davis, M.D., Commissioner; Rod Franz, Commissioner; and Karl Ryan, Commissioner. Absent: None. The Mayor declared that a quorum was present and called the meeting to order. * * * * * * * * * * * * * * (Other Proceedings) The Finance Director reported that pursuant to the Notice of Sale duly given, bids for the purchase of General Obligation Internal Improvement Bonds, Series 2020-A, dated April 29, 2020, of the City were received on April 13, 2020. A tabulation of said bids is set forth as EXHIBIT A hereto. The Finance Director reported that staff determined that the bid of Robert W. Baird & Co., Inc., Red Bank, New Jersey, was the best bid for the Bonds, a copy of which is attached hereto as EXHIBIT B. Thereupon, there was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2020- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Thereupon, Commissioner Franz moved that said Ordinance be passed. The motion was seconded by Commissioner Ryan. Said Ordinance, having been approved by a first reading on March 25, 2020, was duly read and considered, and upon being put, the motion for the passage of said Ordinance was carried by the vote of the governing body, the vote being as follows: Aye: Mike Hoppock, Mayor; Melissa Rose Hodges, Vice Mayor; Trent W. Davis, M.D., Commissioner; Rod Franz, Commissioner; and Karl Ryan, Commissioner. Nay: None. Thereupon, the Mayor declared said Ordinance duly passed and the Ordinance was then duly numbered Ordinance No. 20-11029 was signed and approved by the Mayor and attested by the Clerk and the Ordinance or a summary thereof was directed to be published one time in the official newspaper of the City. Thereupon, there was presented a Resolution entitled: A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2020-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 20-11029 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. Thereupon, Commissioner Franz moved that said Resolution be adopted. The motion was seconded by Commissioner Davis. Said Resolution was duly read and considered, and upon being put, the motion for the adoption of said Resolution was carried by the vote of the governing body, the vote being as follows: Aye: Mike Hoppock, Mayor; Melissa Rose Hodges, Vice Mayor; Trent W. Davis, M.D., Commissioner; Rod Franz, Commissioner; and Karl Ryan, Commissioner. Nay: None. Thereupon, the Mayor declared said Resolution duly adopted and the Resolution was then duly numbered Resolution No. 20-7816 and was signed by the Mayor and attested by the Clerk. * * * * * * * * * * * * * * (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 On motion duly made, seconded and carried, the meeting thereupon adjourned. CERTIFICATE I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the proceedings of the governing body of the City of Salina, Kansas, held on the date stated therein, and that the official minutes of such proceedings are on file in my office. Shandi Wicks, CMC, City Clerk (S (Signature Page to Excerpt of Minutes -2020-A) EXHIBIT A BID TABULATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A A-1 PARITY Result Screen 14:15:41 p.m. COST Upcoming Calendar Overview Compare Summary Bid Results Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A The following bids were submitted using PARt"f'IS> and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D Robert W. Baird & Co., Inc. 1.928931 D The Baker Grou12 1.941859 D FHN Financial Caoital Markets 1.970178 D KeyBanc Ca12ital Markets 2.171547 Page l of I *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. © 1981-2002 i-Deal LLC, All rights reserved, Trademarks https ://www .newissuehome. i-deal .com/Parity I asp/main.asp ?frame=content&page=parity R... 411 612020 PARITY Compare Page l of I Result Excel Bids Comparison Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A Robert W. Baird & Co., Inc. -Red The Baker Grouo -Oklahoma FHN Financial Caoital Markets -New I Bank, NJ Citv OK York NY Maturity Amount Coupon Maturity Amount Coupon Maturity Amount Coupon 10/01/2021 520M 3.0000 10/01/2021 520M 3.5000 10/01/2021 520M 3.0000 10/01/2022 600M 3.0000 10/01/2022 600M 3.5000 10/01/2022 600M 3.0000 10/01/2023 615M 3.0000 10/01/2023 615M 3.5000 10/01/2023 615M 3.0000 10/01/2024 630M 3.0000 10/01/2024 630M 3.5000 10/01/2024 630M 3.0000 10/01/2025 645M 3.0000 10/01/2025 645M 3.5000 10/01/2025 645M 3.5000 10/01/2026 205M 3.0000 10/01/2026 205M 3.5000 10/01/2026 205M 3.5000 10/01/2027 215M 3.0000 10/01/2027 215M 3.5000 10/01/2027 215M 3.5000 10/01/2028 225M 3.0000 10/01/2028 10/01/2028 225M 3.0000 10/01/2029 10/01/2029 455M 2.0000 10/01/2029 230M 3.0000 10/01/2030 465M 2.0000 10/01/2030 10/01/2030 235M 3.0000 10/01/2031 210M 2.0000 10/01/2031 445M 2.0000 10/01/2031 210M 3.0000 10/01/2032 220M 2.1250 10/01/2032 10/01/2032 220M 3.0000 10/01/2033 225M 2.2500 10/01/2033 445M 2.0000 10/01/2033 225M 3.0000 10/01/2034 235M 2.3750 10/01/2034 10/01/2034 235M 3.0000 10/01/2035 240M 2.5000 10/01/2035 475M 3.0000 10/01/2035 240M 3.0000 Purchase Price$5,454,775.70 Purchase Price$5,521 ,936.67 Purchase Price$5,609,521.70 KeyBanc Ca12ital Markets -I Cleveland, OH Maturity Amount Coupon 10/01/2021 520M 3.0000 10/01/2022 600M 3.0000 10/01/2023 615M 3.0000 10/01/2024 630M 3.0000 10/01/2025 645M 3.0000 10/01/2026 205M 3.0000 10/01/2027 215M 3.0000 10/01/2028 225M 3.0000 10/01/2029 230M 3.0000 10/01/2030 235M 2.0000 10/01/2031 210M 2.0000 10/01/2032 220M 2.1250 10/01/2033 225M 2.2500 10/01/2034 235M 2.3750 10/01/2035 240M 2.5000 Purchase Price$5,395,322.00 © 1981-2002 i-Deal LLC. All rights reserved. Trademarks https ://www .newissuehome. i-deal .com/Parity I asp/main .asp ?frame=content&page=parityC... 4/ 16/2020 EXHIBITB BID OF PURCHASER B-1 ®Deal· MunllC [Upcoming Calendar I Overview l Result J ~] Robert W. Baird & Co., Inc.· Red Bank, NJ's Bid Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A For the aggregate principal amount of $5,250,000.00, we wilt pay you S5.45'4.775.70, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at lbe-.falllillli' *'~~ ....... ---=-----. Changed pursuant to attached schedule Total Interest Cost $900,997.92 Premium: $204,775.70 Net lnteteSt Cost: $696,222.22 TIC: 1.928931 Total Insurance Premium: $0.00 Time Last Bid Received On:04/131202012:42:29 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the OlflCial Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Robert W. Baird & Co.1'1~-· Red Bank, NJ C~ntact: C!'artenl a11aro ~\\.\ "\ ""l~ Title: ~ ~ .\>. Telephone:732-576-4410 Fax: 732-576-4420 Issuer Name: City of Salina Accepted By: Date: April7,2020 General Obligation Internal Improvement Bonds Series 2020-A Pricing Summary Maturity Type of Bond Coupon 10/01/2021 Serial Coupon 10/0112022 Sena! Coupon 10/0112023 Serial Coupon I 0/0112024 Serial Coupon 10/0 l/2025 Serial Coupon I 0/0112026 Serial Coupon 10/01/2027 Serial Coupon 10/0112028 Senal Coupon 10/0112030 Term I Coupon I 0/0112031 Serial Coupon 10/0112032 Serial Coupon 10/0112033 Serial Coupon I 0/0112034 Serial Coupon 10/01/2035 Serial Coupon Total Bid Information Par Amount of Bonds Reoffering Premium or (Discount) Gross Production Total Underwnter's Discount (0.747%) Bid (103.871%) Total Purchase Price Bond Year Dollars Average Life Average Coupon Net Interest Cost (NIC) True Interest Cost (TIC) 3.000% 3.000% 3.000% 3.000% 3.000% 3.000% 3.000% 3.000% 2.000% 2.000% 2.125% 2.250% 2.375% 2.500% Yield 1.050% 1.050% 1.150% 1.200% 1.300% 1.400% 1.500% 1.650% 2.000% 2.100% 2.200% 2.300% 2.400% 2.500% 2020-A (Final) by Project I Issue Summary I 4/13/2020 I 2.28 PM Maturity Value 495,000.00 580,000.00 595,000.00 610,000.00 630,000.00 215,000.00 225,000.00 230,000.00 480,000.00 220,000.00 225,000.00 230,000.00 235,000.00 240,000.00 $5,210,000.00 Price 102.745% 104.651% 106.190% 107.729% 108.871% 109.793% 110.498% 109.393% c 100.000% 98.988% 99.187% 99.424% 99.695% 100.000% YTM Call Date Call Price Dollar Price I.793% 10/0112027 100.000% 508,587.75 606,975.80 631,830.50 657,146.90 685,887.30 236,054.95 248,620.50 251,603.90 480,000.00 217,773.60 223,170.75 228,675.20 234,283.25 240,000.00 $5,450,610.40 $5,210,000.00 240,610.40 $5,450,610.40 $(38,938.55) 5,411,671.85 $5,411,671.85 $35,499.78 6.814 Years 2.5489994% 1.9809061% 1.9351536% ------------------------------------ Stifel Public Finance (CA1 Page 3 ORDINANCE NO. 20-11029 OF THE CITY OF SALINA, KANSAS PASSED APRIL 13, 2020 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A ORDINANCE NO. 20-11029 AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2020- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the City and Article 12, Section 5 of the Constitution of the State of Kansas, and other provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the City Commission of the City (the "Governing Body") has authorized the following improvements (the "Improvements") to be made in the City, to-wit: Allocable Ordinance/ Principal Pro_ject Description Resolution No. Authority Amount of Bonds Landfill Cell #20 Res. 19-7672 K.S.A. 12-2101 et seq. $1,950,000.00 Smoky Hill River Article 12, §5 ofthe Ord. 17-10885 Constitution of the State of 2,395,000.00 Renewal Kansas Police Parking Res. 19-7679 K.S.A. 12-1736 et seq. 260,000.00 Golf Irrigation Res. 19-7678 Charter Ordinance No. 39 500,000.00 North 9th Street Bridge Ord. 02-10071; Res K.S.A. 12-685 et seq. 105,000.00 No. 19-7677 Total: $5,210,000.00 ; and WHEREAS, the Governing Body is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the Governing Body has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation bonds. "Bond Resolution" means the resolution to be adopted by the Governing Body prescribing the terms and details of the Bonds and making covenants with respect thereto. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2020-A, dated April 29, 2020, authorized by this Ordinance. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the City or, in the Clerk's absence, the duly appointed Deputy or Acting Clerk. "Finance Director" means the duly appointed and/or elected Finance Director or, in the Finance Director's absence, the duly appointed Deputy Finance Director or Acting Finance Director of the Issuer. "Improvements" means the improvements referred to in the preamble to this Ordinance and any Substitute Improvements. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "Refunded Notes" means a portion of the Series 2019-1 Notes maturing on May 1, 2020. "Series 2019-1 Notes" means the City's General Obligation Temporary Notes, Series 2019-1, dated April 24, 2019, in the aggregate principal amount of $6,085,000. "State" means the State of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City authorized in the manner set forth in the Bond Resolution. Section 2. Authorization of the Bonds. There shall be issued and hereby are authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series 2020-A, of the City in the principal amount of$5,210,000 for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) pay the costs of issuance of the Bonds; and ( c) retire a portion of the Refunded Notes. Section 3. Security for the Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. 2 The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 4. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed and subject to the provisions, covenants and agreements set forth in the Bond Resolution hereafter adopted by the Governing Body. Section 5. Levy and Collection of Annual Tax. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by levying and collecting the necessary taxes upon all of the taxable tangible property within the City in the manner provided by law. The taxes above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the general ad valorem taxes of the City are levied and collected, shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due and the fees and expenses of the paying agent for the Bonds. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund. If at any time said taxes are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the City and to reimburse said general funds for money so expended when said taxes are collected. Section 6. Further Authority. The Mayor, Finance Director, Clerk and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 7. Governing Law. This Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 8. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Governing Body, approval by the Mayor and publication of the Ordinance (or a summary thereof) in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 PASSED by the Governing Body on April 13, 2020 and APPROVED AND SIGNED by the Mayor. _.cCSSS:S:S::~ Shandi Wicks, CMC, City Clerk (Signature Page to Bond Ordinance) Published in the Salina Journal Publisher's Affidavit April 20,2020) PUBLICATION SUMMARY OF ORDINANCE NO.20-11029, PASSED BY THE GOVERNING BODY OF THE CITY OF SALINA, I, Christy Fink being duly sworn KANSASON THE 13th DAY OF APRIL,2020 declare that I am a i.egl Coordinator SUMMARY On April 13,2020,the Governing of THE SALINA JOURNAL, a daily newspaper Body ofthe City of Salina,Kansas,adopted Ordinance No.20-11029, Kansas, and ofpublishedatSalina, Saline County, authorizing and providing for theissuanceofGeneralObligation Internal Improvement Bonds, general circulation in said county, which newspaper series 2020-A, of the City of Salina, Kansas. The purpose of has been admitted to the mails as second class matter in the issuance of the bonds is to provide funds to finance certain public improvements in the City said county, and continuously and uninterruptedly and refund a portion of certain outstanding general obligation published for five consecutive years prior to first notes.In addition,the Ordinance provides for security of the bonds, publication of attached notice,and that the terms,and details and conditions for the issuance of the bonds. Such bonds constitute general Ordinance 20-11029 Notice has obligations of the City payable as tobothprincipal and interest,to the been correctly published in the entire issue of said attent nec cessaryh may br myadvallorem oneeranews time,publication being given in the issue limitation as to rate or amount newspaper upon all the taxable tangible 2020 property, real and person,within of April 20, the territorial limits of the City.The complete text of this ordinance may be obtained or viewed free 1.. of charge at the office of the City. Clerk,300 WestAsh Street,Salina, Kansas,or on the City's official Subscribed and sworn to before me,this Z/ 54 website address, www.salina-ks. go,where a reproduction of the original ordinance will be available for a minimum of one week dayof C' ' A.D. 20 ••- following this summary publication.1t CVL9'Notary Public Printer's Fee$93.00 NOTARY PUBLIC-State of Kansas WENDY CHROB—Zo My A t Expo. Q. ---PP PUBLICATION SUMMARY OF ORDINANCE NO. 20-11029, PASSED BY THE GOVERN! G BODY OF THE CITY OF SAUNA, KANSAS ON THE 13th DAY OF APRIL, 2020 SUMMARY On April 13, 2020, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. 20-11029 authorizing and providing for the issuance of General Obligation Internal Improvement Bonds, Series 2020- A, of the City of Salina, Kansas. The purpose of the issuance of the bonds is to provide funds to finance certain public improvements in the City and refund a portion of certain outstanding general obligation notes. In addition, the Ordinance provides for security of the bonds, terms, and details and conditions for the issuance of the bonds. Such bonds constitute general obligations of the City payable as to both principal and interest, to the extent necessary, from ad valorem ta-:es which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and person, within the territorial limits of the City. The complete text of this ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's official website address, www.salina-ks.gov, where a reproduction of the original ordinance will be available for a minimum of one week following this summary publication. This s 1mary is certified this /~ay of April, 2020. Publish one time and return one Proof of Publication to the City Clerk and one to the City Attorney. RESOLUTION NO. 20-7816 OF THE CITY OF SALINA, KANSAS ADOPTED APRIL 13, 2020 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Section 101. Section 201. Section 202. Section 203. Section 204. Section 205. Section 206. Section 207. Section 208. Section 209. Section 210. Section 211. Section 212. Section 213. Section 301. Section 302. Section 303. Section 401. Section 402. Section 501. Section 502. Section 503. Section 504. Section 505. Section 506. Section 507. Section 601. TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................ 1 ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Authorization of the Bonds ........................................................................................ 8 Description of the Bonds ............................................................................................. 8 Designation of Paying Agent and Bond Registrar ................................................... 9 Method and Place of Payment of the Bonds ............................................................. 9 Payments Due on Saturdays, Sundays and Holidays ............................................. 10 Registration, Transfer and Exchange of Bonds ..................................................... 10 Execution, Registration, Authentication and Delivery of Bonds .......................... 11 Mutilated, Lost, Stolen or Destroyed Bonds ........................................................... 12 Cancellation and Destruction of Bonds Upon Payment. ....................................... 12 Book-Entry Bonds; Securities Depository .............................................................. 12 Nonpresentment of Bonds ........................................................................................ 13 Preliminary and Final Official Statement... ............................................................ 14 Sale of the Bonds ....................................................................................................... 14 ARTICLE III REDEMPTION OF BONDS Redemption by Issuer ............................................................................................... 14 Selection of Bonds to be Redeemed ......................................................................... 15 Notice and Effect of Call for Redemption ............................................................... 16 ARTICLE IV SECURITY FOR BONDS Security for the Bonds .............................................................................................. 17 Levy and Collection of Annual Tax; Transfer to Debt Service Account. ............ 18 ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Creation of Funds and Accounts ............................................................................. 18 Deposit of Bond Proceeds ......................................................................................... 18 Application of Moneys in the Improvement Fund; Redemption of Refunded Notes ........................................................................................................................... 19 Substitution oflmprovements; Reallocation of Proceeds ..................................... 19 Application of Moneys in Debt Service Account. ................................................... 19 Application of Moneys in the Rebate Fund ............................................................ 20 Deposits and Investment of Moneys ........................................................................ 20 ARTICLE VI DEFAULT AND REMEDIES Remedies .................................................................................................................... 20 Section 602. Section 603. Section 701. Section 801. Section 802. Section 901. Section 902. Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. Limitation on Rights of Owners .............................................................................. 21 Remedies Cumulative ............................................................................................... 21 ARTICLE VII DEFEASANCE Defeasance .................................................................................................................. 21 ARTICLE VIII TAX COVENANTS General Covenants .................................................................................................... 22 Survival of Covenants ............................................................................................... 22 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements .......................................................................................... 22 Failure to Comply with Continuing Disclosure Requirements ............................. 23 ARTICLE X MISCELLANEOUS PROVISIONS Annual Audit. ............................................................................................................ 23 Amendments .............................................................................................................. 23 Notices, Consents and Other Instruments by Owners ........................................... 24 Notices ........................................................................................................................ 25 Electronic Transactions ............................................................................................ 25 Further Authority ..................................................................................................... 25 Severability ................................................................................................................ 25 Governing Law .......................................................................................................... 25 Effective Date ............................................................................................................. 25 EXHIBIT A -FORM OF BONDS ............................................................................................................ A-1 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ii RESOLUTION NO. 20-7816 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2020-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 20-11029 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously passed the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the City Commission of the Issuer (the "Governing Body") to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds; and WHEREAS, the Governing Body hereby finds and determines that it is necessary for the Issuer to authorize the issuance and delivery of the Bonds in the principal amount of$5,210,000 to pay a portion of the costs of the Improvements and refund the Refunded Notes. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who, directly or indirectly has the investment power with respect to such Bonds. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar. "Bond Registrar" means the State Treasurer, and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" or "Bond" means the General Obligation Internal Improvement Bonds, Series 2020-A, authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee ofDTC and any successor nominee ofDTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly appointed Deputy Clerk or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Bonds, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or expenses incurred in obtaining municipal bond insurance on the Bonds. "Dated Date" means April 29, 2020. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2020-A created within the Bond and Interest Fund pursuant to Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers. 2 "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (I) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Undertaking" means the Continuing Disclosure Undertaking dated as of the Issue Date relating to certain obligations contained in the SEC Rule. "DTC" means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed. "DTC Representation Letter" means the Blanket Letter of Representation from the Issuer and the Paying Agent to OTC which provides for a book-entry system, or any agreement between the Issuer and Paying Agent and a successor securities depository duly appointed. "Event of Default" means each of the following occurrences or events: 3 (a) Payment of the principal and of the redemption premium, if any, of any of the Bonds shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b) Payment of any installment of interest on any of the Bonds shall not be made when the same shall become due; or ( c) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution (other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Finance Director" means the duly appointed and/or elected Finance Director or, in the Finance Director's absence, the duly appointed Deputy Finance Director or Acting Finance Director of the Issuer. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the Governing Body to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve month period ending on December 31. "Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501 hereof. "Governing Body" means the City Commission of the Issuer. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2020-A created pursuant to Section 501 hereof. "Improvements" means the improvements referred to in the preamble to the Ordinance and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April 1 and October 1 of each year, commencing April 1, 2021. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. 4 "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "Notice Address" means with respect to the following entities: (a) To the Issuer at: City of Salina, Kansas Attn: City Clerk 300 West Ash Salina, Kansas 67402 (b) To the Paying Agent at: State Treasurer of the State of Kansas Landon Office Building 900 Southwest Jackson, Suite 201 Topeka, Kansas 66612-1235 ( c) To the Purchaser: Robert W. Baird & Co., Inc. 1 Harding Road -Suite 207 Red Bank, New Jersey 07701 (d) To the Rating Agency(ies): Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a) With respect to the Issuer, the Clerk. (b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services. (c) With respect to any Purchaser, the manager of its Municipal Bond Department. 5 (d) With respect to any Rating Agency, any Vice President thereof. "Official Statement" means Issuer's Official Statement relating to the Bonds. "Ordinance" means Ordinance No. 20-11029 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Article VII hereof; and ( c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; ( e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in ( c ); ( f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); G) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. I 0-110 I which are general obligations of the municipality issuing the same; or (1) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f); or (m) other investment obligations authorized by the laws of the State, all as may be further restricted or modified by amendments to applicable State law. 6 "Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Bonds plus accrued interest to the date of delivery, plus a bid premium of$201,671.85. "Purchaser" means Robert W. Baird & Co., Inc., Red Bank, New Jersey, the original purchaser of the Bonds, and any successor and assigns. "Rating Agency" means any company, agency or entity that provides, pursuant to request of the Issuer, financial ratings for the Bonds. "Rebate Fund" means the Rebate Fund for General Obligation Internal Improvement Bonds, Series 2020-A created pursuant to Section 501 hereof. "Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" means, when used with respect to any Bond to be redeemed, the date fixed for the redemption of such Bond pursuant to the terms of this Bond Resolution. "Redemption Price" means, when used with respect to any Bond to be redeemed, the price at which such Bond is to be redeemed pursuant to the terms of this Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Notes" means a portion of the Series 2019-1 Notes maturing on May 1, 2020, in the aggregate principal amount of $6,085,000. "Replacement Bonds" means Bonds issued to the Beneficial Owners of the Bonds in accordance with Article II hereof. "SEC Rule" means Rule l Sc2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. "Securities Depository" means, initially, OTC, and its successors and assigns. "Series 2019-1 Notes" means the Issuer's General Obligation Temporary Notes, Series 2019-1, dated April 24, 2019. "Special Record Date" means the date fixed by the Paying Agent pursuant to Article II hereof for the payment of Defaulted Interest. "Standard & Poor's" or "S&P" means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. 7 "State" means the state of Kansas. "State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Bond Resolution as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Substitute Improvements" means the substitute or additional improvements of the Issuer described in Article V hereof. "Term Bonds" means the Bonds scheduled to mature in the year 2030. "Treasurer" means the duly appointed and/or elected Treasurer of the Issuer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer. ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Section 201. Authorization of the Bonds. The Bonds have been previously authorized and directed to be issued pursuant to the Ordinance in the principal amount of $5,210,000, for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; (b) retire a portion of the Refunded Notes; and (c) pay Costs oflssuance. Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in an Authorized Denomination, and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturities, subject to redemption and payment prior to their Stated Maturities as provided in Article III hereof, and shall bear interest at the rates per annum as follows: 8 Stated Maturity October 1 2021 2022 2023 2024 2025 2026 2027 SERIAL BONDS Principal Annual Rate Stated Maturity Principal Amount of Interest October 1 Amount $495,000 3.000% 2028 230,000 580,000 3.000% 2031 220,000 595,000 3.000% 2032 225,000 610,000 3.000% 2033 230,000 630,000 3.000% 2034 235,000 215,000 3.000% 2035 240,000 225,000 3.000% TERM BONDS Stated Maturity October 1 2030 Principal Amount $480,000 Annual Rate of Interest 2.000% Annual Rate of Interest 3.000% 2.000% 2.125% 2.250% 2.375% 2.500% The Bonds shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204 hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 ( 1983 ), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar. Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. 9 The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than l 0 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefore to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than l 0 days prior to such Special Record Date. The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and at least annually shall forward a copy or summary of such records to the Issuer. Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Section 206. Registration, Transfer and Exchange of Bonds. The Issuer covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond Registrar as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any Authorized Denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. 10 Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Bonds. The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Article III hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Article II. The Issuer and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute Owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Bond Registrar. Section 207. Execution, Registration, Authentication and Delivery of Bonds. Each of the Bonds, including any Bonds issued in exchange or as substitutions for the Bonds initially delivered, shall be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Clerk, and the seal of the Issuer shall be affixed thereto or imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds in the manner herein specified, and to cause the Bonds to be registered in the office of the Clerk, which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Bonds shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bonds ceases to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of 11 such Bond are the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Bond Registrar for authentication. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Bond Resolution. Upon authentication, the Bond Registrar shall deliver the Bonds to the Purchaser upon instructions of the Issuer or its representative. Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond under this Section, the Issuer and the Paying Agent may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Bond Resolution equally and ratably with all other Outstanding Bonds. Section 209. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer. Section 210. Book-Entry Bonds; Securities Depository. The Issuer and Paying Agent have entered into a OTC Representation Letter with OTC. The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless 12 the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraph. The Issuer may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in an Authorized Denominations and form as provided herein. Section 211. Nonpresentment of Bonds. If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available 13 to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four (4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 212. Preliminary and Final Official Statement. For the purpose of enabling the Purchaser to comply with the requirements of Section (b )( 1) of the SEC Rule, the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be "final" as of its date, except for the omission of such information as is permitted by Section (b )( 1) of the SEC Rule, and the appropriate officers of the Issuer are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the SEC Rule. The Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor and Finance Director of the Issuer are hereby authorized to execute the Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the Issue Date. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of the SEC Rule and Rule G-32 of the Municipal Securities Rulemaking Board. Section 213. Sale of the Bonds. The sale of the Bonds to the Purchaser is hereby approved and confirmed. The Mayor and Clerk are hereby authorized to execute the official bid form submitted by the Purchaser. Delivery of the Bonds shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoption of this Bond Resolution), upon payment of the Purchase Price. ARTICLE III REDEMPTION OF BONDS Section 301. Redemption by Issuer. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2028, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2027, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. 14 Mandatory Redemption. The Tenn Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements of this Section at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The taxes levied in Article IV hereof which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Tenn Bonds: *Final Maturity Principal Amount $235,000 345,000 Year 2029 2030* At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the Issuer may: (1) deliver to the Paying Agent for cancellation Tenn Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Tenn Bonds subject to mandatory redemption on said mandatory Redemption Date from any Owner thereof whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the Issuer under this Section for any Tenn Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection. Each Tenn Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the Issuer to redeem Tenn Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Tenn Bonds of the same Stated Maturity as designated by the Issuer, and the principal amount of Tenn Bonds to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the Issuer intends to exercise any option granted by the provisions of clauses ( 1 ), (2) or (3) above, the Issuer will, on or before the 45th day next preceding each mandatory Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with, with respect to such mandatory redemption payment. Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall detennine. Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond Registrar may detennine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is detennined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: ( 1) for payment of the Redemption Price and interest to the Redemption Date of a 15 minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption. Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; ( c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will 16 notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a) Each further notice ofredemption given hereunder shall contain the information required above for an official notice of redemption plus ( 1) the CU SIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; (4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. ( c) Each check or other transfer of funds issued for the payment of the Redemption Price of Bonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as 17 to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 402. Levy and Collection of Annual Tax; Transfer to Debt Service Account. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. The referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLEV ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a) Improvement Fund for General Obligation Internal Improvement Bonds, Series 2020-A. (b) Debt Service Account for General Obligation Internal Improvement Bonds, Series 2020- A (within the Bond and Interest Fund). ( c) Rebate Fund for General Obligation Internal Improvement Bonds, Series 2020-A. The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a) All accrued interest received from the sale of the Bonds, if any, shall be deposited in the Debt Service Account. (b) The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited in the Improvement Fund. 18 Section 503. Application of Moneys in the Improvement Fund; Redemption of Refunded Notes. Moneys in the Improvement Fund shall be used for the sole purpose of: (a) paying the costs of the Improvements, in accordance with the plans and specifications therefor approved by the Governing Body and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable and approved by the Governing Body; (b) paying interest on the Bonds during construction of the Improvements; ( c) paying Costs of Issuance; ( d) retiring the Refunded Notes; and ( e) transferring any amounts to the Rebate Fund required by this Article V. Upon completion of the Improvements, any surplus remaining in the Improvement Fund shall be deposited in the Debt Service Account. Section 504. Substitution of Improvements; Reallocation of Proceeds. (a) The Issuer may elect for any reason to substitute or add other public improvements to be financed with proceeds of the Bonds provided the following conditions are met: (I) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the Governing Body in accordance with the laws of the State; (2) a resolution or ordinance authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the Governing Body pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution or ordinance to the transcript of proceedings for the Bonds to include the Substitute Improvements; and (4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law. (b) The Issuer may reallocate expenditure of Bond proceeds among all Improvements financed by the Bonds; provided the following conditions are met: (1) the reallocation is approved by the Governing Body; (2) the reallocation shall not cause the proceeds of the Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and Interest Fund. 19 Section 506. Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code§ 148(t) in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. (c) Notwithstanding any other provision of this Bond Resolution, including in particular Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may, at the discretion of the Issuer, be credited to the Debt Service Account. ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than I 0% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: 20 (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. ARTICLE VII DEFEASANCE Section 701. Defeasance. When any or all of the Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited 21 with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Article III hereof. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed to execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer. Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article VII hereof or any other provision of this Bond Resolution until such time as is set forth in the Federal Tax Certificate. ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Section 901. Disclosure Requirements. The Mayor and Clerk are hereby authorized and directed to execute the Disclosure Undertaking in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth 22 in the Disclosure Undertaking, the provisions of which are incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners. Section 902. Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within I 0 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of this Bond Resolution, failure of the Issuer to comply with its covenants contained in the preceding section shall not be considered an Event of Default under this Bond Resolution. ARTICLEX MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the Governing Body shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Bond Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by ordinance or resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a) extend the maturity of any payment of principal or interest due upon any Bond; (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Bond; ( c) permit preference or priority of any Bond over any other Bond; or ( d) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Bond Resolution. 23 Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by ordinance or resolution duly adopted by the Governing Body at any time in any legal respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or ordinance adopted by the Governing Body amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental ordinance or resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the ordinance or resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond 24 Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed ifthe same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form ofnotice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance of the Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. All closing documents, certificates, and related instruments may be executed by electronic transmission. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court oflaw. Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1007. Severability. If any section or other part of this Bond Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Bond Resolution. Section 1008. Governing Law. This Bond Resolution shall be governed exclusively by and construed in accordance with the applicable Jaws of the State. Section 1009. Effective Date. This Bond Resolution shall take effect and be in full force from and after its adoption by the Governing Body. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 25 Shandi Wicks, CMC, City Clerk (Signature Page to Bond Resolution) REGISTERED NUMBER EXHIBIT A (FORM OF BONDS) REGISTERED $ Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES 2020-A Interest Rate: Maturity Date: REGISTERED OWNER: PRINCIPAL AMOUNT: Dated CU SIP: Date: April 29, 2020 KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 of each year, commencing April 1, 2021 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record Date(s) A-1 for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2020-A," aggregating the principal amount of $5,210,000 (the "Bonds") issued for the purposes set forth in the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer prescribing the form and details of the Bonds (collectively, the "Bond Resolution"). The Bonds are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 and Article 12, Section 5 of the Constitution of the State of Kansas, as amended, and all other provisions of the laws of the State of Kansas applicable thereto. General Obligations. The Bonds constitute general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity, as set forth in the Bond Resolution. Book-Entry System. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial A-2 owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon payment of the charges therein prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issued in fully registered form in Authorized Denominations. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Bond Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of bonds, does not exceed any constitutional or statutory limitation. A-3 IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS (Facsimile Seal) By: ~~~~<~f:=ac=s=im~ile~)~~~~~~~- Mayor ATTEST: By: ~~~~<~f:=ac=s=im~ile~)~~~~~~~- Clerk A-4 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2020-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date _______ _ Registration Number: _________ _ Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent CERTIFICATE OF CLERK STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that the within Bond has been duly registered in my office according to law as of April 29, 2020. WITNESS my hand and official seal. (Facsimile Seal) By: ____ (~f:~ac~s=im~ile~)~------- Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ______ _ WITNESS my hand and official seal. (Seal) By: -------------Treasurer of the State of Kansas A-5 BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of$ , standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do(es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises. Dated ________ _ Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 (PRINTED LEGAL OPINION) A-6 TRANSCRIPT CERTIFICATE $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), do hereby make this certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described bonds (the "Bonds"); and do hereby certify as of April 13, 2020, as follows: 1. Meaning of Words and Terms. Capitalized words and terms used herein, unless otherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such words and terms in the hereinafter defined Bond Resolution authorizing the Bonds. 2. Organization. The Issuer is a legally constituted city of the first class organized and existing under the laws of the State of Kansas. 3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authorization and issuance of the Bonds is to the best of our knowledge, information and belieffull and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript, and the facts stated in the Transcript still exist. In each and every instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. 4. Newspaper. The Salina Journal was the official newspaper of the Issuer at all times during these proceedings. 5. Meetings. All of the meetings of the governing body of the Issuer at which action was taken as shown in the Transcript were either regular meetings or duly adjourned regular meetings or special meetings duly called and held in accordance with law and the ordinances and rules of the Issuer. 6. Incumbency of Officers. The following named persons were and are the duly qualified and acting officers of the Issuer at and during all the times when action was taken as indicated in the Transcript as follows: Name Mike Hoppock Trent Davis Karl Ryan Kaye Crawford Jon R. Blanchard Kristin M. Seaton Melissa Rose Hodges Mike Hoppock Trent Davis Karl Ryan Title Mayor Mayor Mayor Mayor Mayor Mayor Vice-Mayor Vice-Mayor Vice-Mayor Vice-Mayor Term of Office January 13, 2020 to Present January 14, 2019 to January 13, 2020 January 8, 2018 to January 14, 2019 April 18, 2016 to January 8, 2018 April 20, 2015 to April 18, 2016 April 16, 2001 to April 14, 2003 January 13, 2020 to Present January 14, 2019 to January 13, 2020 January 8, 2018 to January 14, 2019 April 18, 2016 to January 8, 2018 Kaye Crawford Vice-Mayor April 20, 2015 to April 18, 2016 Jon R. Blanchard Vice-Mayor April 21, 2014 to April 20, 2015 Karl Ryan Commissioner April 20, 2015 to Present Rod Franz Commissioner January 13, 2020 to Present Melissa Rose Hodges Commissioner January 9, 2017 to Present Mike Hoppock Commissioner January 8, 2018 to Present Trent Davis Commissioner September 8, 2014 to Present Joe Hay, Jr. Commissioner January 8, 2018 to January 13, 2020 Kaye Crawford Commissioner April 18, 2011 to January 8, 2018 Randall Hardy Commissioner April 15, 2013 to January 8, 2017 Jon Blanchard Commissioner April 15, 2013 to January 8, 2018 Alan Jilka Commissioner April 16, 2001 to April 13, 2009 Debbie Divine Commissioner April 16, 2001 to April 16, 2007 Monte Shadwick Commissioner April 16, 2001 to April 18, 2005 Don Heath Commissioner January 14, 2002 to April 14, 2003 Shandi Wicks Clerk March 10, 2014 to Present Lieu Ann Elsey (Nicola) Clerk April 1, 2001 to December 16, 2013 7. Execution of Bonds. The Bonds have been executed with facsimile signatures; and the facsimile signatures appearing on the face of the Bonds are facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer; which facsimiles are ratified as a proper execution of said Bonds. Each signature has either been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75- 4001 et seq. or executed in accordance with K.S.A. 16-1601 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Bonds and on the reverse side of each of the Bonds at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Bond bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen bond included in the Transcript is in the form adopted by the governing body of the Issuer for the Bonds. 8. Authorization and Purpose of the Bonds. The Bonds are being issued pursuant to and in full compliance with the Constitution and the statutes of the State, including particularly K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, Ordinance No. 20-11029 and Resolution No. 20-7816 of the Issuer duly adopted by the governing body of the Issuer on April 13, 2020 (collectively, the "Bond Resolution") for the purpose of: (a) paying a portion of the costs of certain public improvements (the "Improvements"); and (b) retiring on May 1, 2020 a portion of the following temporary notes of the Issuer, issued to temporarily finance the Improvements, as follows (the "Refunded Notes"): Description General Obligation Temporary Notes Series Dated Date 2019-1 April 24, 2019 Maturity Date May 1, 2020 Amount Redeemed $5,551,341.19 The total principal amount of the Bonds does not exceed the cost of the Improvements for which the Bonds are issued. 2 The interest rates on the Bonds on the date of the sale of the Bonds were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9. Bonded Indebtedness. The currently outstanding applicable indebtedness of the Issuer, including the Bonds, does not exceed any applicable constitutional or statutory limitations. A schedule of general obligation indebtedness of the Issuer, which sets forth all currently outstanding general obligation indebtedness of the Issuer, is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. 10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer for the year 2019 was $509,082,680. 11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; ( e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and interest on the Bonds. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 WITNESS our true and genuine manual signatures and the seal of the Issuer. (S Shandi Wicks, CMC, City Clerk (Signature page to Transcript Certificate -Bonds) EXHIBIT A CITY OF SALINA, KANSAS SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of April 29, 2020) General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturity Outstanding 12-15-08 2008-B Internal Improvements $3,525,000 07-01-24 $390,000 07-15-09 2009-A Internal Improvements 23,695,000 10-01-20 595,000 05-01-10 2010-A Refunding & Improvement 6,875,000 10-01-20 330,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 1,170,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-21 740,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 1,340,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 180,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 905,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 2,920,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 4,600,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 5,515,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 5,785,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 12,430,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 8,745,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 1,975,000 04-24-19 2019-A Improvements 11,090,000 10-01-39 11,090,000 04-29-20 2020-A Improvements 5,210,000 10-01-40 5,210,000 Total $63,920,000 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding 2019-1 04-24-19 05-01-20 $6,085,000 $0(1) 2019-2 10-15-19 07-01-20<21 5,085,000 O(l) 2020-1 04-29-20 05-01-21 7,050,000 7,050,000 $7,050,000 <1l To be redeemed with proceeds from the Series 2020-1 Notes and Series 2020-A Bonds and other available funds. <21 Conditionally called for redemption on May 4, 2020. CBil'lDICATB OPMANUALSIGNA.TOltS OP'l'lm aax OFTBEcr'JYOPBALINA, KANSAS DJTBltODJCIQFTlllRQPFWlYOISTAD PITBllJADOllWflAI STATE OP KANSAS COUNTY OP SALINB ) ) SS. ) Sub1Cn'bcd mad IWOl1l to before me u of 1uly 14, 2014. (SEAL) J..l RECEIVED JUL II 201I REGISTERED NUMBERR-1 REGISTERED $495,0000.00 Interest Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL I SERIES 2020- Maturity Rate: 3.000% Date: October 1, 2021 CU SIP: 794744 CL4 REGISTERED OWNER: PRINCIPAL AMOUNT: E PRESENTS: That the City of Salina, in the County of Saline, State of Kansas '), for value received, hereby acknowledges itself to be indebted and promises to pay to the g stere wner shown above, or registered assigns, but solely from the source and in the manner h 1e , the Principal Amount shown above on the Maturity Date shown above, unless called for redem on prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown ao computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April I and October I of each year, commencing April 1, 2021 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. lnterest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal lmprovement Bonds, Series 2020-A," aggregating the principal amount of $5,210,000 (the "Bonds") issued for the purposes set forth i the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer presc · g the form and details of the Bonds (collectively, the "Bond Resolution"). The Bonds are iss uthority of and in full compliance with the provisions, restrictions and limitations of the on t10n laws of the State of Kansas, including K.S.A. 10-101 to 10-125, inclusive, K.S.A -6 e q., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ord· a . 39 Article 12, Section 5 of the Constitution of the State of Kansas, as amended, and all s of the laws of the State of Kansas applicable thereto. General Obligations. Book-Entry S e Bonds are being issued by means of a book-entry system with no physical distribution r ates to be made except as provided in the Bond Resolution. One Bond certificate with r ch date on which the Bonds are stated to mature or with respect to each form of Bonds, registered · nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the 2 provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon payment of the charges therei rescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial r · tration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the P · my deem and treat the person in whose name this Bond is registered on the Bond Regist a so owner hereof for the purpose of receiving payment of, or on account of, the princip r re m · n price hereof and interest due hereon and for all other purposes. The Bonds are issue · g1stered form in Authorized Denominations. Authentication. This Bond shall not be entitled to any security or benefit under the hereit Authentication and Registration hereon shall h o obligatory for any purpose or be ond Resolution until the Certificate of y executed by the Bond Registrar. IED that all acts, conditions, and things required ...__i_..ance of this Bond have been properly done and ula rm an manner as required by the Constitution and Jaws of bte ss of the Issuer, including this series of bonds, does not 3 IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS / /. ~ / '/ By: <..- Michael L. Hoppock, By: .?9i JaMfii ,U j (QU Shandi Wicks, CMC, City Clerk 4 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Internal Improvement Bonds, Series 2020-A, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date: April I 5, 2020 Registration Number: 0322-085-042920-898 STATE OF KANSAS COUNTY OF SALINE (SI OFFICE OF THE TREAS ) ) SS. ) , STATE OF KANSAS Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent By: ?Yi 1DJA{jl ,U)lOU Shandi Wicks, CMC, City Clerk JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ------- .1NESS my hand and official seal. Treasurer of the State of Kansas 5 BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of $ ____ _ standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do( es) hereby irrevocably constitute and appoint as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises Dated ________ _ Name 6 LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: Governing Body City of Salina, Kansas Robert W. Baird & Co., Inc. Red Bank, New Jersey GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 April 29, 2020 Re: $5,210,000 General Obliga the City of Salina, Kans , a provement Bonds, Series 2020-A of 29,2020 its issuance of the above-captio the certified proceedings, c opinion. Capitalized terms resolution adopted by t e City of Salina, Kansas (the "Issuer"), in connection with (the onds"). In this capacity, we have examined the law and ns other documents that we deem necessary to render this wise efined herein shall have the meanings ascribed thereto in the body of the Issuer prescribing the details of the Bonds. Regarding que and other certifications of. s of ct material to our opinion, we have relied on the certified proceedings c officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: I. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3. The interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item 7 of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax conseq nces arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enfor bankruptcy, insolvency, reorganization, moratorium and other generally and by equitable principles, whether considered at I This opinion is given as of its date, and we assume opinion to reflect any facts or circumstances that ma t o may occur after the date of this opinion. 8 e may be limited by affecting creditors' rights ion to revise or supplement this attention or any changes in law that AGREEMENT BETWEEN ISSUER AND AGENT $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 THIS AGREEMENT, dated as of April 29, 2020, between the City of Salina, Kansas, a municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent"). WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the above- captioned bonds (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Bond Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows: I. APPOINTMENT Issuer hereby appoints or has previously appointed the State Treasurer of Kansas to act as Paying Agent, Bond Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Bond Registrar and Transfer Agent. II. BASIC DUTIES A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and address( es) of the initial registered owner(s) of the Securities together with such registered owners' tax identification (social security) number(s), the maturity date(s), denomination(s) and interest rate(s) for each Security. B. Agent shall manually authenticate the originally issued Securities upon the written order of one or more authorized officers of Issuer. Thereafter, Agent shall manually authenticate all Securities resulting from transfer or exchange of Securities. C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be presented for registration, transfer and exchange; and shall also maintain an office in the City of Topeka, Kansas, where Securities may be presented for payment. Agent shall keep a register of the Securities and their transfer and exchange. D. Agent may rely upon any document believed by it to be genuine and to have been signed or presented by the proper person. Agent need not investigate any fact or matter stated in the document. Agent undertakes to perform such duties and only such duties set forth in K.S.A. I 0-620 et seq., except as specifically provided in this Agreement. E. Agent shall notify the owners of the Securities upon default in payment of principal or interest on the Securities and the Agent shall have no duties or responsibilities thereafter. III. COMPENSATION Issuer covenants and agrees to pay to Agent, as reasonable compensation for the services provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $3,750, which is based on "Book-entry Only" Securities. This amount will be due at the time of registration unless such fee is to be paid from the proceeds of the bond issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the bond issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. I 0-505 for performing the duties of paying the principal of the Securities. N. STANDARD OF PERFORMANCE Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securities are to be issued in certificated or uncertificated form, or both. A. S~TEMEN~OFOWNERSH" Agent agrees to provide Statements of Ownership to the owner ofuncertificated Securities. Such Statements shall be in accordance with the standards set forth by the Attorney General. All Statements shall be issued in the denominations of $1,000 or $5,000 or integral multiples thereof except for one additional Security in another denomination, which additional Security shall mature in the initial maturity year of the series of the Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Agent shall at all times maintain an adequate supply of Statements of Ownership for any anticipated transfers or exchanges of the Statements. B. CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordance with the standards set forth by the Attorney General and unless otherwise authorized by Agent, the principal thereof shall be payable only upon surrender of the Security to Agent. All certificates shall be issued in the denomination of$1,000 or $5,000 or integral multiples thereof except one authorized Security in another denomination which additional Security shall mature in the initial maturity year of the series of Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the payment of the printing or other expenses for such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each number(s) prior to the issuance of the applicable Securities. C. INTEREST CALCULATIONS Agent shall calculate interest on the basis of$ I ,000 and $5,000 units, or in the case of one odd denomination, calculate the unit separately. Each intermediate unit calculation is first determined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal 2 place is equal to or greater than five the sixth decimal place is increased by one. The final per unit calculation is subsequently rounded to two decimal positions. (See Attachment "A" for sample calculation.) D. SURRENDER Securities surrendered for payment, cancellation or partial redemption shall be cancelled by Agent and returned to Issuer in accordance with K.S.A. I 0-I I I. E. TRANSFERS AND EXCHANGES I . When Securities are presented to Agent for transfer or exchange, Agent shall so transfer or exchange such Securities if the requirements of Section 8-40 I (I) of the Uniform Commercial Code are met. 2. In accordance with the authorizing Resolution or Ordinance of the Issuer (the "Bond Resolution"), payments of interest shall be made to the owner of record of each Security as of the close of business on the fifteenth day of the month preceding each interest payment date. The Agent shall make such payments to the record owner of each Security as set forth on the registration books maintained by Agent as of such date. 3. Agent shall not be required to transfer or exchange any Security during a period beginning on the day following the fifteenth day of the month preceding any interest payment date for such Securities and ending at the close of business on the interest payment date, or to transfer or exchange any Security selected or called for redemption in whole or in part subsequent to the date notice of such redemption is given in accordance with the Bond Resolution authorizing the Securities. F. REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers or exchanges shall bear a Date of Registration as of the date that all the required documentation is received at the Agent's official place of business. Issuer will provide funds to make any interest or principal payments in accordance with K.S.A. I 0-I 30 and amendments thereto. Agent is hereby authorized to effect any semiannual payment of interest or any principal by charging the Issuer's Fiscal Agency account with Agent. G. REPLACEMENT OF SECURITIES If the owner of a Security claims that a Security has been lost, destroyed or wrongfully taken, Issuer shall issue and Agent shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent shall perform this function. An indemnity bond and affidavit of loss shall be provided to Agent and Issuer at the expense of the owner of the Security. Such indemnity bond and affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agent from any loss which any of them may suffer ifthe Security is replaced. Issuer may charge the Security owner for its expenses in the replacement of a Security. 3 H. REDEMPTIONS Optional Redemption. If any Securities are to be redeemed pursuant to an optional redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen ( 15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Mandatory Redemption. If any Securities are subject to mandatory redemption in accordance with their terms of the Bond Resolution, no additional notice is required to be given to the Agent to exercise the mandatory redemption. The Agent will provide notice of such redemption utilizing substantially the form of Notice of Mandatory Redemption attached hereto as Appendix I. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen ( 15) days preceding the date notice is to be provided to the Security owners for the purpose of selecting Securities on a partial redemption. Further, in the event notice is given to Agent for a complete redemption of the Issue according to the terms of the Bond Resolution, Agent shall not be required to transfer or exchange any Security beginning on the day following the 15th day preceding the date set for redemption. I. MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal to one Security for each maturity) for registration and exchange, and shall safeguard any ''blank" Securities held for purpose of exchange or transfer. J. REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance of Securities upon written request of Issuer. K. CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas and also the Bond Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 4 By: _?51. JDJA{ji ,U )lOU Shandi Wicks, CMC, City Clerk CITY OF SALINA, KANSAS OFFICE OF THE TREASURER OFTHE STATE OF KANSAS By: -~~~~:....:::.......k):....=..a.L_::....::....==._ Director of Fiscal Services (Signature page to Agreement Between Issuer and Agent -Bonds) ATTACHMENT "A" SAMPLE $5,000.00000 ........................ Bond Unit x .06875 ........................ Interest Rate 343.750000 Rounded to six decimal places I 360 ........................ Days per year .954861 Rounded to six decimal places x 180 ........................ Day in interest period 171.874980 (Rounded to second decimal= $171.87) Unit interest is then multiplied by the number of units in the maturity. A-1 APPENDIX/ NOTICE OF CALL FOR MANDATORY REDEMPTION TO THE OWNERS OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 Notice is hereby given that pursuant to the provisions of Article III of Resolution No. 20-7816 (the "Bond Resolution") of the City of Salina, Kansas (the "Issuer") that a portion of the above-mentioned bonds (the "Bonds") scheduled to mature on October 1, 2030 (the "Called Bonds"), have been called for mandatory redemption and payment on October 1, __ (the "Redemption Date"), at the principal office of the Treasurer of the State of Kansas (the "Bond Registrar and Paying Agent"). Maturity Date (October 1) Principal Amount Interest Rate CU SIP Number On the Redemption Date there shall become due and payable, upon the presentation and surrender of each such Called Bond, the redemption price thereof equal to 100% of the principal amount thereof together with interest accrued to the Redemption Date. 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'De ....... flddl_...c_, "'1cDTCll4MC'•lld•1...-1111111m .......,._ __ lld.._ ....... nllalt1t. .......... .....,.., ......... ., 6-ot UNDERWRITING SAFEKEEPING AGREEMENT BY AND BETWEEN DEPOSITORY TRUST COMPANY AND CITY OF SALINA, KANSAS AND THE OFFICE OF THE KANSAS STATE TREASURER $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 In order to induce the Depository Trust Company (the "OTC") to accept delivery of the above captioned bonds (the "Bonds") for safekeeping prior to the delivery of the Bonds on April 29, 2020 (the "Closing Date"), the City of Salina, Kansas (the "Issuer"), and the Treasurer of the State of Kansas (the "Agent") hereby agree to place the entire principal amount of the Bonds, in the custody, control and possession of OTC at least one day prior to the Closing Date. The Issuer further agrees that by copy of this letter appropriately executed, it will notify OTC to follow the instructions of the underwriter of the Bonds (the "Underwriter") in distributing the Bonds. OTC will safekeep and hold in escrow the Bonds until it shall have received notification from one of the following authorized representatives of the Issuer to release or return the Bonds: Shandi Wicks, Clerk, or Gilmore & Bell, P.C., Bond Counsel. Notification may be made by telephone or by receipt of an executed notice, delivered or telecopied to OTC; provided, however, that if the notification is made by telephone, written notice must be sent within 24 hours of the original notification. In the event the Issuer executes the release of the Bonds, OTC will distribute the Bonds pursuant to written instructions provided by the Underwriter; however, in the event a demand for the return of the Bonds is received, OTC shall return the Bonds as soon as practicable, but in any event, no later than the following business day. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CITY OF SALINA, KANSAS Dated: April 13, 2020 By: 25110JA{j1 ,U)lOU Shandi Wicks, CMC, City Clerk (Signature page to Underwriting Safekeeping Agreement -Bonds) Moony's INVESTORS SERVICE April 16, 2020 Mr. David Arteberry Stifel Nicolaus & Company, Inc. 4801 Main Street Suite 530 Kansas City, MO 64112 Dear Mr. Arteberry : 600 North Pearl Street Suite 2165 Dallas, TX 75201 www.moodys.com We wish to inform you that on April 7, 2020, Moody's Investors Service reviewed and assigned a rating of • No Outlook to Salina (City Of) KS • Aa3 to Salina (City Of) KS , General Obligation Internal Improvement Bonds, Series 2020-A Credit ratings issued by Moody's Investors Service, Inc. and its affiliates ("Moody's") are Moody's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities and are not statements of current or historical fact. Moody's credit ratings address credit risk only and do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. This letter uses capitalized terms and rating symbols that are defined or referenced either in Moody's Definitions and Symbols Guide or MIS Code of Professional Conduct as of the date of this letter, both published on www.moodys.com. The Credit Ratings will be publicly disseminated by Moody's through normal print and electronic media as well as in response to verbal requests to Moody's Rating Desk. Moody's related research and analyses will also be published on www.moodys.com and may be further distributed as otherwise agreed in writing with us. Moody's Credit Ratings or any corresponding outlook, if assigned, will be subject to revision, suspension or withdrawal, or may be placed on review, by Moody's at any time, without notice, in the sole discretion of Moody's. For the most current Credit Rating, please visit www.moodys.com. Moody's has not consented and will not consent to being named as an expert under applicable securities laws, such as section 7 of the Securities Act of 1933. The assignment of a rating does not create a fiduciary relationship between Moody's and you or between Moody's and other recipients of a Credit Rating. Moody's Credit Ratings are not and do not provide investment advice or recommendations to purchase, sell or hold particular securities. Moody's issues Credit Ratings with the expectation and understanding that each investor will make its own evaluation of each security that is under consideration for purchase, sale or holding. Moody's adopts all necessary measures so that the information it uses in assigning a Credit Rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently validate or verify information received in the rating process. Moody's expects and is relying upon you possessing all legal rights and required consents to disclose the information to Moody's, and that such information is not subject to any restrictions that would prevent use by Moody's for its ratings process. In assigning the Credit Ratings, Moody's has relied upon the truth, accuracy, and completeness of the information supplied by you or on your behalf to Moody's. Moody's expects that you will, and is relying upon you to, on an ongoing basis, promptly provide Moody's with all information necessary in order for Moody's to accurately and timely monitor the Credit Ratings, including current financial and statistical information. April 16, 2020 Mr. David Arteberry Stifel Nicolaus & Company, Inc. 4801 Main Street Suite 530 Kansas City, MO 64112 Under no circumstances shall Moody's have any liability (whether in contract, tort or otherwise) to any person or entity for any loss, injury or damage or cost caused by, resulting from , or relating to, in whole or in part, directly or indirectly, any action or error (negligent or otherwise) on the part of, or other circumstance or contingency within or outside the control of, Moody's or any of its or its affiliates' directors, officers, employees or agents in connection with the Credit Ratings. ALL INFORMATION, INCLUDING THE CREDIT RATING, ANY FEEDBACK OR OTHER COMMUNICATION RELATING THERETO IS PROVIDED "AS IS" WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND. MOODY'S MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH INFORMATION. Any non-public information discussed with or revealed to you must be kept confidential and only disclosed either (i) to your legal counsel acting in their capacity as such ; (ii) to your other authorized agents acting in their capacity as such with a need to know that have entered into non-disclosure agreements with Moody's in the form provided by Moody's and (iii) as required by applicable law or regulation. You agree to cause your employees, affiliates, agents and advisors to keep non-public information confidential. If there is a conflict between the terms of this rating letter and any related Moody's rating application, the terms of the executed rating application will govern and supercede this rating letter. Should you have any questions regarding the above, please do not hesitate to contact Ryan Mills at 214-979- 6852. Sincerely, Moody's Investors Service Inc CREDIT OPINION 9 April 2020 ~ Rate this Research Contacts Ryan Mills + 1.214.979.6852 AVP-Analyst ryan mills@moodys.com Adebola Kushimo +1.214.979.6847 VP-Senior Analyst adebola.kushimo@moodys.com CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 U.S. PUBLIC FINANCE Salina (City of) KS Update t o cred it analysis Summary The City of Salina, KS' (Aa3) credit profile is supported by a moderately sized tax base that serves as and the commercial and retail hub for Salina County and below average resident income indices, offset by affordable housing prices. Additionally, the profile considers the city's below median operating reserves that are bolstered by additional liquidity outside of the operating fund. These strengths are tempered by the city's elevated debt burden that is pa rtially mitigated by self supporting utility funds and a manageable pension burden. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for the City of Salina. However, the situation surroundi ng Coronavirus is rapidly evolving and the lo nger term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the City of Salina changes, we will update our opinion at that time. Credit strengths » Regional commercial and retail center » Significant additional liquidity outside of the operating fund Credit challenges » Dependence on economically sensitive revenue » Above average debt burden Rating outlook Moody's does not generally assign outlooks to local government credits with this amount of debt outstanding. Factors that could Lead to an upgrade » Substantial growth in the tax base » Material growth in financial reserves » Notable decline in the debt burden Factors that could Lead to a downgrade >> Contraction in the tax base MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE » Material decline in financia l reserves » Further leveraging of the tax base absent corresponding valuation increases » Inability to access the capital markets for takeout financing or inability to redeem with available liquidity if necessary (notes) Key indicators Exhibit 1 Salina (City of) KS 2014 2015 2016 2017 2018 Economy!T ax Base Total Full Value ($000) $2,917,268 $2,968,008 $3,046,949 $3,097,885 $3,150,409 Population 47,894 47,840 47,676 47,513 47,230 Full Value Per Capita $60,911 $62,040 $63,909 $65,201 $66,704 Median Family Income(% of US Median) 84.6% 86.2% 86 .8% 88.3% 86.7% Finances Operating Revenue ($000) $43,600 $45,716 $47,136 $48,320 $47,819 Fund Balance ($000) $5,248 $5,350 $4,901 $9,260 $9,076 Cash Balance ($000) $4,695 $5,736 $5,787 $8,354 $7,647 Fund Balance as a % of Revenues 12.0% 11.7% 10.4% 19.2% 19.0% Cash Balance as a % of Revenues 10.8% 12.5% 12.3% 17.3% 16.0% DebUPensions Net Direct Debt ($000) $57,415 $59, 190 $77,320 $76,290 $82,277 3-Year Average of Moody's ANPL ($000) $96,885 $87,854 $79,470 $79,178 $83,509 Net Direct Debt I Full Value(%) 2.0% 2.0% 2.5% 2.5% 2.6% Net Direct Debt I Operating Revenues (x) 1.3x 1.3x 1.6x 1.6x 1.7x Moody's -adjusted Net Pension Liability (3-yr average) to Full Value(%) 3.3% 3.0% 2.6% 2.6% 2.7% Moody's -adjusted Net Pension Liability (3-yr average) to Revenues (x) 2.2x 1.9x 1.7x 1.6x 1.7x Source: Moody's Investors Service; City of Salina audited annual financial statements Profile The City of Salina is in north central Kansas (Aa2 stable), approximately 95 miles north of Wichita (Aa1 stable) near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2018 estimated population of 47,200. Detailed credit considerations Economy and tax base: moderately sized tax base serves as regional economic center The city's tax base is projected to remain stable over the near term due to the city's commercial, retail and medical importance to north central Kansas. The city's tax base grew to $3 .3 billion in fiscal 2019, which is twice the national median in the same peer group. Valuations averaged a modest 2.5% annual increase over the past five years, including a 4.6% increase in fiscal 2019. The city's tax base exhibits a mild degree of concentration, with the 10 largest taxpayers accounting fo r 10% of the 2019 assessed valuation. The top taxpayer, Westar Energy, Inc. (Baal stable), accounts for 3% of AV, and provides electricity to the city. The second largest taxpayer and employer, SFC (Schwan's) Global Supply Chain is a national supplier of frozen goods, with Tony's Pizza as one of the business' largest brands. The city is currently in the process of developing between 120-150 homes in two developments. As part of the development process for new homes, a special assessment district is created to assist in paying off a portion of the city's debt re lating to the creation of utilities for the development. City management reports that there is also commercial development in progress that will bring in fou r big box retail stores and ongoing redevelopment in the city's downtown core that includes the initiation of a $1 50 million redevelopment project. This publication does not announce a credit rating action For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 9 April 2020 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Resident income indices are below national average, with the 2018 median family income at 86.7% of the nation Favorably, the cost of living is well below the nation with median home levels at 59.3% of the nation. As of January 2020, the County of Saline's 3% unemployment rate was near the state's rate of 2.9% and below the national rate of 3.4% during the same period Financial operations and reserves: below average reserves bolstered by outside liquidity The city's financial position is expected to remain stable due to its status as a regional center for commerce and formal fund balance policies. Although the city's financial reserves are below peers, reserves are bolstered by liquidity outside of the operating fund that can be used if needed. In fiscal 2018 (fiscal year end December 31), the general fund posted a $140,000 deficit due to the city's under budgeting of specific line items. The operating fund, which is composed of the general and debt service funds, posted an $897,000 deficit, closing the fiscal year with $9.1 million, or 19% of operating revenues. Annually, funds are transferred to the general and debt service fund from the city's utility fund for administrative support and debt service. These funds can as well be accessed in the event of an emergency to provide additional liquidity to the general fund, which strengthens the profile The city's utility funds are very healthy with the water and sewer fund holding $24.2 million in cash and the solid waste disposal fund holding $6.4 million in cash at the close of fiscal 2018. The city also has $1.5 million in the sales tax capital fund that can be utilized if needed. At the close of fiscal 2019, the city is reporting a general fund balance of $7.1 million, which is an approximately $400,000 increase over the prior year. Typical of Kansas cities, sales tax receipts represent the city's primary operating revenue source, comprising 32% of fiscal 2018 general fund revenues, followed by property taxes at approximately 20% and charges for services at 15%. The city's sales taxes include the city's portion of a 1 % countywide sales tax and a local 0.5% sales tax. The city also has a 0.75% special sales tax that was approved in 2016 (sunsetting in 2035) specifically for economic development, capital projects and tax stabilization that are not housed in the general fund,but could help transfers from the general fund for capital projects. The city has a formal fund balance policies of maintaining between 15% and 20% of total annual revenues. The general fund had consistently adhered to the $5 million fund balance before it was elevated to $8 .5 million in 2018. As the general fund is $1.4 million short of the new general fund balance policy, the city expects to reach that goal in the next 3-5 years. LIQUIDITY The city closed fiscal 2018 with $7.6 million in cash and current investments, which equates to 16% of operating fund revenue. Debt, pensions and OPEBs: elevated debt burden partially supported by utility system The city's debt burden, though above average, will remain manageable in the near term due to support from the city's utility enterprises. Post sale, the city will have $97.2 million in total debt outstanding comprised of $641 million in debt secured by the city's ad valorem tax pledge, $20.3 million in temporary notes and $12.8 million in Kansas Water Supply loans paid by the self-supporting water and sewer enterprise, but ultimately secured by the city's ability to levy unlimited ad valorem property taxes. The city's direct debt burden of 3% of fiscal 2019 full value is slightly above average, but when accounting for the self-supporting nature of the enterprise debt, the burden falls to 2.8%. The city typically issues general obligation bonds and short-term notes each spring for general capital improvements. DEBT STRUCTURE All of the city's outstanding general obligation debt is fixed rate and matures over the long-term (final maturity fiscal 2037). Principal amortization is average with 70.4% of principal retired in 10 years. Inclusive of the current sale, the city will have $20.3 million of GO Temporary Notes outstanding, comprising approximately 20 .9% of total GO debt outstanding. While operating liquidity represents just 38% of the city's outstanding temporary financing, the city has ample liquidity in its utility funds, along with experience accessing the market and a practice of issuing long term financing or renewing notes. DEBT-RELATED DERIVATIVES The city is not party to any interest rate swaps or other derivative agreements. PENSIONS AND OPEB The city participates the Kansas Public Employees Retirement System (KPERS), a cost-sharing multiple-employer pension plan. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate actuarial valuations are 9 April 2020 Salina {City of) KS: Update to credit analysis 4 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE prepared to determine the contribution rate by group, the Local group and the Kansas Police and Firemen group. The city has consistently made its required contributions to the plan in accordance with statutory requirements. Moody's adjusted net pension liability (ANPL) reflects certain adjustments we make to improve comparability of reported pension liabilities. The "tread water" indicator measures the annual government contribution required to prevent the reported NPL from growing, under reported assumptions. Contributions above this level cover NPL interest plus pay down some principal, making them stronger from a credit perspective than contributions below this level. In fiscal 2018, the city's required contribution was at 101.7% of tread water. The city has historically made contributions above tread water. Moody's three year average adjusted ANPL for the city is $83.5 million, or 1.75 times fiscal 2018 operating revenues and 2.7% of full valuation. Contributions to the plan were approximately $3 million, or a manageable 6.4% of operating revenues. Fiscal 2018 fixed costs were approximately $11.2 million, representing a manageable 23% of operating revenues. ESG Considerations Environmental Environmental considerations are not currently a material credit factor for the city's ratings. The city's exposure to long term environmental trends is consistent with that of the US local government sector as a whole which is low. Extreme weather events are also typically accompanied by state and federal assistance, which further mitigates environmental risk. Social Social factors are not material to the rating. The city's wealth indicators are slightly below the nation, but the median home value is consid erably be low the national average, making the district affordable to live in. Governance The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government The city is a full service city that provides general government along with police, fire, utilities and arts and humanities. The city demonstrates good governance by establishing formal fund balance policies and periodically reviewing the policies to ensure they contin ue to provide flexibility and stability. Kansas Cities have an Institutional Framework score of Aaa, which is very high. Institutional Framework scores measure a sector's legal ability to increase revenues and decrease expenditures. The sector has one or more major revenue sources that are not subject to any caps. Specifically, large revenue sources for cities include property taxes and sales taxes. Sales taxes can be increased via voter referendum. Property taxes are now subject to an annual lid which limits the additional amount of taxes generated to the previous year plus the five year rolling average of the Consumer Price Index; however, numerous exemptions are stipulated in the legislation including expenses for debt service, public safety, and state and federal mandates among others. Unpredictable revenue fluctuations tend to be minor, or under 5% annually Across the sector, fixed and mandated costs are generally greater than 25% of expenditures. Kansas is a Right to Work state, providing significant expend iture-cutting ability. Unpredictable expenditure fluctuations tend to be minor, under 5% annually. 9 April 2020 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Rating methodology and scorecard factors The US Local Government General Obligation Debt methodology includes a scorecard, a tool providing a composite score of a local government's credit profile based on the weighted factors we consider most important, universal and measurable, as well as possible notching factors dependent on individual credit strengths and weaknesses. Its purpose is not to determi ne the final rating, but rather to provide a standard platform from which to analyze and com pare local government credits. Exhibit 2 Salina (City of) KS Rating Factors EconomyfT ax Base (30%} 111 Tax Base Size: Full Value (in OOOs} Full Value Per Capita Median Family Income(% of US Median} Finances (30%} Fund Balance as a % of Revenues 5-Year Dollar Change in Fund Balance as % of Revenues Cash Balance as a % of Revenues 5-Year Dollar Change in Cash Balance as % of Revenues Management (20%) Institutional Framework Operating History: 5-Year Average of Operating Revenues I Operating Expenditures Debt and Pensions (20%) Net Direct Debt I Full Value(%} Net Direct Debt I Operating Revenues (x} 3-Year Average of Moody's Adjusted Net Pension Liability I Full Value(%} 3-Year Average of Moody's Adjusted Net Pension Liability I Operating Revenues (x} [1] Economy measures are based on data from the most recent year available. [2] Notching Factors are specifically defined in the US Local Government General Obligation Debt methodology. [3] Standardized adjustments are outlined in the GO Methodology Scorecard Inputs publication. Source: US Census Bureau, Moody's Investors Service 9 April 2020 Measure Score $3,294,116 Aa $69,746 Aa 86.7% A 19.0% Aa 8.5% A 16.0% Aa 7.3% A Aaa Aaa 1.0x Baa 2.8% A 1.9x A 2.5% A 1.7x A Scorecard-Indicated Outcome A1 Assigned Rating Aa3 Salina (City of) KS: Update to credit analysis I 6 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2020 Moody's Corporation, Moody's Investors Service, Inc .. Moody's Analytics, Inc and/or their licensors and affiliates (collectively, "MOODY'S") All rights reserved CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK Of ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. 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REPORT NUMBER 1218228 9 April 2020 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Contacts Ryan Mills AVP-Analyst ryan mills@moodys com Moonv's INVESTORS SERVICE 9 April 2020 + 1.214.979.6852 Adebola Kushimo +1.214.979.6847 VP-Senior Analyst adebola.kushimo@moodys com CLIENT SERVICES Americas Asia Pacific japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 Salina (City of) KS: Update to credit analysis CLOSING CERTIFICATE $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), make this Certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described bonds (the "Bonds"); and certify as of April 29, 2020 (the "Issue Date"), as follows: 1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Bond Resolution (defined below) authorizing the Bonds. 2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and issuance of the Bonds (the "Transcript"), furnished to the Purchaser of the Bonds, is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated April 13, 2020 are true and correct as of this date and are incorporated in this Certificate by reference. 3. Authorization and Purpose of the Bonds. The Issuer is issuing and delivering the Bonds simultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, Ordinance No. 20-11029 and Resolution No. 20-7816 of the Issuer duly adopted by the governing body of the Issuer on April 13, 2020 (collectively, the "Bond Resolution") for the purpose of: (a) paying a portion of the costs of certain public improvement projects (the "Improvements"); and (b) retiring on May 1, 2020 a portion of the following temporary notes of the Issuer, issued to temporarily finance the Improvements, as follows (the "Refunded Notes"): Description Series Dated Date General Obligation Temporary Notes 2019-1 April 24, 2019 Maturity Date May 1, 2020 Amount Redeemed $6,085,000 4. Security for the Bonds. The Bonds are general obligations of the Issuer payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are pledged under the Bond Resolution to the payment of the principal of and interest on the Bonds. In the Bond Resolution, the governing body of the Issuer has covenanted to annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, by levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by Jaw. 6. Sale of Bonds. The Bonds have been sold at rates not in excess of the limitations set forth in K.S.A. 10-1009. The Notice of Sale dated March 26, 2020 and included in the Transcript constitutes a full true and correct copy thereof. A copy of such Notice of Sale and Preliminary Official Statement was sent to prospective purchasers of the Bonds, and to all other persons and firms requesting copies of such Notice of Sale and Preliminary Official Statement. 7. Official Statement. The Official Statement contained in the Transcript constitutes a full, true and correct copy of the Official Statement relating to the Bonds. To the best of our knowledge, the Official Statement, other than the sections entitled "The Notes," "The Bonds," "Legal Matters," "Tax Matters," and Appendices B, C and D, about which the Issuer expresses no opinion, is true in all material respects, and does not contain any untrue statement of a material fact or does not omit to state a material fact, necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. As of this date there has been no material adverse change in the financial condition or the financial affairs of the Issuer since the date of the Official Statement. No other event has occurred which is necessary to be disclosed in the Official Statement in order to make the statements therein not misleading in any material respect as of the date of this Certificate. The Issuer has previously caused to be delivered to the Purchaser copies of the Official Statement. 8. Continuing Disclosure Undertaking. The Issuer, in the Bond Resolution, has covenanted to disseminate such information as is required in accordance with the provisions of the SEC Rule and the Continuing Disclosure Undertaking, which are included in the Transcript and incorporated in this Certificate by reference. 9. Non-Litigation. There is no controversy, action, suit, proceeding, or to the best of our knowledge, any inquiry or investigation at Jaw or in equity or before or by any public board or body pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; (e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; (f) the levy and collection of an ad valorem property tax to pay the principal of and interest on the Bonds; or (g) the federal or state tax-exempt status of the interest on the Bonds; wherein any unfavorable decision, ruling or finding would adversely affect the Issuer, the transactions contemplated by the Bond Resolution or the Official Statement, or the validity or enforceability of the Bonds, which are not disclosed in the final Official Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 WITNESS our hands and the seal of the Issuer. Signature Official Title Mayor Clerk Shandi Wicks, CMC, City Clerk (Signature Page to Closing Certificate -Bonds) FEDERAL TAX CERTIFICATE Dated as of April 29, 2020 OF THE CITY OF SALINA, KANSAS $5,210,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A Section 1.01 Section 2.01 Section 2.02 Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Section 3.09 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section 5.01 Section 5.02 Section 5.03 Section 5.04 Section 5.05 Section 5.06 FEDERAL TAX CERTIFICATE TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................ I ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer ........................................................... 7 Survival of Representations and Covenants ........................................................... I 0 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS General. ...................................................................................................................... IO Reasonable Expectations .......................................................................................... I 0 Purpose of Financing ................................................................................................ I 0 Funds and Accounts .................................................................................................. I 0 Amount and Use of Bond Proceeds and Other Monies ......................................... IO Multipurpose Issue .................................................................................................... I I Current Refunding .................................................................................................... I I Completion of Financed Improvements -New Money Portion ............................ I I Sinking Funds ............................................................................................................ I 2 Reserve, Replacement and Pledged Funds ............................................................. I 2 Purpose Investment Yield ........................................................................................ I2 Issue Price and Yield on Bonds ................................................................................ I 2 Miscellaneous Arbitrage Matters ............................................................................ I 2 Conclusion ................................................................................................................. I 3 ARTICLE IV POST-ISSUANCE TAX COMPLIANCE General ....................................................................................................................... I3 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements .... I4 Temporary Periods/ Yield Restriction .................................................................... I4 Procedures for Establishing Fair Market Value .................................................... IS Certain Gross Proceeds Exempt from the Rebate Requirement .......................... I 7 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts. I9 ARTICLE V MISCELLANEOUS PROVISIONS Term of Tax Certificate ............................................................................................ 20 Amendments .............................................................................................................. 20 Opinion of Bond Counsel ......................................................................................... 2 I Reliance ...................................................................................................................... 2 I Severa bility ................................................................................................................ 2 I Benefit of Certificate ................................................................................................. 2 I (i) Section 5.07 Section 5.08 Section 5.09 Default, Breach and Enforcement ........................................................................... 21 Governing Law .......................................................................................................... 21 Electronic Transactions ............................................................................................ 21 LIST OF EXHIBITS TO FEDERAL TAX CERTIFICATE Exhibit A Exhibit B Exhibit C-1 Exhibit C-2 Exhibit D Exhibit E Exhibit F Debt Service Schedule and Proof of Bond Yield IRS Form 8038-G Purchaser's Receipt for Bonds and Issue Price Certificate Municipal Advisor's Certificate Regarding the Competitive Sale Description of Property Comprising the Financed Facility and List of Reimbursement Expenditures Sample Annual Compliance Checklist Sample Final Written Allocation * * * (ii) FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate") is executed as of April 29, 2020 (the "Issue Date"), by the City of Salina, Kansas, a political subdivision organized and existing under the laws of the State of Kansas (the "Issuer"). RECITALS 1. This Tax Certificate is being executed and delivered in connection with the issuance by the Issuer of $5,210,000 principal amount of General Obligation Internal Improvement Bonds, Series 2020-A (the "Bonds"), under the Bond Resolution (as herein defined), for the purposes described in this Tax Certificate and in the Bond Resolution. 2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Bond proceeds and of certain other money relating to the Bonds and set forth the conditions under which the interest on the Bonds will be excluded from gross income for federal income tax purposes. 3. The Issuer is executing this Tax Certificate in order to set forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the property financed or refinanced with those proceeds and the investment of the Bond proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes and to provide guidance for complying with the arbitrage rebate and yield reduction amounts provisions of Code§ 148(f). 4. The Issuer adopted a Tax Compliance Procedure (as defined below) for the purpose of setting out general procedures for the Issuer to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. This Tax Certificate is entered into as required by the Tax Compliance Procedure, in part, to set out specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Certificate, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Bond Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: "Adjusted Gross Proceeds" means the Gross Proceeds of the New Money Portion or the Refunding Portion, as applicable, reduced by amounts (a) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund, (b) that as of the Issue Date are not expected to be Gross Proceeds, but which arise after the end of the applicable spending period, and (c) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Annual Compliance Checklist" means a checklist for each of the Financed Improvements designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date, as further described in Section 4.02 and substantially in the form attached as Exhibit E. "Available Construction Proceeds" means the sale proceeds of the New Money Portion, increased by (a) Investment earnings on the sale proceeds, (b) earnings on amounts in a reasonably required reserve or replacement fund allocable to the New Money Portion but not funded from the Bonds, and (c) earnings on such earnings, reduced by sale proceeds (1) in any reasonably required reserve fund or (2) used to pay issuance costs of the Bonds. But Available Construction Proceeds do not include Investment earnings on amounts in a reasonably required reserve or replacement fund after the earlier of (i) the second anniversary of the Issue Date or (ii) the date the Financed Improvements are substantially completed. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) one- twelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. "Bond" or "Bonds" means any bond or bonds of the Issuer's General Obligation Internal Improvement Bonds, Series 2020-A, described in the recitals, authenticated and delivered under the Bond Resolution. "Bond Compliance Officer" means the Issuer's Finance Director or other person named in the Tax Compliance Procedure. "Bond Counsel" means Gilmore & Bell, P.C., or another firm of nationally recognized bond counsel acceptable to the Issuer. "Bond Resolution" means Ordinance No. 20-11029 and Resolution No. 20-7816 of the Issuer duly adopted by the governing body of the Issuer on April 13, 2020, as originally executed by the Issuer, as amended and supplemented in accordance with the provisions of the Bond Resolution. "Bond Year" means each one-year period (or shorter period for the first Bond Year) ending October 1 or another one-year period selected by the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date on which arbitrage rebate and yield reduction amounts for the Bonds are computed. The Issuer may treat any date as a Computation Date, subject to the following limits: (a) the first rebate installment payment must be made for a Computation Date not later than 5 years after the Issue Date; (b) each subsequent rebate installment payment must be made for a Computation Date not later than 5 years after the previous Computation Date for which an installment payment was made; and 2 ( c) the date the last Bond is discharged is the final Computation Date. The Issuer selects October 1, 2024 as the first Computation Date but reserves the right to select a different date consistent with the Regulations. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2020-A established under the Bond Resolution. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate, a sample form of which is attached to this Tax Certificate as Exhibit F. "Financed Improvements" means the portion of the Improvements being financed or refinanced with the proceeds of the Bonds and the Original Obligations, as described in the Bond Resolution and on ExhibitD. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Bonds, including amounts used to pay underwriting discount or fees, but excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds other Investment proceeds or transferred proceeds), ( c) any amounts held in a sinking fund for the Bonds, (d) any amounts held in a pledged fund or reserve fund for the Bonds, (e) any other replacement proceeds and (f) any transferred proceeds. Specifically, Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (I) Improvement Fund; (2) Debt Service Account; (3) Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of the Bonds). "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on two or more future dates (e.g., a forward supply contract). "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2020-A established under the Bond Resolution. "Improvements" means all of the property being acquired, developed, constructed, renovated, and equipped by the Issuer using proceeds of the Bonds or the Original Obligations and Qualified Equity, as described on Exhibit D. "Investment" means any security, obligation, annuity contract or other investment-type property that is purchased directly with, or otherwise allocated to, Gross Proceeds. This term does not include a tax- exempt bond, except for "specified private activity bonds" as defined in Code § 57(a)(S)(C), but it does include the investment element of most interest rate caps. "IRS" means the United States Internal Revenue Service. "Issue Date" means April 29, 2020. 3 "Issuer" means the City of Salina, Kansas, and its successors and assigns, or any body, agency or instrumentality of the State succeeding to or charged with the powers, duties and functions of the Issuer. "Management or Service Agreement" means a legal agreement defined in Regulations§ l.141- 3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or a portion of any function of the Financed Improvements, such as a contract to manage the entire Financed Improvements or a portion of the Financed Improvements. However, contracts for services that are solely incidental to the primary governmental function of the Financed Improvements (for example, contracts for janitorial, office equipment repair, billing, or similar services) are not treated as Management or Service Agreements. "Measurement Period" means, with respect to each item of property financed as part of the Financed Improvements with proceeds of the New Money Portion, the period beginning on the later of (a) the Issue Date or (b) the date the property is placed in service and ending on the earlier of (1) the final maturity date of the Bonds or (2) the end of the expected economic useful life of the property, and, with respect to each item of property financed as part of the Financed Facility with proceeds of the Original Obligations, the period beginning on the later of (a) the issue date of the Original Obligations or (b) the date the property was or will be placed in service, and ending on the earlier of ( 1) the final maturity date of the Bonds or (2) the end of the expected economic useful life of the property. "Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Bonds. "Municipal Advisor" means Stifel, Nicolaus & Company, Incorporated, municipal advisor to the Issuer. "Net Proceeds" means when used in reference to the Bonds or the New Money Portion, the sale proceeds (excluding pre-issuance accrued interest), less an allocable share of any proceeds deposited in a reasonably required reserve or replacement fund, plus an allocable share of all Investment earnings on such sale proceeds. "New Money Portion" means the portion of the Bonds described in Section 3.06 together with the remaining Gross Proceeds of the Bonds properly allocable to financing the Improvements, rather than refinancing the Refunded Notes. "Non-Qualified Use" means use of Bond proceeds or the Financed Improvements in a trade or business carried on by any Non-Qualified User. The rules set out in Regulations § 1.141-3 determine whether Bond proceeds or the Financed Improvements are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement with respect to the Financed Improvements, will constitute use under Regulations§ 1.141-3. "Non-Qualified User" means any person or entity other than a Qualified User. "Official Intent Date" means each date that the Issuer adopted a resolution or ordinance declaring the intent of the Issuer to finance any of the Financed Improvements with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Improvements prior to the issuance of those obligations. "Opinion of Bond Counsel" means the written opinion of Bond Counsel to the effect that the proposed action or the failure to act will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. 4 "Original Obligations" means the Issuer's temporary note obligations directly or indirectly refinanced by the Bonds, which were the initial issues of tax-exempt governmental obligations that financed or refinanced a portion of the Financed Improvements. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Bonds, the use of the Financed Improvements and the investment of Gross Proceeds after the Issue Date of the Bonds. "Purchaser" means Robert W. Baird & Co., Inc., Red Bank, New Jersey, the original purchaser of the Bonds, and any successor and assigns. "Qualified Equity" means funds that are not derived from proceeds of a tax-exempt financing that are spent on the Improvements at any time during the period beginning not earlier than the later of (a) 60 days prior to the respective Official Intent Date or (b) three years prior to the Issue Date, and ending not later than the date the respective Improvement is capable of and actually used at substantially its designed level. Qualified Equity excludes an ownership interest in real property or tangible personal property. "Qualified Use Agreement" means any of the following: (a) A lease or other short-term use by members of the general public who occupy the Financed Improvements on a short-term basis in the ordinary course of the Issuer's governmental purposes. (b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Improvements under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Improvements was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Improvements were not constructed for a principal purpose of providing the property for use by that person. 5 "Qualified User" means a state, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States. "Reasonable Retainage" means Gross Proceeds retained by the Issuer for reasonable business purposes, such as to ensure or promote compliance with a construction contract; provided that such amount may not exceed (a) for purposes of the 18-month spending test, 5% of net sale proceeds of the New Money Portion on the date 18 months after the Issue Date, or (b) for purposes of the 2-year spending test, 5% of the Available Construction Proceeds as of the end of the 2-year spending period. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor rebate analyst selected pursuant to this Tax Certificate. "Rebate Fund" means the Rebate Fund for General Obligation Internal Improvement Bonds, Series 2020-A established under the Bond Resolution. "Refunded Notes" means that portion of the Series 2019-1 Notes refunded by the Bonds. "Refunding Portion" means the sale proceeds of the Bonds identified in Section 3.06, together with the remaining Gross Proceeds of the Bonds properly allocable to the refunding of the Refunded Notes. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code§§ 103 and 141through150 and applicable to the Bonds. "Series 2019-1 Notes" means the Issuer's General Obligation Temporary Notes, Series 2019-1, dated April 24, 2019. "State" means the State of Kansas. "Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and supplemented in accordance with its terms. "Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and Procedure, dated June 11, 2012, as amended and supplemented in accordance with the terms of the Tax Compliance Procedure. "Tax-Exempt Bond File" means documents and records for the Bonds and the Original Obligations, maintained by the Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Bonds. "Yield" means the yield on the Bonds, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations § 1.148-5. 6 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.01 Representations and Covenants of the Issuer. The Issuer represents and covenants as follows: (a) Organization and Authority. The Issuer: (I) is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; (2) has lawful power and authority to issue the Bonds for the purposes set forth in the Bond Resolution, to enter into, execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate and to carry out its obligations under this Tax Certificate and under such documents; and (3) by all necessary action has been duly authorized to execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate, acting by and through its duly authorized officials. (b) Tax-Exempt Status of Bonds-General Covenant and Allocation of Proceeds to Financed Improvements. (1) The Issuer (to the extent within its power or direction) will not use any money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other source, in a manner that would cause the Bonds to be "arbitrage bonds," within the meaning of Code§ 148, and will not (to the extent within its power or direction) otherwise use or permit the use of any Bond proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Bonds to be included in gross income for federal income tax purposes. (2) The Issuer will account for the expenditure of the Bond proceeds and Qualified Equity for the Improvements as described in Section 4.02. For purposes of the following covenants related to the use of the Financed Improvements, any Non-Qualified Use shall be treated as first allocated entirely to the portion of the Improvements financed with Qualified Equity, and then only to the extent of any excess, to the portion of the Improvements financed with Bond proceeds (that is, the Financed Improvements). (c) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: (1) all of the Financed Improvements have been and are expected to be owned by the Issuer or another Qualified User; (2) no portion of the Financed Improvements have been or are expected to be used in a Non-Qualified Use; and (3) the Issuer will not permit any Non-Qualified Use of the Financed Improvements without first consulting with Bond Counsel. The Issuer will monitor the usage of all portions of the Financed Improvements during the Measurement Period and will take any action or refrain from any action (which may include "remedial action" in accordance with Regulations § 1.141-12, which could involve redemption or defeasance of all or a portion of the Bonds), as specified in advice of Bond Counsel, as necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. ( d) Governmental Obligations-Private Security or Payment. As of the Issue Date, the Issuer expects that none of the principal of and interest on the Bonds will be, and none of the payment of principal of and interest on the Refunded Notes and on all other obligations which directly or indirectly refinanced the Original Obligations has been, (under the terms of the Bonds or any underlying arrangement) directly or indirectly: 7 (1) secured by (i) any interest in property used or to be used for a Non-Qualified Use, or (ii) any interest in payments in respect of such property; or (2) derived from payments (whether or not such payments are made to the Issuer) in respect of property, or borrowed money, used or to be used for a Non-Qualified Use. For purposes of the foregoing, taxes of general application, including payments in lieu of taxes, are not treated as private payments or as private security. The Issuer will not permit any private security or payment with respect to the Bonds without first consulting with Bond Counsel. (e) No Private Loan. Not more than 5% of the net proceeds of the Bonds will be loaned directly or indirectly to any Non-Qualified User. (f) Management or Service Agreements. As of the Issue Date, the Issuer has not entered into any Management or Service Agreements with Non-Qualified Users. During the Measurement Period, the Issuer will not enter into or renew any Management or Service Agreement with any Non-Qualified User without first consulting with Bond Counsel. (g) Leases. As of the Issue Date, the Issuer has not entered into any leases of any portion of the Financed Improvements. During the Measurement Period, the Issuer will not enter into or renew any lease or similar agreement or arrangement other than a Qualified Use Agreement without first consulting with Bond Counsel. (h) Limit on Maturity of Bonds. A list of the assets included in the Financed Improvements and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Bonds is 6.7219 years, as computed by Bond Counsel and shown on Exhibit A, does not exceed 120% of the average reasonably expected economic life of the Financed Improvements. (i) Expenditure of Bond Proceeds. (I) Accounting for Expenditures. The Issuer will evidence each allocation of the proceeds of the Bonds and Qualified Equity for the Improvements to an expenditure in writing. No allocation will be made more than 18 months following the later of (i) the date of the expenditure or (ii) the date the Financed Improvements were placed in service. (2) Reimbursement of Expenditures; Official Intent. On each Official Intent Date, the governing body of the Issuer adopted a resolution declaring the intent of the Issuer to finance the Financed Improvements with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Improvements prior to the issuance of those obligations. The resolutions are contained in Tabs 1 to 5 of the Transcript. The Issuer expects to allocate proceeds of the Bonds in the amount of $507,962.03 to reimburse expenditures paid prior to the Issue Date. Each such reimbursement allocation meets all of the following requirements: (A) no proceeds of the Bonds will be used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the relevant resolution referenced above was adopted, (B) no reimbursement allocation will be made for an expenditure made more than three years prior to the date of the reimbursement allocation, and (C) no reimbursement allocation will be made more than 18 months following the later of the date of the expenditure or the date the Financed Improvements were placed in service. 8 G) Registered Bonds. The Bond Resolution requires that all of the Bonds will be issued and held in registered form within the meaning of Code§ 149(a). (k) Bonds Not Federally Guaranteed. The Issuer will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code§ 149(b). (1) IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038- G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of filing will be included in Exhibit B of this Tax Certificate. (m) No Hedge Bonds. At least 85% of the net sale proceeds (the sale proceeds of the New Money Portion less any sale proceeds invested in a reserve fund) of the New Money Portion will be used to carry out the governmental purpose of the New Money Portion within three years after the Issue Date, and not more than 50% of the proceeds of the New Money Portion will be invested in Investments having a substantially guaranteed Yield for four years or more. At least 85% of the net sale proceeds (the sale proceeds of the Original Obligations less any sale proceeds invested in a reserve fund) of each issue comprising the Original Obligations were or will be used to carry out the governmental purpose of the Original Obligations within three years after the respective issue date of the Original Obligations, and not more than 50% of the proceeds of the Original Obligations were or will be invested in Investments having a substantially guaranteed Yield for four years or more. (n) Single Issue; No Other Issues. The Bonds constitute a single "issue" under Regulations § 1.150-1 ( c ). No other debt obligations of the Issuer (I) are being sold within 15 days of the sale of the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). For purposes of the foregoing, simultaneously with the Bonds, the Issuer sold its General Obligation Temporary Notes, Series 2020-1, which are not part of the same plan of financing as the Bonds and are not expected to be paid from substantially the same sources of funds as the Bonds, and therefore are not part of the same "issue" as the Bonds under Regulations§ 1.150-l(c). A separate Federal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance of these notes. ( o) Interest Rate Swap. As of the Issue Date, the Issuer has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Bonds or the Refunded Notes. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. (p) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enter into a Guaranteed Investment Contract for any Gross Proceeds of the Bonds. The Issuer will be responsible for complying with Section 4. 04( d) hereof if it decides to enter into a Guaranteed Investment Contract at a later date. (q) Bank Qualified Tax-Exempt Obligation. The Bonds are not "qualified tax-exempt obligations" under Code § 265(b )(3). (r) Compliance with Future Tax Requirements. The Issuer understands that the Code and the Regulations may impose new or different restrictions and requirements on the Issuer in the future. The 9 Issuer will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 2.02 Survival of Representations and Covenants. All representations, covenants and certifications contained in this Tax Certificate or in any certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution and delivery of such documents and the issuance of the Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Bonds. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.01 General. The purpose of this Article III is to certify, under Regulations § l.148- 2(b ), the Issuer's expectations as to the sources, uses and investment of Bond proceeds and other money, in order to support the Issuer's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Bonds. Section 3.02 Reasonable Expectations. The facts, estimates and expectations set forth in this Article III are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.03 Purpose of Financing. The Bonds are being issued for the purpose of providing funds to pay: (a) a portion of the costs of the Improvements; (b) a portion of the costs of retiring the Refunded Notes in order to provide permanent financing; and ( c) costs of issuance. Section 3.04 Funds and Accounts. The following funds and accounts have been established under the Bond Resolution: (a) Improvement Fund; (b) Debt Service Account; and ( c) Rebate Fund. Section 3.05 Amount and Use of Bond Proceeds and Other Monies. (a) Amount of Bond Proceeds. The total proceeds to be received by the Issuer from the sale of the Bonds will be as follows: 10 Principal Amount Net Original Issue Premium Less Underwriting Discount Total Proceeds Received by Issuer $5,210,000.00 240,610.40 (38,938.55) $5,411,671.85 (b) Use of Bond Proceeds. The Bond proceeds (net an underwriting discount of $38,938.55) are expected to be allocated to expenditures as follows: ( 1) All accrued interest, if any, will be deposited in the Debt Service Account and used to pay interest on the Bonds. (2) $5,411,671.85 will be deposited in the Improvement Fund, to be further allocated as follows: (A) $65,945.92 will be used to pay the costs of issuing the Bonds; (B) $4,755,991.04 will be transferred to the paying agent for the Refunded Notes and will be used to pay a portion of the principal of and interest on the Refunded Notes; and (C) the balance of$589,734.89 will be used to pay or reimburse the Issuer for costs of the Financed Improvements. (c) Use of Other Money. Unspent proceeds of the Refunded Notes in the amount of $884,766.83 will be transferred to the paying agent for the Refunded Notes and will be used to pay a portion of the principal of and interest on the Refunded Notes. Section 3.06 Multipurpose Issue. Pursuant to Regulations § 1.148-9(h), the Issuer is applying the arbitrage rules to separate financing purposes of the issue that have the same initial temporary period as if they constitute a single issue for purposes of applying the arbitrage rules. Under Regulations § 1.148- 9(h), the Bonds will be treated as two separate issues (a New Money Portion and a Refunding Portion) for purposes of applying certain of the arbitrage restrictions under Code § 148. Section 3.07 Current Refunding. (a) Proceeds Used for Current Refunding. Proceeds of the Bonds will be used to pay principal of and interest on the Refunded Notes. All such proceeds shall be spent not later than 90 days after the Issue Date. (b) Transferred Proceeds. As of the Issue Date, unspent proceeds (sale proceeds, Investment proceeds or transferred proceeds) of the Refunded Notes remain in the improvement fund therefor, which amount will be used, along with Bond proceeds, to pay the principal of and interest on the Refunded Notes. Therefore, upon discharge of the Refunded Notes, there will be no remaining unspent proceeds of the Refunded Notes, and thus no "transferred proceeds" of the Bonds (determined in accordance Regulations § 1.148-9(b)). Section 3.08 Completion of Financed Improvements -New Money Portion. The Issuer has incurred, or will incur within six months after the Issue Date, a substantial binding obligation to a third party to spend at least 5% of the Net Proceeds of the New Money Portion on the Financed Improvements. The completion of the Financed Improvements and the allocation of the Net Proceeds of the New Money 11 Portion to expenditures will proceed with due diligence. At least 85% of the Net Proceeds of the New Money Portion will be allocated to expenditures on the Financed Improvements within three years after the Issue Date. Section 3.09 Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Bonds. Such payments will be deposited into the Debt Service Account. Except for the Debt Service Account, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds has been established or is expected to be established. The Debt Service Account is used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Issuer expects that the Debt Service Account will qualify as a Bona Fide Debt Service Fund. Section 3.10 Reserve, Replacement and Pledged Funds. (a) No Reserve Fund. No reserve fund has been or will be established for the Bonds. (b) No Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements or refund the Refunded Notes, and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt Service Account, there are no other funds pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Bonds if the Issuer encounters financial difficulty. Section 3.11 Purpose Investment Yield. The proceeds of the Bonds will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.12 Issue Price and Yield on Bonds. (a) Issue Price. Based on the Purchaser's certifications in Exhibit C-1 and the Municipal Advisor's certifications in Exhibit C-2, the Issuer hereby elects to establish the issue prices of the Bonds pursuant to Regulations§ l.148-l(f)(2)(iii) (relating to the so-called "competitive sales rule"). Therefore, the aggregate issue price of the Bonds for such purpose is $5,450,610.40. (b) Bond Yield. Based on the issue price, the Yield on the Bonds is 1.8111 %, as computed by Bond Counsel as shown on Exhibit A. The Issuer has not entered into an interest rate swap agreement with respect to any portion of the proceeds of the Bonds. Section 3.13 Miscellaneous Arbitrage Matters. (a) No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between tax- exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax- exempt bond market. (b) No Over-Issuance. The sale proceeds of the Bonds, together with expected Investment earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Bonds as described above. 12 Section 3.14 Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Certificate, the Issuer does not expect that the Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code§ 148 and the Regulations. ARTICLE IV POST-ISSUANCE TAX COMPLIANCE Section 4.01 General. (a) Purpose of Article. The purpose of this Article is to supplement the Tax Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Issuer recognizes that interest on the Bonds will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post-Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with tax- exempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to the Post-Issuance Tax Requirements that the Issuer has established. The provisions of this Tax Certificate are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern. (c) Bond Compliance Officer. The Issuer, when necessary to fulfill the Post-Issuance Tax Requirements, will, through its Bond Compliance Officer, sign Form 8038-T in connection with the payment of arbitrage rebate or yield reduction amounts, participate in any federal income tax audit of the Bonds or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a remedial action procedure pursuant to Regulations § 1.141-12. In each case, all costs and expenses incurred by the Issuer shall be treated as a reasonable cost of administering the Bonds and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Bond Resolution or State law. 13 Section 4.02 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements. (a) Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File for the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in advice or a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (A) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (B) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (C) exhibit a high degree of legibility and readability both electronically and in hardcopy, (D) provide support for other books and records of the Issuer and (E) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Issuer's premises. (b) Accounting and Allocation of Bond Proceeds and Qualified Equity to Expenditures. The Bond Compliance Officer will account for the investment and expenditure of Bond proceeds in the level of detail required by the Tax Compliance Procedure. The expected allocation of the proceeds of the Bonds and Qualified Equity to expenditures for the Improvements is set forth on Exhibit D. The Bond Compliance Officer will supplement the expected allocation of Bond proceeds and Qualified Equity to expenditures with a Final Written Allocation as required by the Tax Compliance Procedure. The Final Written Allocation will also evidence the allocation of proceeds of the Original Obligations to the Financed Improvements. A sample form of Final Written Allocation is attached as Exhibit F. (c) Annual Compliance Checklist. Attached as Exhibit Eis a sample Annual Compliance Checklist for the Bonds. The Bond Compliance Officer will prepare and complete an Annual Compliance Checklist for the Financed Improvements at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer will take the actions identified in advice of Bond Counsel or as described in the Tax Compliance Procedure to correct any deficiency. (d) Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining and delivering to the Issuer any advice or Opinion of Bond Counsel required by this Tax Certificate or the Annual Compliance Checklist. Section 4.03 Temporary Periods/ Yield Restriction. Except as described below, Gross Proceeds must not be invested at a Yield greater than the Yield on the Bonds: (a) Improvement Fund-New Money Portion. Bond proceeds deposited in the Improvement Fund allocable to the New Money Portion and investment earnings on such proceeds may be invested without Yield restriction for up to three years following the Issue Date. If any such unspent proceeds remain in the Improvement Fund after three years, those amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations § 1.148-S(c), regardless of whether the Bonds are exempt from the arbitrage rebate or yield reduction amounts requirements of Code§ 148. (b) Improvement Fund -Refunding Portion. Bond proceeds deposited in the Improvement Fund allocable to a current refunding of the Refunded Notes (see Section 3.07) may be invested without Yield restriction for up to 90 days after the Issue Date. 14 (c) Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for one year after the date of receipt of such earnings. (d) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. ( e) Rebate Fund. Money, other than sale proceeds or Investment proceeds, on deposit in the Rebate Fund may be invested without Yield restriction. (f) Transferred Proceeds. Any unexpended proceeds of the Refunded Obligations that become transferred proceeds of the Bonds (as explained in Section 3.7(b)) may continue to be invested without Yield restriction for up to three years following the applicable issue date of the Original Obligations. If any unspent proceeds remain after such time, such amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations § 1.148-5( c ). These payments are required whether or not the Refunded Obligations are exempt from the arbitrage rebate requirements of Code§ 148. Section 4.04 Procedures for Establishing Fair Market Value. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with Regulations§ 1.148-5. (b) Established Securities Market. Except for Investments purchased for a Yield-restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code § 1273 ), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using one of the paragraphs below. The fair market value oflnvestments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations § 1.148-5. (c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if ( 1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. ( d) Guaranteed Investment Contracts. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: (i) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media 15 that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (ii) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the Yield or the cost of the Guaranteed Investment Contract. (iii) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (A) that the potential provider did not consult with any other potential provider about its bid, (B) that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the Issuer or any other person (whether or not in connection with the bond issue), and (C) that the bid is not being submitted solely as a courtesy to the Issuer or any other person, for purposes of satisfying the requirements of the Regulations. (iv) The terms of the bid specifications are "commercially reasonable." A term is commercially reasonable ifthere is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (v) The terms of the solicitation take into account the Issuer's reasonably expected deposit and draw-down schedule for the amounts to be invested. (vi) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (vii) At least three "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of Investments being purchased. (2) Bids Received. The bids received must meet all of the following requirements: (i) At least three bids are received from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (A) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the Issue Date of the issue, (B) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue, and (C) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (ii) At least one of the three bids received is from a reasonably competitive provider, as defined above. 16 (iii) If an agent or broker is used to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. (3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. (5) Records. The Issuer retains the following records with the Bond documents until three years after the last outstanding Bond is redeemed: (A) A copy of the Guaranteed Investment Contract. (B) The receipt or other record of the amount actually paid by the Issuer for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Issuer, and the certification as to fees paid, described in paragraph (d)(4) above. (C) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (D) The bid solicitation form and, if the terms of the Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: (1) at least three bids on the Investment must be received from persons with no financial interest in the Bonds (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.05 Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. A portion of the Gross Proceeds of the Bonds may be exempt from rebate pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Bonds and will not otherwise affect the application of the Investment limitations described in Section 4. 03. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4. 06 applies even if a portion of the Gross Proceeds of the Bonds is exempt from the rebate requirement. To the extent all or a portion of the Bonds is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.06. The Issuer may defer the final rebate Computation Date and the payment ofrebate for the Bonds to the extent permitted by Regulations §§ 1.148-7(b )(1) and 1.148-3( e )(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. 17 (I) The Issuer expects that at least 75% of the Available Construction Proceeds will be used for construction or rehabilitation expenditures for property owned by the Issuer. (2) The following optional rebate spending exceptions can apply to the New Money Portion, the Refunding Portion and the transferred proceeds of the Original Obligations: New Money Portion: (A) 6-month spending exception (Code § 148(f)(4)(B) and Regulations § 1.148-7(c)). (B) (C) 18-month spending exception (Regulations § 1.148-?(d)). 2-year spending exception (Code § l 48(f)( 4)(C) and Regulations § 1.148- 7(e)). Refunding Portion: 6-month spending exception (Code § 148(f)(4)(B) and Regulations§ 1.148-7(c)). Transferred proceeds of the Original Obligations: 6, 18, or 24-month spending exception (Regulations § 1.148-7(b )(1 )(i)) in accordance with the applicable federal tax certificate for the Original Obligations. (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. ( d) Bona Fide Debt Service Fund. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, Investment earnings in the Debt Service Account cannot be taken into account in computing arbitrage rebate and yield reduction amounts (I) with respect to such portion that meets the 6-month, 18-month or 2-year spending exception, or (2) for a given Bond Year, if the gross earnings on the Debt Service Account for such Bond Year are less than $100,000. If the average annual debt service on the Bonds does not exceed $2,500,000, the $100,000 earnings test may be treated as satisfied in every Bond Year. (e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Issuer must continue to comply with Section 4.06. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met: (I) Using Adjusted Gross Proceeds or Available Construction Proceeds to pay principal of any Bonds is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The six-month spending exception generally is met if all Adjusted Gross Proceeds of the New Money Portion or the Refunding Portion, as applicable, are spent within six months following the Issue Date. The test may still be satisfied even ifup to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within one year of the Issue Date. (3) The 18-month spending exception generally is met if all Adjusted Gross Proceeds of the New Money Portion are spent in accordance with the following schedule: 18 Time Period After the Issue Date 6 months 12 months 18 months (Final) Minimum Percentage of Adjusted Gross Proceeds Spent 15% 60% 100% (4) The 2-year spending exception generally is met if all Available Construction Proceeds are spent in accordance with the following schedule: Time Period After the Issue Date 6 months 12 months 18 months 24 months (Final) Minimum Percentage of Available Construction Proceeds Spent 10% 45% 75% 100% (5) For purposes of applying the 18-month and 2-year spending exceptions only, the failure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to complete the Financed Improvements and the failure does not exceed the lesser of 3% of the aggregate issue price the New Money Portion or $250,000. No such exception applies for any other spending period. (6) For purposes of applying the 18-month and 2-year spending exceptions only, the Bonds meet the applicable spending test even if, at the end of the final spending period, proceeds not exceeding a Reasonable Retainage remain unspent, so long as such Reasonable Retainage is spent within 30 months after the Issue Date in the case of the 18-month exception or 3 years after the Issue Date in the case of the 2-year spending exception. (7) Spending exceptions may be applied separately to the New Money Portion and the Refunding Portion of the Bonds. Section 4.06 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts. (a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment reports relating to each fund held by it that contains Gross Proceeds of the Bonds together with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other than the Issuer annually as of the end of each Bond Year and not later than ten days following each Computation Date. Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Bonds, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) 19 frequency of interest payments, (8) disposition price, (9) any accrued interest received, and ( 10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Issuer together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate and yield reduction amounts were determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. (c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to the United States the rebate and yield reduction amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 (d) Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst, then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. (e) Filing Requirements. The Issuer will file or cause to be filed with the IRS such reports or other documents as are required by the Code in accordance with advice of Bond Counsel. (f) Survival after Defeasance. Notwithstanding anything in the Bond Resolution to the contrary, the obligation to pay arbitrage rebate and yield reduction amounts to the United States will survive the payment or defeasance of the Bonds. ARTICLEV MISCELLANEOUS PROVISIONS Section 5.01 Term of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Bonds and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Bonds have been fully paid and all such Bonds are cancelled; provided that the provisions of Article IV of this Tax Certificate regarding payment of arbitrage rebate and yield reduction amounts and all related penalties and interest will remain in effect until all such amounts are paid to the United States and the provisions of Section 4.02 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.02 Amendments. This Tax Certificate may be amended from time to time by the Issuer without notice to or the consent of any of the Bondowners, but only if such amendment is in writing and is accompanied by an Opinion of Bond Counsel to the effect that, under then-existing law, assuming compliance with this Tax Certificate as so amended and the Bond Resolution, such amendment will not cause interest on any Bond to be included in gross income for federal income tax purposes. No amendment will become effective until the Issuer receives an Opinion of Bond Counsel, addressed to the Issuer that the 20 amendment will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 5.03 Opinion of Bond Counsel. The Issuer may deviate from the provisions of this Tax Certificate if furnished with an Opinion of Bond Counsel to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. The Issuer further agrees to comply with any further or different instructions provided in an Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Bonds or the exclusion from gross income of interest on the Bonds. Section 5.04 Reliance. In delivering this Tax Certificate the Issuer is making only those certifications, representations and agreements as are specifically attributed to them in this Tax Certificate. The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations are reasonable. The Issuer understands that its certifications will be relied upon by Bond Counsel in rendering its opinion as to the validity of the Bonds and the exclusion from federal gross income of the interest on the Bonds. Section 5.05 Severability. If any provision in this Tax Certificate or in the Bonds is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired. Section 5.06 Benefit of Certificate. This Tax Certificate is binding upon the Issuer, its respective successors and assigns, and inures to the benefit of the Issuer and the owners of the Bonds. Nothing in this Tax Certificate, the Bond Resolution or the Bonds, express or implied, gives to any person, other than the Issuer, its successors and assigns, and the owners of the Bonds, any benefit or any legal or equitable right, remedy or claim under this Tax Certificate. Section 5.07 Default, Breach and Enforcement. Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the Bondowners pursuant to the terms of the Bond Resolution or any other document which references this Tax Certificate and gives remedies for a misrepresentation or breach thereof. Section 5.08 Governing Law. This Tax Certificate will be governed by and construed in accordance with the laws of the State. Section 5.09 Electronic Transactions. The transactions described in this Tax Certificate may be conducted, and related documents may be stored, by electronic means. All closing documents, certificates, and related instruments may be executed by electronic transmission. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 5.10 Execution in Counterparts. This Tax Certificate may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute the same instrument. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 21 THE UNDERSIGNED, Mayor, Clerk and Finance Director of the Issuer, by their execution of this Tax Certificate hereby make the foregoing certifications, representations, and agreements contained in this Tax Certificate on behalf of the Issuer, as of the Issue Date. CITY OF SALINA, KANSAS -~~ / / By: ·._.- Michael L. Hoppock, By: Shandi Wicks, CMC, City Clerk By: Debbie Pack, Finance Director (Signature Page to Federal Tax Certificate -2020-A Bonds) EXHIBIT A DEBT SERVICE SCHEDULE AND PROOF OF YIELD $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 A-1 Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. SOURCES AND USES OF FUNDS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Sources: Bond Proceeds: Dated Date Delivery Date Par Amount Original Issue Discount Premium Other Sources of Funds: 04/29/2020 04/29/2020 Remaining Temporary Note Proceeds Uses: Project Fund Deposits: Project Costs Refunding Escrow Deposits: Cash Deposit Delivery Date Expenses: Cost of Issuance Underwriter's Discount 5,210,000.00 (6,097.20) 246,707.60 5,450,610.40 884,766.83 6,335,377.23 589,734.89 5,640, 757 .87 65.945.92 38,938.55 I 04.884.47 6,335,377.23 (Finance 8.500) Page I This information is provided based on tbe facrual infonuation and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed transaction. Tb.is infonnation is intended to provide facnial infonnalion only and is provided in conjunction with our legal representation. It is not intended as financic:tl advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not n financial advisor or a .. municipal advisor" as defined in the Securities ExchanJZ;e Act of 1934, as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. (Finance 8.500) Page 2 BOND DEBT SERVICE City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Period Annual Bond Total Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 0412912020 5,210,000 5,2 I 0,000 04/01 /2021 131 ,820.13 131,820.13 5,2 I 0,000 5,210,000 I 0/01 /2021 495,000 3.000% 71 ,468.75 566,468.75 698,288.88 4.715,000 4,715.000 04/01 /2022 64,043.75 64,043.75 4,715 ,000 4,715.000 I 010112022 580,000 3.000% 64,043.75 644,043.75 708.087.50 4,135,000 4, 135.000 04/01/2023 55,343.75 55,343.75 4,135,000 4,135.000 I 0/01 /2023 595,000 3.000% 55,343.75 650,343.75 705,687.50 3,540,000 3,540,000 0410112024 46,4 18.75 46,418.75 3,540,000 3,540.000 I 0/01 /2024 610,000 3.000% 46,418.75 656,418.75 702,837.50 2,930,000 2,930,000 0410112025 37,268.75 37,268.75 2,930,000 2,930.000 I 0/01/2025 630,000 3.000% 37,268.75 667,268.75 704,537.50 2,300,000 2,300,000 0410112026 27,818.75 27,818.75 2,300,000 2,300.000 I 0/01/2026 215,000 3.000% 27,818.75 242,818.75 270,637.50 2,085,000 2,085,000 04/01/2027 24,593.75 24,593.75 2,085,000 2,085.000 I 0/01/2027 225,000 3.000% 24,593.75 249,593.75 274, 187.50 1,860,000 1,860,000 04101/2028 21 ,218.75 21 ,218.75 1,860,000 1,860,000 I 0/01/2028 230,000 3.000% 21 ,2 I 8.75 251,218.75 272,437.50 1,630,000 1,630.000 0410112029 17,768.75 17,768.75 1,630,000 1,630,000 10/01/2029 235,000 2.000% I 7,768.75 252,768.75 270,537.50 1,395,000 1,395.000 04/01/2030 15,418.75 15,418.75 1,395,000 1,395,000 10/01/2030 245,000 2.000% I 5,4 I 8.75 260,418.75 275.837.50 1,150,000 1,150.000 04/01/203 I 12,968.75 12,968.75 1,150,000 I, I 50,000 I 010112031 220,000 2.000% 12,968.75 232,968.75 245,937.50 930,000 930.000 04/01/2032 10,768.75 I 0,768.75 930,000 930,000 10/01/2032 225,000 2.125% 10,768.75 235,768.75 246.537.50 705 ,000 705.000 04/01/2033 8,378.12 8,378. 12 705,000 705,000 10/01/2033 230,000 2.250% 8,378.12 238 ,378. 12 246,756.24 475,000 475,000 04/01/2034 5,790.62 5,790.62 475,000 475,000 I 0/01/2034 235,000 2.375% 5,790.62 240,790.62 246,581 .24 240,000 240,000 04/01/2035 3,000.00 3,000.00 240,000 240.000 10/01/2035 240,000 2.500% 3,000.00 243,000.00 246,000.00 5,210,000 904,888.86 6, I I 4,888.86 6, I I 4,888.86 This infonuation is provided based on the facrual information and assumptions provided to Gilmore & Bell. P.C. by a pa.ny to or a representative of a party to the proposed transaction. This infonnation is intended to provide facnial infonnation only and is provided in conjunction with our legal representation. It is no! intended as financ.ial advice or a financial recouunendation to any p."Uty. Gilmore & Bell P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities ExchanJl,e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. BOND PRICING City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Man1rity Bond Component Date Amount Rate Serial Bonds: 10/01/2021 495.000 3.000% 10/01/2022 580,000 3.000% 10/01/2023 595,000 3000% 10/01/2024 610,000 3.000% 10/01 /2025 630.000 3.000% 10/01/2026 215,000 3.000% 10/01/2027 225.000 3.000% 10/01 /2028 230,000 3000% 10/01/2031 220.000 2000% 10/01/2032 225.000 2.125% 10/01/2033 230,000 2.250% 10/01/2034 235.000 2.375% 10/01/2035 240,000 2.500% 4,730,000 Tenn Bond 2030: 10/01/2029 235.000 2.000% I 0/0112030 245,000 2.000% 480,000 5.210,000 Dated Date Delivery Date First Coupon Par .AJnount Premium Production Underwriter's Discount Purchase Price Accrned Interest Net Proceeds Yield 1.050% 1.050% 1.150% 1.200% 1.300% 1.400% 1.500% 1.650% 2.100% 2.200% 2.300% 2.400% 2.500% 2 000% 2.000% Price 102.745 104.65 1 106.190 107.729 108.871 109.793 110.498 109393 c 98.988 99.187 99.424 99.695 100.000 100.000 100.000 0412912020 04/2912020 04/01/2021 5.210,000.00 240.610.40 5.450,610.40 (38,938.55) 5,41 1.671.85 5.411.671.85 Yield to Call Maturity Date 1.793% 10/01/2027 104.618242% (0.747381%) 103.870861% Call Price 100.000 (Finance 8.500) Page 3 Premium (-Discount) 13.587.75 26,975.80 36,830.50 47,146.90 55.887 30 21,054.95 23.620.50 21,603.90 (2,226.40) {1 ,829.25) (1,324.80) (716.75) 240.610.40 240.610.40 This infonnation is provided based on the facrual infonuation and assumptions provided to Gilmore & Bell. P .C. by a party to or a representative of a party to the proposed transaction. This infonuation is intended to provide facn1al infonnation only and is provided in conjunction ·with our legal representation. It is not intended as financial advice or a finandal recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a •·municipal advisor" as defined in the Securities Exchange Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Dated Date Delivery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Weighted Average Maturity (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedo\>m Other Fee Total Underwriter's Discount Bid Price Bond Component Serial Bonds Term Bond 2030 Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost of Issuance Expense -Other Amounts Target Value Target Date Yield Par Value 4, 730,000.00 480,000.00 5,210,000.00 TIC 5,210.000.00 240.610.40 (38,938.55) 5,411,671.85 04/29/2020 1.935153% Price 105.087 100.000 04/29/2020 04/29/2020 I 0/01/2035 1.811I13% 1.935153% 1.980905% 2.136252% 2.548999% 6.814 6.722 6.176 5,210.000.00 5,450,6 I 0.40 904,888.86 703,217.01 35,499,777.78 35,499.777.78 6, 114,888.86 708,087.50 396,498.56 7.473810 7.473810 I 03.870861 Average Coupon 2.634% 2.000% All-In TIC 5,210,000.00 240,610.40 (38,938.55) (65,945.92) 5,345, 725.93 04/29/2020 2.136252% (Finance 8.500) Page 4 Average Life 6.497 9.933 6.814 Arbitrage Yield 5,210,000.00 240,6 10.40 5.450,610.40 04/29/2020 1.811113% This information is provided based on the factual infonuation and assumptions provided to Gilmore & Be IL P.C. by a party to or a representative of a party to U1e proposed transac1ion. This infonuation is intended to provide facn1al infonnation only and is provided in conjunction witb our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a •·municipal advisor'' as defined in the Securities Exchan~e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A PY Date Debt Service Factor 04/01/2021 131 ,820.13 0.983510156 10/01/2021 566.468.75 0.974683843 04/01/2022 64,043.75 0.965936740 10/01/2022 644,043.75 0.957268136 04/01/2023 55,343.75 0.948677327 10/01/2023 650,343.75 0.940163614 04/01/2024 46,418.75 0.931726306 10/01/2024 656,418.75 0.923364717 04101/2025 37,268.75 0.915078167 10/01/2025 667,268.75 0.906865983 04101/2026 27,818.75 0.898727497 10/01/2026 242,818.75 0.890662049 04/01/2027 24,593.75 0.882668983 10/01/2027 479.593.75 0.874 74 7649 04/01/2028 17,768.75 0.866897403 10/01/2028 17,768.75 0.859117607 04/01 /2029 17,768.75 0.851407630 10/01/2029 252.768.75 0.843766845 04101/2030 15,418. 75 0.836194630 1010 I /2030 260.418.75 0.828690370 04/01/2031 12,968.75 0.821253456 I 0/01/2031 232.968.75 0.813883283 04/01/2032 10,768.75 0.806579252 10/01 /2032 235.768.75 0.799340770 04/01/2033 8.378.12 0.792167248 I 0/01/2033 238,378.12 0.785058103 04/01/2034 5.790.62 0.778012758 10/01/2034 240,790.62 0.771030640 04/01/2035 3.000.00 0.764111181 I 0/01/2035 243,000.00 0.757253820 6, I 07,988.86 Proceeds Summarv Delivery date Par Value Premium (Discount) Target for yield calculation Present Value to 04/29/2020 @ 1.8111130125% 129,646.44 552.127.94 61,862.21 616,522.56 52,503 .36 611 ,429.53 43,249.57 606,113.91 34,103.82 605,123.33 25,001.48 216,269.45 21 ,708.14 419,523.51 15,403.68 15,265.45 15, 128.45 213,277.89 12,893.08 215.806.51 10,650.63 189.609.37 8,685.85 188.459.57 6,636.87 187,140.67 4,505.18 185,656.95 2,292.33 184,012.68 5,450,610.40 04/29/2020 5,210,000.00 240,610.40 5.450,610.40 (Finance 8.500) Page 5 This infonnation is provided based on the facrual inforuunion and assumptions provided ro Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed transection. This infonnation is intended to provide fact11al infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any part)•. Gilmore & Bell, P.C. is not a financial advisor or a •·municipal advisor" as defined in the Securities Exc.banJZ;e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. (Finance 8.500) Page 6 Bond Component SERIAL Bond Component SERIAL Maturity Date 10101 /2028 PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Maturity Date I 0/01 /2028 Rate 3.000% Assumed Call/Computation Dates for Premium Bonds Call Rate Yield Date 3.000% 1.650% I 0/01 /2027 Call Price 100.000 Yield To Call/Maturity 1.648891 % Rejected Call/Computation Dates for Premium Bonds Yield Call Date Call Price Yield To Call/Maturity Increase to Yield 1.650% 1.7921493% 0.1432583% This infonnation is provided based on the facruaJ infom1ation and assumptions provided to Gilmore & Bell. P.C. by a pany to or a representAtive of a party to the proposed transaction. This infonnation is intended to provide facnial infonnation only and is provided in conjunction with our legal representation. 11 is not intended as financial advice or a financial recommcnda1ion to any party. Gilmore & Bell, P.C. is not a financial advisor or a •·municipal advisor"' as defined in the Securities Exchange Acl of 1934, as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. FORM 8038 STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Dated Date Delivery Date 04/29/2020 04/29/2020 Bond Component Date Principal Coupon Serial Bonds: 10/01/2021 495.000.00 3.000% 10/01/2022 580,000.00 3.000% 10/01/2023 595.000.00 3.000% 10/01/2024 610,000.00 3.000% 10/01/2025 630.000.00 3.000% 10/01/2026 215,000.00 3.000% 10/01/2027 225.000.00 3.000% 10/01/2028 230,000.00 3.000% 10/01/2031 220.000.00 2.000% 10/01/2032 225,000.00 2.125% 10/01/2033 230,000.00 2.250% 10/01/2034 235.000.00 2.375% 10/01/2035 240,000.00 2.500% Term Bond 2030: 10/01/2029 235.000.00 2.000% 10/01/2030 245,000.00 2.000% 5,210,000.00 Maturity Interest Issue Date Rate Price Final Maturity 10/01/2035 2.500% 240,000.00 Entire Issue 5,450.610.40 Proceeds used for accrued interest Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to refund prior tax-exempt bonds Proceeds used to refund prior taxable bonds Remaining WAM of prior tax-exempt bonds (years) Remaining WAM of prior taxable bonds (years) Last call date of refunded tax-exempt bonds 2011 Form 8038 Statistics Proceeds used to currently refund prior issues Proceeds used to advance refund prior issues Remaining weighted average maturity of the bonds to be currently refunded Remaining weighted average maturity of the bonds to be advance refunded Price 102.745 104.651 106.190 107.729 108.871 109.793 110.498 109.393 98.988 99.187 99.424 99.695 100.000 100.000 100.000 Stated Redemption at Maturity 240,000.00 5.210,000.00 Issue Price 508.587.75 606,975.80 631,830.50 657,146.90 685.887.30 236,054.95 248.620.50 251,603.90 217,773.60 223,170.75 228,675.20 234,283.25 240,000.00 235.000.00 245,000.00 5,450,610.40 Weighted Average Maturity 6.7219 (Finance 8.500) Page 7 Redemption at Maturity 495,000.00 580,000.00 595,000.00 610,000.00 630,000.00 215,000.00 225,000.00 230,000.00 220,000.00 225,000.00 230,000.00 235,000.00 240,000.00 235,000.00 245,000.00 5.210,000.00 Yield 1.8111% 0.00 104,884.47 0.00 0.00 5.640,757.87 0.00 0.0056 0.0000 5,640,757.87 0.00 0.0056 0.0000 This information is provided based on the factual information and assumptions provided to Gilmore&: Belt P.C by B party to or a representative of a party to the proposed transaction This mformatton is intended to provide factual mfonnahon only and is provided in conjunction w1tb our legal representation. It 1s not intended as financial advice or a financial recommendalion to any party. Gilmore a Bell. P.C. is not a financial advisor or a "municipel advisor" as defmed 10 the Securities Exchan~e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. FORM 8038 STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Refunded Bonds Bond Component Date Principal General Obligation Temporary Notes. Series 2019-1: TERM 05/01 /2020 5,551 ,341.19 5,551,34 1.19 General Obligation Temporary Notes, Series 2019-1 All Refunded Issues Coupon 1.580% Last Call Date Price 100.000 Issue Date 04/24120 19 (Finance 8.500) Page 8 Issue Price 5,551 ,341.19 5,551 ,341.19 Remaining Weighted Average Maturity 0.0056 0.0056 This informa.tion is provided based on tbe facrual infonmnion and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to U1e proposed trft.tlsaction. This infonnation is intended to provide facn1al infonnalion only and is provided in conjunctfon with our legal representation. It is not intended as financial advice or a financial recommendalion to any party. Gilmore & Bell P.C. is not H financial advisor or a •·municipal advisor" as defined in the Securities Exchanjl;e Act of 1934, as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. SUMMARY OF REFUNDING RESULTS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Dated Date Delivery Date Arbitrage yield Escrow yield Value of Negative Arbitrage Bond Par Amount True Interest Cost Net Interest Cost All-In TIC Average Coupon Average Life Weighted Average Maturity Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds Remaining weighted average maturity of refunded bonds PY of prior debt to 04/29/2020 @ 1.811113% Net PY Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 04/29/2020 04/29/2020 1.811113% 0.000000% 5,210,000.00 1.935153% 1.980905% 2.136252% 2.548999% 6.814 6.722 5,551,341.19 1.580000% 0.006 0.006 5,640, 192.89 (I 07,809.29) (1.942040%) (2.069276%) (Finance 8.500) Page 9 This information is provided based on tbe facruaJ infonnation and assumptions provided to Gilmore & Bell. P.C. by a pany to or a representative of a party to the proposed transect.ion. This infonnation is intended to provide facn1al information only and is provided in conjunct.ion witb our legal representation. It is not intended as financial advice or a financial recommendalion to any party. Gilmore & BeJJ, P.C. is not n financial advisor or a "municipal advisor" as defined in the Securities Excbanjl;e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. SUMMARY OF BONDS REFUNDED City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Bond Maturity Date Interest Rate Par Amount General Obligation Temporary Notes, Series 2019-1, 2019_1 , TERM: 05/01 /2020 1.580% 5,551 ,341.19 5,551 ,341.19 Call Date Call Price (Finance 8.500) Page 10 This information is provided based on the facrual information and assumptions provided to Gilmore & Bell. P.C. by R pany to or a representative of e party to the proposed transaction. This infonnation is intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a "municipal advisor'' as defined in the Securities Excban11:e Act of 1934, as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell, P.C. (Finance 8.500) Page 11 PRIOR BOND DEBT SERVICE City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Period Annual Bond Total Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 0412912020 5.551,341.19 5,551 ,341.19 05/01/2020 5,551 ,341.19 1.580% 89,416.68 5,640,757.87 10/01 /2020 5,640. 757.87 5,551 ,341 .19 89,416.68 5,640, 757 .87 5,640,757.87 This information is provided based on the facrual information and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed transaction. This infonnation is intended to pro\•ide fact,1al infonnation only and is provided in conjunction witb our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities E.xchanjl;e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. ESCROW REQUIREMENTS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Period Ending 05/01/2020 Principal 5,551.341.19 5,551,341.19 Interest Total 89,416.68 5,640,757.87 89,416.68 5,640,757.87 (Finance 8.500) Page 12 This infonuation is provided based on the factual information and assumptions provided to Gilmore & Bell. P.C. by a pany to or a representauve of a pany to the proposed transaction This mfonnation is intended to provide factual information only and is provided m conjuncbon with our legal representation. It is not wtendt'd as financial advice or a finam;1al recommendation to any party. Gilmore&. Bell, P.C. is not n financial advisor or a •·munic1pal advisor" as defined in the Secuntles Exchanjle Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. ESCROW COST City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Purchase Date 04/29/2020 Cost of Securities 0 Cash Deposit 5,640,757.87 5.640,757.87 Total Escrow Cost 5,640.757.87 5,640,757.87 (Finance 8.500) Page 13 This infonnation is provided based on the factual mfonnation and asswnpttons provided to Gilmore & Bell P.C. by a pany to or a repttSeotative of a party to the proposed transaction This mfonnahon is mtended to provide factual mformahon only and is provided in conjunction with our legal representation. It 1s not intended as financial advice or a financial recommendation to any party. Gilmore&: Bell. P.C. is not a financial advisor or a .. municipal advisor', as denned in the Securities Excban,;e Act of 1934. as amended. Apr I 4, 2020 I I :36 am Prepared by Gilmore & Bell, P.C. (Finance 8.500) Page I 4 ESCROW SUFFICIENCY City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 04/29/2020 5,640,757.87 5,640, 757 .87 5,640,757.87 05/0112020 5,640,757.87 (5 ,640, 757 .87) 5.640,757.87 5,640. 757 .87 0.00 This infonuation is provided based on the factual information and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction. This infonnation is inleudcd to provide fact11al infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a •·municipal advisor" as defined in tbc Securities Excban_JZ;e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. Total Escrow Cost Global Proceeds Escrow: 5,640. 757 .87 5,640, 757 .87 Modified Duration (years) ESCROW STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Yield to Receipt Date Yield to Disbursement Date Delivery date Arbitrage yield Perteet Escrow Cost 5,640, 192.89 5,640, 192.89 04/2912020 1.811113% Value of Negative Arbitrage 0.00 (Finance 8.500) Page 15 Cost of Dead Time 564.98 564.98 This information is provided based on the facrual infonuarion and assumptions provided to Gilmore & Bell, P .C. by a party to or a representative of a pany to the proposed 1ransaction. This infonnatio.n is in1ended to provide facn1al infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as dcfmed in the Securities Exchan~e Act of 1934. as amended. Apr 14, 2020 11 :36 am Prepared by Gilmore & Bell. P.C. PROOF OF TIC City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Date 04/01 /2021 I 0/01 /2021 04/01 /2022 I 0/01 /2022 04/01 /2023 I 0/01 /2023 04101/2024 I 0/01 /2024 0410112025 I 0/01 /2025 0410112026 I 0/01 /2026 04101 /2027 10/01/2027 04/01 /2028 I 0/01 /2028 04/01 /2029 I 0/01 /2029 04101 /2030 I 0/01/2030 0410112031 I 0/01/203 I 04101/2032 I 0/01 /2032 04/01/2033 I 0/01/2033 04/01/2034 I 0/01/2034 04/01 /2035 I 0/01 /2035 Dated Date Bond TIC TIC target PY to 0412912020 Debt Service @ 1.935153% 131,820.13 129,499.59 566,468.75 551 ,163.80 64,043.75 61,716.25 644,043.75 614,690.12 55,343.75 52,315.15 650,343.75 608,863.54 46,418.75 43,041.61 656,418.75 602,828.97 37,268.75 33,898.15 667,268.75 601 ,104.61 27,818.75 24,820. I 8 242,818.75 214,569.32 24,593.75 21 ,524.26 249,593.75 216,349.18 21 ,218.75 18,216.27 251,218.75 213,604.17 17,768.75 14,963.48 252,768.75 210,822.62 15,418.75 12,736.82 260,418.75 213,060.14 12,968.75 10,508.63 232,968.75 186,966.48 I 0,768. 75 8,559.52 235 ,768.75 185,604.48 8,378.12 6,532.31 238,378.12 184,079.21 5,790.62 4,428.75 240,790.62 182,395.48 3,000.00 2,250.68 243,000.00 180,558.07 6, 114,888.86 5,411,671.85 04/29/2020 1.935153% 5,411,671.85 (Finance 8.500) Page 16 This information is provided based on the facrual infonuation and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction. This infonnation is intended to provide factual infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not R financial advisor or a "municipal advisor" as defined in the Securities Exchanp;e Act of 1934. as amended. EXHIBITB IRS FORM 8038-G $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 B-1 /J GILMORE BELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 I (816) 221-1018 FAX I gilmorebell.com VIA FEDERAL EXPRESS Internal Revenue Service Center Ogden, Utah 84201 May 13, 2020 Re: $5,210,000 General Obligation Internal Improvement Bonds, Series 2020-A, of the City of Salina, Kansas, dated April 29, 2020 Ladies and Gentlemen: Enclosed for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986 Form 8038- G, Information Return for Tax-Exempt Governmental Obligations, being filed with respect to the above- captioned transaction. If you have any questions, please do not hesitate to contact me. GMR:jac Enclosure 600596.20207 Ref : 600596.20207 Dep : Very truly yours, Gina M. Riekhof Date : 13May20 Wg t : 1 . 00 LBS DV : SHIPPING : SPECIAL: HANDLING : 0 . 00 TOTAL : Svcs: ** 2DAY ** TRCK : 1355 7484 6073 14 49 0 .29 0 .00 14 78 Dear Customer, The following is the proof-of-delivery for tracking number: 13557 4846073 Delivery Information: Status: Delivered Signed for by: S. SNOW Service type: FedEx 2Day Special Handling: Deliver Weekday Shipping Information: Tracking number: 135574846073 Recipient: INTERNAL REVENUE SERVICE CENTER, 1973 N. RULON WHITE BLVD. OGDEN, UT, US, 84201 Reference 600596.20207 May 18, 2020 Delivered To: Mail room Delivery Location: 1973 N RULON WHITE BL VD OGDEN, UT, 84201 Delivery date: May 15, 2020 10:10 Ship Date: May 13, 2020 Weight: 0.5 LB/0.23 KG Shipper: FRONT DESK, Gilmore Bell. P.C. 2405 Grand Blvd STE 1100 Kansas City, MO, US, 641082521 Fonn8038•G Information Return for Tax-Exempt Governmental Bonds (Rev. September 2018) .,.. Under Internal Revenue Code section 149(e) OMB No. 1545-0720 .,.. See separate instructions. Department of the Treasury Caution: If the issue price is under $100,000, use Form 8038-GC. Internal Revenue Service .,.. Go to www.irs.gov/F8038G for instructions and the latest information. ··~--Reporting Authority If Amended Return, check here .... D 1 Issuer's name 2 Issuer's employer identification number (EIN) Cltv of Salina, Kansas 48-6017288 3a Name of person (other than issue" with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a Gina M. Riekhof, Gilmore & Bell, P.C., Bond Counsel 816-221-1000 4 Number and street (or P.O. box if mail is not delivered to street address) I Room/suite 5 Report number (For IRS Use Only) 2405 Grand Boulevard 1100 I 3 I I 6 City, town, or post office, state, and ZIP code 7 Date of issue Kansas Citv, Missouri 64108 04/29/2020 8 Name of issue 9 CUSIP number General Obliqatlon Internal lmorovement Bonds, Series 2020-A 794744 DA7 10a Name and title of officer or other employee of the issuer whom the IRS may call for more infonnation (see 10b Telephone number of officer or other instructions) employee shown on 1 Oa Debbie Pack, Director of Finance and Administration 785-309-5735 ·~1iliilU• Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education. 11 12 Health and hospital 12 13 Transportation 13 14 Public safety . 14 15 Environment (including sewage bonds) 15 16 Housing 16 17 Utilities 17 18 Other. Describe ..,. Various Public Improvements (landfill. police dept., water, recreational, bridges) 18 5,450,610 19a If bonds are TANs or RANs, check only box 19a .... D ~ . b D t. '": ·' If bonds are BANs, check only box 19b .... Cl 20 If bonds are in the form of a lease or installment sale, check box . . . . . . . . . ..,. D ~::'.'} ID! U Description of Bonds. Complete for the entire issue for which this form is being filed. (a) Final maturity date (b) Issue price (c) Stated redemption (d) Weighted (e)Yield price at maturity average maturity 21 10/01/2035 $ 5,450 610 $ 5,210,000 6 722 years 1.8111 % •!.JiT~• l'• Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 22 23 Issue price of entire issue (enter amount from line 21, column (b)) 23 5,450,610 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 104,884 .. 25 Proceeds used for credit enhancement 25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 II ... ~ 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . 27 4,755,991 ~ . - 28 Proceeds used to refund prior taxable bonds. Complete Part V 28 ~·,, ·.1f ""' ~ ,,. 29 Total (add lines 24 through 28) . 29 4,860,875 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 589,735 ·~Hll•'• Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . .... .... 0 006 years 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . N/A years 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) .... 05/04/2020 34 Enter the date(s) the refunded bonds were issued ..,. (MM/DDIYYYY) 04/24/2019 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Fonn 8038-G (Rev. 9-2018) Form 8038-G (Rev. 9-2018) Page 2 1:.i:l"il•·~· Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions 36a b Enter the final maturity date of the GIC..,. (MM/DD/YYYY) c Enter the name of the GIC provider .... 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . 37 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box.... D and enter the following information: b Enter the date of the master pool bond .... (MM/DD/YYYY) ---------------- c Enter the EIN of the issuer of the master pool bond .... _________________ _ d Enter the name of the issuer of the master pool bond ..,. ------------------ 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . 41a If the issuer has identified a hedge, check here .... D and enter the following information: b Name of hedge provider .... c Type of hedge..,. -------------------- d Term of hedge..,. --------------------- 42 If the issuer has superintegrated the hedge, check box 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . .... 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . .... 45a If some portion of the proceeds was used to reimburse expenditures, check here ..,. 0 and enter the amount of reimbursement . . ..,. 507 ,962 b Enter the date the official intent was ado ted ..,. MM/DD 03/1112019 D D D 0 0 Signature and Consent Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to Paid Preparer Use Only process this retur e person that I have authorize ~ Signature of issuer's authorized representative Date PrinVType preparer's name Preparer's signature James Dummitt Firm's name ~ Gilmore & Bell, P.C. Firm's address ~ 2405 Grand Boulevard Suite 1100, Kansas Cit , MO 64108 ~ Debbie Pack, Finance Direc tor r Type or print name and title Date Check D if PTIN 04/28/2020 self-employed P01062537 Firm's EIN ~ 43-1 611738 Phone no. 816-221-1000 Form 8038-G (Rev. 9-2018) EXHIBITC-1 PURCHASER'S RECEIPT FOR BONDS AND CLOSING CERTIFICATE $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A The undersigned, on behalf of Robert W. Baird & Co., Inc. (the "Original Purchaser"), as the Original Purchaser, and Underwriter of the above-described bonds (the "Bonds"), being issued on the date of this Certificate by the City of Salina, Kansas (the "Issuer"), certifies and represents as follows: 1. Receipt for Bonds. The Original Purchaser acknowledges receipt on the date hereof of all of the Bonds, consisting of fully registered Bonds in authorized denominations in a form acceptable to the Original Purchaser. 2. Issue Price. (a) Public Offering. The Original Purchaser offered all of the Bonds to the Public (as defined below) in a bona fide initial offering. (b) Reasonably Expected Initial Offering Price. As of the sale date of the Bonds (April 13, 2020), the reasonably expected initial offering prices of the Bonds to the Public by the Original Purchaser are the prices listed in Attachment A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Original Purchaser in formulating its bid to purchase the Bonds. (c) Defined Terms. (i) The term "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (ii) The term "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" is defined in U.S. Treasury Regulation § 1.150-l{b) which generally provides that the term related party means any two or more persons who have a greater than 50 percent common ownership, directly or indirectly. (iii) The term "Underwriter" means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public). C-1-1 The representations set forth in this certificate are limited to factual matters only. Nothing in this Certificate represents the Original Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, by Stifel, Nicolaus & Company, Incorporated, Municipal Advisor to the Issuer in executing the Municipal Advisor's Certificate Regarding the Competitive Sale, and by Gilmore & Bell, P.C., Bond Counsel to the Issuer, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: April 29, 2020. C-1-2 ROBERT W. BAIRD & CO., INC. RED BANK, NEW JERSEY Attachment A Expected Offering Prices Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 10/01 021 495,000.00 3.000% 102.745 508,587.75 495,000.00 10/01 022 580,000.00 3.000% 104.651 606975.80 580,000.00 10101 023 595,000.00 3.000% 106.190 631 830.50 595,000.00 10/01 024 610,000.00 3.000% 107.729 657,146.90 610,000.00 10101 025 630,000.00 3.000% 108.871 685,887.30 630,000.00 10/01 026 215,000.00 3.000% 109.793 236,054.95 215,000.00 10/01 027 225,000.00 3.000% 110.498 248,620.50 225,000.00 10/01 028 230,000.00 3.000% 109.393 251,603.90 230,000.00 10/01 031 220,000.00 2.000% 98.988 217,773.60 220000.00 10/0112032 225,000.00 2.125% 99.187 223,170.75 225,000.00 10/01 033 230,000.00 2.250% 99.424 228,675.20 230,000.00 10/01 034 235,000.00 2.375% 99.695 234,283.25 235,000.00 10101 035 240,000.00 2.500% 100.000 240,000.00 240,000.00 Tenn Bond 2030: 10/01 029 235,000.00 2.000% 100.000 235,000.00 235,000.00 10/01 _030 245,000.00 2.000% 100.000 245,000.00 245000.00 5,210,000.00 5,450,610.40 5,210,000.00 C-1-3 EXHIBITC-2 MUNICIPAL ADVISOR'S CERTIFICATE REGARDING THE COMPETITIVE SALE $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor"), as the Municipal Advisor to the City of Salina, Kansas (the "Issuer") in connection with the issuance of the above-described bonds (the "Bonds"), has assisted the Issuer in soliciting and receiving bids from potential underwriters in connection with the sale of the Bonds in a competitive bidding process in which bids were requested for the purchase of the Bonds at specified written terms, and hereby certifies as set forth below with respect to the bidding process and award of the Bonds: 1. The Bonds were offered for sale at specified written terms more particularly described in the Notice of Sale, which was distributed to potential bidders, a copy of which is attached to this Certificate as Attachment 1. 2. The Notice of Sale was disseminated electronically through Parity® and MuniOS. The methods of distribution of the Notice of Sale are regularly used for purposes of disseminating notices of sale of new issuances of municipal bonds, and notices disseminated in such manner are widely available to potential bidders. 3. To the knowledge of the Municipal Advisor, all bidders were offered an equal opportunity to bid to purchase the Bonds, and the bidding process did not afford any opportunity for bidders to review other bids before providing a bid (that is, no "last-look"). 4. The Issuer received bids from at least three bidders who represented that each has an established industry reputation for underwriting new issuances of municipal bonds. Based upon the Municipal Advisor's knowledge and experience in acting as the municipal advisor for other municipal issues, the Municipal Advisor believes those representations to be accurate. Copies of the bids received are attached to this Certificate as Attachment 2. 5. The winning bidder was Robert W. Baird & Co., Inc. (the "Original Purchaser"), whose bid was determined to be the best conforming bid in accordance with the terms set forth in the Notice of Sale, as shown in the bid comparison attached as Attachment 3 to this Certificate. The Issuer awarded the Bonds to the Original Purchaser. The representations set forth in this certificate are limited to factual matters only. Nothing in this Certificate represents the Municipal Advisor's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Gilmore & Bell, P.C., Bond Counsel to the Issuer, in rendering its C-2-1 opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: April 29, 2020 C-2-2 STIFEL, NICOLAUS & COMP ANY, IN CORPORA TED KANSAS CITY, MISSOURI By:~~ Title: ireciOr Attachment 1 Notice of Sale C-2-3 NOTICE OF SALE CITY OF SALINA, KANSAS $7 ,080,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 $5,250,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Email and electronic (as explained below) bids for the purchase of the General Obligation Temporary Notes, Series 2020-1 (the "Notes") and General Obligation Internal Improvement Bonds, Series 2020-A (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Financial Advisor on APRIL 13, 2020 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2020-1 Notes Series 2020-A Bonds SUBMITTAL HOUR (Central Time) 1:00 p.m. 1:00 p.m. Bids may only be submitted via PARITY®, or via email to the Municipal Advisor at arteberryd@stifel.com. Fax bids and hand-delivered written bids will not be accepted. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on one or both series of the Obligations. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of$5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated April 29, 2020 (the "Dated Date"), and will become due on May I, 2021. The Notes will bear interest from the Dated Date at rates to be determined when the Notes are sold as hereinafter provided, which interest will be payable at maturity. Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Notes, depending on the purchase price bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rate bid as a result of any changes made to the principal amount of the Notes as described herein. If there is an increase or decrease in the final aggregate principal amount of the Notes as described above, the Issuer will notify the Successful Bidder by means of telephone or email, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The actual purchase price for the Notes shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Notes, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of and interest on each Note will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the ''Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Such amounts will be payable to the Registered Owner of such Note as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Notes, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Note Registration. The Notes will be registered pursuant to a plan ofregistration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply ofregistered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Redemption of Notes Prior to Maturity. General. Whenever the Issuer is to select Notes for the purpose ofredemption, it will, in the case of Notes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on November 1, 2020, and thereafter, as a whole at any time or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Notice and Effect of Call/or Redemption. Unless waived by any owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Note shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101to10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvement projects and to pay costs associated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated April 29, 2020 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount* Year Amount* 2021 $520,000 2029 $230,000 2022 600,000 2030 235,000 2023 615,000 2031 210,000 2024 630,000 2032 220,000 2025 645,000 2033 225,000 2026 205,000 2034 235,000 2027 215,000 2035 240,000 2028 225,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April I, 2021 (the "Interest Payment Dates"). Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rates bid as a result of any changes made to the principal amount of the Bonds or the schedule of principal payments as described herein. If there is an increase or decrease in the final aggregate principal amount of the Bonds or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder by means of telephone or email, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The net production as a percentage of the principal amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change to the total principal amount of the Bonds or the schedule of principal payments described herein. Notwithstanding the requirements of the section entitled "Establishment of *Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. Issue Price," ifrequested by the Financial Advisor, the Successful Bidder shall within 20 minutes of such request provide the Financial Advisor with the initial offering prices of the Bonds to the public so as to allow for proper resizing of the Bonds. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Registered Owners. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose of redemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, if less than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October I in the years 2028, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2027, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITY®. Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Bonds. The Bonds are being issued pursuant to KS.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A.12-1736 et seq, KS.A. 12-2101 et seq., Charter Ordinance No. 39 of the Issuer, Article 12 Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and an ordinance and a resolution adopted by the Governing Body (collectively the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvement projects (the "Improvements''), to pay the costs associated with the issuance of the Bonds and retire a portion of the Issuer's outstanding general obligation temporary notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE OBLIGATIONS Book-Entry-Only System. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the Obligations. The Obligations will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Obligations. During the term of the Obligations, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Obligations to DTC or its nominee as the Registered Owner of the Obligations, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Obligations to its participants who shall be responsible for transmitting payments to beneficial owners of the Obligations in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Obligations, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Obligations would adversely affect the interests of the beneficial owners of the Obligations, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form offully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system of registration of the Obligations and DTC. Submission of Bids. Email bids shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2020-1" or "Proposal for General Obligation Internal Improvement Bonds, Series 2020-A," as applicable. Electronic bids via PARITY® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. Any bid submitted shall include the initial offering prices to the public for each maturity of the Bonds. If provisions of this Notice of Sale conflict with those of PARITYoc, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date. The Issuer shall not be responsible for failure of transmission of any bid. Any bidder desiring to have the Financial Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Financial Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PARITY® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 and from the following website: www.newissuehome.i-deal.com. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) the interest rate may not exceed 3.60%; (c) no supplemental interest payments will be considered; (d) the interest rate specified shall be a multiple of 1/100 or 1 /8 of 1 %; and (e) the interest rate shall not be zero (0%) percent. No bid for Jess than 99.50% of the principal amount of the Notes, and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the tenn of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder and the net interest cost (expressed in dollars) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes, it will provide the certification as to initial offering price described under the caption "Establishment of Issue Price" in this Notice. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 3 .60%; ( c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/20 or 1/8 of I%; (e) no zero (0%) percent interest rates will be permitted; and (f) the maximum difference between the high and low interest rates shall not exceed four percent (3.00%). No bid for less than 100.00% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment oflssue Price" in this Notice. Good Faith Deposit. All Obligations: The Successful Bidder(s) must supply a good faith deposit (the "Deposit") in the amount of2.00% of the principal amount of the of each respective Obligation as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder(s) to comply with the terms of its bid . The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder(s) have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder(s) or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder(s) in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder(s). If the Successful Bidder(s) default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: Subject to the timely receipt of the Deposit as set forth above, the award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, if any, fi"om or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, fi"om the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders are requested to supply an estimate of the TIC for the Obligations on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Financial Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidders' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a purchase agreement between the Issuer and the Successful Bidder(s) for purposes of the Jaws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Obligations herein offered for sale. Such application and ratings are further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations, and will not pay the premium in connection with any policy of municipal bond insurance desired by the Successful Bidder(s). In the event a bidder desires to purchase and pay all costs associated with the issuance of a policy of municipal bond insurance in connection with the Obligations, a commitment from the selected insurer must be attached to such bidder's Official Bid Form, and shall specify all terms and conditions to which the Issuer will be required to agree in connection with the issuance of such insurance policy. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder(s) elect to purchase the Obligations with municipal bond insurance, certain rating agencies will assign their ratings to the Obligations with the understanding that upon delivery of the Obligations, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy after the award of the Obligations shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Obligations. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. The Financial Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CUSIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about APRIL 29, 2020 (the "Closing Date"), to DTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name ofDTC. Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Obligations and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each an "Issue Price Certificate") containing the following for the Notes or for each maturity of the Bonds: (I) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Obligations for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Obligations for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Financial Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Obligations pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (I) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Obligations from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and (4) the Issuer anticipates awarding the sale of the Obligations, as applicable, to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Obligations as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms ( 1) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Obligations, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Obligations and (2) that it has an established industry reputation for underwriting municipal securities such as the Obligations. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within 20 minutes of a request by the Issuer, the Successful Bidder(s) shall advise the Issuer if a "substantial amount" (as defined in the Regulation (I 0% )) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for the Obligations. If the Successful Bidder(s) do not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price for the Obligations submitted in the bid of the Successful Bidder(s). After the Closing Time, the Successful Bidder(s) agree to provide to the Issuer all reasonably requested information related to establishing the issue price of the Obligations if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated April 7, 2020, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Financial Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder(s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32 (collectively, the "Rules"). Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further infonnation, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2019 is $509,082,680. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold, is $71,040,000, including general obligation notes to be issued simultaneously with the Bonds but excluding general obligation notes to be repaid with the proceeds of the Obligations and other available funds. Electronic Transactions. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed by electronic transmission. Copies, telecopies, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Obligations. Additional Information. Additional infonnation regarding the Obligations may be obtained from the undersigned or from the Financial Advisor at the addresses set forth below: DATED: April 7, 2020. Email Bid and Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67402 Phone No.: (785) 309-5735 Email: debbie.pack@salina.org Financial Advisor: Stifel, Nicolaus & Company, Incorporated 480 l Main Street, Suite 530 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 203-8733 Email: arteberryd@stifel.com CITY OF SALINA, KANSAS By: Shandi Wicks, Clerk TO: Shandi Wicks, Clerk City of Salina. Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2020-1 April 13, 2020 For $7.080,000' principal amount of General Obligation Temporary Notes. Series 2020-1, of the City of Salina, Kansas. to be dated April 29. 2020, as described in the Notice of Sale (the "Notice") dated April 7, 2020, said Notes to bear interest as follows: Maturity Mayl 2021 Principal Amount' $7,080,000 Interest Rate ____ % *Sub;ect to change; see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued interest to the date of delivery. Principal Amount ....................................................................................................................................................... $7,080.000.00' Less Discount (not to exceed 0.50%) .................................................................................................... ~--------~ Plus Premium (if any)·····························································································································---------- Total Purchase Price ................................................................................................................................ $ ________ _ Total interest cost to maturity at the rates specified ................................................................................ $ ________ _ Net interest cost ...................................................................................................................................... $ ________ _ 0 The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] £~----~]. Circle one or complete blank. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder. the undersigned will comply with all of the provisions contained in the Notice. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means. All bid documents. closing documents. certificates. ordinances, resolutions and related instruments may be executed by electronic transmission. Copies, telecopies, electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by.---------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: ------------~ Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina. Kansas, the above proposal is hereby accepted on April 13. 2020. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Email bids may be sent to the Financial Advisor at arteberryd@stifel.com or electronic bids may be submitted via PARITY'>, at or prior to 1 :00 p.m., Central Time. on April 13, 2020. Any bid received after such time will not be considered. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A April 13, 2020 For $5,250,000* principal amount of General Obligation Internal Improvement Bonds, Series 2020-A, of the City of Salina, Kansas, to be dated April 29, 2020, as described in the Notice of Sale (the ''Notice") dated April 7, 2020, said Bonds to bear interest as follows: Maturity Principal Maturity Principal October 1 Amount' Interest Rate October 1 Amount' Interest Rate 2021 $520,000 % 2029 $230,000 % 2022 600,000 % 2030 235,000 % 2023 615,000 % 2031 210,000 % 2024 630,000 % 2032 220,000 % 2025 645,000 % 2033 225,000 % 2026 205,000 % 2034 235,000 % 2027 215.000 % 2035 240,000 % 2028 225,000 % *Subject to change; see the Notice the undersigned will pay the total principal amount of the Bonds. plus a premium as set forth below, plus accrued interest to the date of delivery. Principal Amount ......................................................................................................................................................... $5,250,000.00" Plus Premium (if any) ..................................................................... ····················································---------- Total Purchase Price .............................................................................................................................. $ _________ _ Total interest cost to maturity at the rates specified .............................................................................. $ _________ _ Net interest cost (adjusted for Premium) ............................................................................................... $ _________ _ True Interest Cost ...................................................................................................................................................... _____ % D The Bidder elects to purchase Municipal Bond Insurance from. [Assured] [AGM] [BAM] [ ] Circle one or complete blank. D The Bidder elects to have the following Term Bonds: Maturity Date Years Amount* October I, to $ _____ _ October 1, __ to $ _____ _ *subject to mandatory redemption requirements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed by electronic transmission. Copies, telecopies. electronic files and other reproductions of original executed documents (or documents executed by electronic transmission) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. The acceptance of this proposal by the Issuer by execution below shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by:---------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: --------------Telephone No. '--~------------ ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April 13, 2020. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Email bids may be sent to the Financial Advisor at arteberryd@stifel.com or electronic bids may be submitted via PARITY", at or prior to 1 :00 p.m., Central Time, on April 13, 2020. Any bid received after such time will not be considered. Attachment 2 Bids Received C-2-4 PARITY Bid Form @;;0ea1 Upcoming Calendar Result J Excel I Robert W. Baird & Co., Inc. -Red Bank , NJ's Bid Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A For the aggregate principal amount of $5,250,000.00, we will pay you $5,454,775.70, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon% Bond Insurance 10/01/2021 520M 3.0000 10/01/2022 600M 3.0000 10/01/2023 615M 3.0000 10/01/2024 630M 3.0000 10/01/2025 645M 3.0000 10/01/2026 205M 3.0000 10/01/2027 215M 3.0000 10/01/2028 225M 3.0000 :lQlQ1l2Q29 :lQlQ1/2Q3Q 465M 2.0000 10/01/2031 210M 2.0000 10/01/2032 220M 2.1250 10/01/2033 225M 2.2500 10/01/2034 235M 2.3750 10/01/2035 240M 2.5000 Total Interest Cost: $900,997.92 Premium: $204,775.70 Net Interest Cost: $696,222.22 TIC: 1.928931 Total Insurance Premium: $0.00 Time Last Bid Received On:04/13/2020 12:42:29 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Robert W. Baird & Co., Inc., Red Bank , NJ Contact: charles massaro Title: director Telephone: 732-576-4410 Fax: 732-576-4420 Issuer Name: City of Salina Company Name: PARJTY Bid Form (St0ea1 · Upcoming Calendar Overview Result I _ Excel__J KeyBanc Capital Markets -Cleveland , OH's Bid Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A For the aggregate principal amount of $5,250,000.00, we will pay you $5,395,322.00, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon% 10/01/2021 520M 3.0000 10/01/2022 600M 3.0000 10/01 /2023 615M 3.0000 10/01/2024 630M 3.0000 10/01/2025 645M 3.0000 10/01/2026 205M 3.0000 10/01/2027 215M 3.0000 10/01/2028 225M 3.0000 10/01/2029 230M 3.0000 10/01/2030 235M 2.0000 10/01/2031 210M 2.0000 10/01/2032 220M 2.1250 10/01/2033 225M 2.2500 10/01/2034 235M 2.3750 10/01/2035 240M 2.5000 Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: Bond Insurance $922,669.03 $145,322.00 $777,347.03 2.171547 Time Last Bid Received On:04/13/2020 12:54:46 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: KeyBanc Capital Markets, Cleveland , OH Contact: Robert Bond Title: Managing Director Telephone: 720-904-45 71 Fax: Issuer Name: City of Salina Company Name: PARITY Bid Form Upcommg Calendar FHN Financial Capital Markets -New York, NY's Bid Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A For the aggregate principal amount of $5,250,000.00, we will pay you $5,609,521.70, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon% Bond Insurance 10/01/2021 520M 3.0000 10/01/2022 600M 3.0000 10/01/2023 615M 3.0000 10/01/2024 630M 3.0000 10/01/2025 645M 3.5000 10/01/2026 205M 3.5000 10/01/2027 215M 3.5000 10/01/2028 225M 3.0000 10/01/2029 230M 3.0000 10/01/2030 235M 3.0000 10/01/2031 210M 3.0000 10/01/2032 220M 3.0000 10/01/2033 225M 3.0000 10/01/2034 235M 3.0000 10/01/2035 240M 3.0000 Total Interest Cost: $1,089,448.33 Premium: $359,521.70 Net Interest Cost: $729,926.63 TIC: 1.970178 Total Insurance Premium: $0.00 Time Last Bid Received On:04/13/2020 12:59:39 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: FHN Financial Capital Markets, New York, NY Contact: Vincent Pietanza Title: Telephone: 212-418-5005 Fax: Issuer Name: City of Salina Company Name: PARITY Bid Form Upcoming Calendar _J Overview _J Re~ ~J The Baker Group -Oklahoma City , OK's Bid Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A For the aggregate principal amount of $5,250,000.00, we will pay you $5,521 ,936.67, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon % 10/01/2021 520M 3.5000 10/01/2022 600M 3.5000 10/01 /2023 615M 3.5000 10/01/2024 630M 3.5000 10/01/2025 645M 3.5000 10/01/2026 205M 3.5000 10/01/2027 215M 3.5000 1QlQ1l2Q28 1Q/Q1l2Q29 455M 2.0000 1Q/Q1/2Q3Q 1Q/Q1l2Q31 445M 2.0000 1QlQ1l2Q32 1QlQ1l2Q33 445M 2.0000 1QlQ1l2Q34 1QlQ1l2Q35 475M 3.0000 Total Interest Cost: Premium: Net Interest Cost: TIC : Total Insurance Premium: Bond Insurance $978,237.22 $271,936 .67 $706,300.55 1.941859 Time Last Bid Received On:04/13/2020 12:53:52 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: The Baker Group, Oklahoma City . OK Contact: Scott Fletcher Title: Telephone:405-415-7332 Fax: Issuer Name: City of Salina Company Name: Attachment 3 Bid Comparison C-2-5 PARITY Result Screen ~0ea1 · I 10:32:39 a.m. CDST Bid Results Upcoming Calendar Overview Compare Summary Salina $5,250,000 General Obligation Internal Improvement Bonds Series 2020-A The following bids were submitted using PARIT...fS> and displayed ranked by lowest TIC . Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D BQbec:t w Baird & CQ Im;;; 1.928931 D Ibe Balser GrQup 1.941859 D FHl'::j Fimm!:;ial Capital Marlsets 1.970178 D 1$.e~BaOQ Capital Marlsets 2.171547 *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. '." 1981 2002 1 Deal LLC All rights rese'verl Tradema'• s EXHIBITD DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS AND LIST OF REIMBURSEMENT EXPENDITURES $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 D-1 EXHIBIT D TO FEDERAL TAX CERTIFICATE Description of Property Comprising the Financed Facility City of Salina, Kansas General Obligation Temporary Notes Series 2020-A Bonds Estimated Elapsed Estimated Original Placed in Time Remaining Economic Service from Economic Asset Description Life Date Issue Date Life Landfill Cell #20 20 April-20 0.00 20.00 Police Parking 20 April-20 0.00 20.00 Smoky Hill River Renewal 20 April-20 0.00 20.00 Golf Course Irrigation 20 April-19 -1.00 19.00 North 9th Street Bridge 20 April-20 0.00 20.00 Less land costs Net costs, excluding land Average, Reasonably Expected Economic Life: 19.90 years 120% of Original Economic Life 120% 23.89 years * Improvement Fund Deposit excludes Costs oflssuance and Underwriter's Discount Bond Proceeds Allocated to Project Costs** Other Money Allocated to Project Costs** Total Project Costs Asset Type solid waste real estate various park bridge Total Estimated Project Costs 2,029,465 269,532 27,000,000 1,385,173 104,547 30,684,170 30,684,170 5,345,725 25,338,445 30,684,170 Costs Paid from Series 2020-A Bond Proceeds 2,029,465 269,532 2,434,219 507,962 104,547 5,345,725 5,345,725 ** Includes $4,755,991.04 of Bond Proceeds used to refinance the Series 2019-1 Notes, and $589,734.89 used to finance new projects. *** Other Money may include prior or future tax-exempt financings. City of Salina, Kansas General Obligation Temporary Notes, Series 2020-1 Economic Life x Financed Cost 40,589,300 5,390,640 48,684,380 9,651,278 2,090,940 106,406,538 April 29, 2020 EXHIBIT D TO FEDERAL TAX CERTIFICATE List a Reimbursement Expenditures Date Paid Vendor Description Total Amount of Payment 4/17/2019 EC Design Golf Course Irrigation Project 11/6/2019 EC Design Golf Course Irrigation Project 12/31/2019 EC Design GolfCourse Irrigation Project 121312019 COMMERCIAL IRRIGATION & TURF, INC. GolfCourse Irrigation Project 12/30/2019 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project 7/17/2019 COMMERCIAL IRRIGATION & TURF, INC. GolfCourse Irrigation Project 07/30/2019 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project 08/27/2019 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project 10/08/2019 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project 10/29/2019 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project 02/18/2020 COMMERCIAL IRRIGATION & TURF, INC. Golf Course Irrigation Project _ 5,000.00 9,500.00 9,500.00 219,680.85 89,221.08 378,612.00 292,788.00 239,642.82 26,116.06 43,471.79 71,640.70 Amount Reimbursed 127,090.66 239,642.82 26, 116.06 43,471.79 71,640.70 Total Reimbursement Expenditures from Bonds $ 1,385, 173.30 $ 507,962.03 City of Salina, Kansas General Obligation Improvement Bonds, Series 2020-A April 29, 2020 EXHIBITE FORM OF ANNUAL COMPLIANCE CHECKLIST $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 ISSUE DATE: APRIL 29, 2020 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for working with other Issuer officials, departments and administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the extent necessary to carry out the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete this checklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions or need assistance in completing the checklist, please contact Bond Counsel at the address below. A completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Bond Compliance Officer Name: ~[ -----~ Bond Compliance Officer Signature: ~-----' Date of Report: [ ] Annual Period Covered by Report: ~[ -----~ **If the answers to any of the following questions identify any compliance deficiencies, the Bond Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax Compliance Procedure.** Item Question Response 1 Were all of the Financed Improvements owned by the Issuer during the 0Yes Ownership entire Annual Period? 0No If answer above was "No," was advice of Bond Counsel obtained prior 0Yes to the transfer? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. E-1 Item Question Response 2 During the Annual Period, was any part of the Financed Improvements LJYes Leases & leased at any time pursuant to a lease or similar agreement for more 0No Other Rights than 50 days? to Possession If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the lease or other arrangement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 3 During the Annual Period, has the management of all or any part of the 0Yes Management operations of the Financed Improvements (e.g., cafeteria, system 0No or Service operations, etc.) been assumed by or transferred to another entity? Agreements If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the management agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 4 Was any other agreement entered into with an individual or entity that 0Yes Other Use grants special legal rights to the Financed Improvements? 0No If answer above was "Yes," was advice of Bond Counsel obtained prior 0Yes to entering into the agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 5 Have any Gross Proceeds of the Bonds been invested in a Guaranteed 0Yes Proceeds & Investment Contract? 0No Investments Has the Issuer entered into an Interest Rate Swap Agreement with 0Yes respect to the Bonds? 0No Has any sinking or reserve fund for the payment of the Bonds been 0Yes established (other than funds and accounts created in the Bond 0No Resolution)? Have any of the Bonds been redeemed or refunded in advance of their 0Yes scheduled maturities? 0No If answer to any of the above questions was "Yes," notify Bond Counsel with such information and place a copy of documentation in the Tax- Exempt Bond File. E-2 Item 6 Arbitrage & Rebate Bond Counsel: Question Have all rebate and yield reduction calculations mandated in the Federal Tax Certificate or Compliance Agreement been prepared for the current year? If No, contact Rebate Analyst and incorporate report description of resolution in the Tax-Exempt Bond File. Gilmore & Bell, P.C. 2405 Grand Blvd., Suite 1100 Kansas City, MO 64108 Phone: (816) 221-1000 Fax: (816) 221-1018 Attn: Gina Riekho/ Email: griekhoj@gilmorebell.com E-3 or include Response LJYes 0No EXHIBITF FORM OF FINAL WRITTEN ALLOCATION $5,210,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2020-A DATED APRIL 29, 2020 ISSUE DATE: APRIL 29, 2020 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain categories of assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. The Tax Compliance Procedure requires the Bond Compliance Officer to complete a Final Written Allocation of the proceeds of the Bonds, in substantially the following form, when all proceeds (including Investment earnings on proceeds) are expended, but not later than 18 months after the Financed Improvements are placed in service. A completed copy of this Final Written Allocation should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of(l) the Bonds or (2) any obligation issued to refund the Bonds. The undersigned is the Bond Compliance Officer of the City of Salina, Kansas (the "Issuer") and in that capacity is authorized to execute federal income tax returns required to be filed by the Issuer and to make appropriate elections and designations regarding federal income tax matters on behalf of the Issuer. This allocation of the proceeds of the bond issue referenced above (the "Bonds") is necessary for the Issuer to satisfy ongoing reporting and compliance requirements under federal income tax laws. Purpose. This document, together with the schedules and records referred to below, is intended to memorialize allocations of Bond proceeds to expenditures for purposes of § § 141 and 148 of the Internal Revenue Code (the "Code"). All allocations are or were previously made no later than 18 months following the date the expenditure was made by the Issuer or, if later, the date the "Financed Improvements" were "placed in service" (both as defined below), and no later than 60 days following the 5th anniversary of the issue date of the Bonds. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Federal Tax Certificate, relating to the Bonds, dated April 29, 2020 (the "Issue Date"). Background. The Bonds were issued pursuant to the Bond Resolution in order to provide funds needed to finance the Financed Improvements and refund certain temporary notes of the Issuer. Proceeds of the Bonds were deposited into the Improvement Fund established under the Bond Resolution. Sources Used to Fund Improvements and Allocation of Proceeds to Costs of Financed Improvements. A portion of the costs of the Improvements were paid from sale and investment proceeds of the Bonds (and proceeds of the refinanced temporary notes) as shown on Schedule I to this Final Written Allocation. Identification of Financed Improvements. The Financed Improvements are listed on Schedule 2 to this Final Written Allocation. F-1 Identification and Timing of Expenditures for Arbitrage Purposes. For purposes of complying with the arbitrage rules, the Issuer allocates the proceeds of the Bonds and the temporary notes to the various expenditures described in the invoices, requisitions or other substantiation attached as Schedule 2 to this Final Written Allocation. In each case, the cost requisitioned was either paid directly to a third party or reimbursed the Issuer for an amount it had previously paid or incurred. Amounts received from the sale of the Bonds and retained as underwriter's discount are allocated to that purpose and spent on the Issue Date. Amounts allocated to interest expense are treated as paid on the Interest Payment Dates for the Bonds. Placed In Service. The Financed Improvements were "placed in service" on the date(s) set out on Schedule 2 to this Final Written Allocation. For this purpose, the assets are considered to be "placed in service" as of the date on which, based on all the facts and circumstances: (a) the constructing and equipping of the asset has reached a degree of completion which would permit its operation at substantially its design level; and (b) the asset is, in fact, in operation at that level. This allocation has been prepared based on statutes and regulations existing as of this date. The Issuer reserves the right to amend this allocation to the extent permitted by future Treasury Regulations or similar authorities. CITY OF SALINA, KANSAS Date: ________ _ This Final Written Allocation has been prepared in the manner required by the Tax Compliance Procedure: [Issuer Counsel/Bond Counsel] Date of review: F-2 Bond Compliance Officer SCHEDULE 1 TO FINAL WRITTEN ALLOCATION ALLOCATION OF SOURCES AND USES S-1-1 SCHEDULE2 TO FINAL WRITTEN ALLOCATION IDENTIFICATION OF FINANCED ASSETS FROM BONDS Actual Date Estimated Actual Amount Placed in Useful Actual Financed Description Service Life Total Cost From Bonds fcoov categoriesfrom Ex DJ f month/yearl r l years $f l $f l *note: exclude land costs DETAILED LISTING OF EXPENDITURES* Item No. Date Paid Amount Paid Cate2ory Payee Description Reference * or attach General Ledger or Project Ledger S-2-1 Governing Body City of Salina, Kansas Robert W. Baird & Co., Inc. Red Bank, New Jersey Ii GILMOl\..EBELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 I (816) 221-1018 FAX I gilmorebell.com April 29, 2020 Re: $5,210,000 General Obligation Internal Improvement Bonds, Series 2020-A of the City of Salina, Kansas, Dated April 29, 2020 We have acted as Bond Counsel to the City of Salina, Kansas (the "Issuer"), in connection with its issuance of the above-captioned bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer prescribing the details of the Bonds. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: I. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3. The interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Code § 265(b )(3). We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, STATE OF KANSAS OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT ATIORNEY GENERAL The Honorable Jake LaTurner State Treasurer April 29, 2020 Landon State Office Building, Room 201 N Topeka, KS 66612 Dear Mr. LaTurner: MEMORIAL HALL 120 SW I OTH AVE , 2ND FLOOR TOPEKA, KS 66612-1597 (785) 296-2215 •FAX (785) 296-6296 WWW AG.KS GOV Pursuant to K.S.A. 10-108, basic or supplemental transcript material is hereby approved and you may register the following: Municipality: City of Salina, Kansas Description: General Obligation Internal Improvement Bond Series: 2020-A Numbered: Registered Dated: April 29, 2020 Aggregate Amount: $5,210,000.00 Date of First Payment: April 1, 2021 Fiscal Agent: Kansas State Treasurer RDS:sb cc: Shandi Wicks, City Clerk Gilmore & Bell-Kansas City Sincerely, OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT 12-,~ Richard D. Smith Assistant Attorney General STIFEL April 23, 2020 CLOSING MEMORANDUM TO: SEE DISTRIBUTION LIST FROM: DAVID ARTEBERRY RE: BOND ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER: AMOUNT, NAME AND DATE OF ISSUE: TIME AND DATE OF CLOSING: SETTLEMENT NUMBERS: METHOD OF FUNDS TRANSFER: TRANSFER INSTRUCTIONS: City of Salina, Kansas $5,210,000 City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2020-A Dated April 29, 2020 lO:OOa.m. Wednesday, April 29, 2020 Via telephone Par Amount of Bonds Add: Reoffering Premium Less: Underwriter's Discount Less: Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds 4801 Main Street, Suite 530 I Kansas City, Missouri 641121(816)203-8728 main Stifel, Nicolaus & Company, Incorporated I Member SIPC & NYSE I www.stifel.com $5,210,000.00 240,610.40 (38,938.55) (105.000.00) $5,306,671.85 Page 2 (Robert W. Baird & Co., Inc. Wire) (City Wire) DISPOSITION OF FUNDS: (Kansas State Treasurer) (City of Salina) DELIVERY OF TRANSCRIPT AND LEGAL OPINION: BOND DELIVERY INSTRUCTIONS: On Wednesday, April 29, 2020, Robert W. Baird & Co., Inc. will wire transfer an amount of $5,306,671.85 to: U.S. Bank N.A. ABA #1010-0018-7 For credit to State Treasurer Operating Account Account#l45592399581 For further credit to City of Salina Attn: Shauna Wake. On Tuesday, April 28, 2020, the City shall wire $334,086.03 of remaining proceeds from its General Obligation Temporary Notes, Series 2019-1, to: U.S. Bank N.A. ABA #1010-0018-7 For credit to State Treasurer Operating Account Account#l45592399581 For further credit to City of Salina Attn: Shauna Wake. The Kansas State Treasurer shall use the $5,306,671.85 received from Robert W. Baird & Co., Inc. along with $334,086.03 received from the City, and $5,685,440.93 of proceeds from the sale of the City's General Obligation Temporary Notes, Series 2020-1 received from UMB Bank N.A. (total $11,326,198.81) to redeem the following outstanding temporary notes of the City: General Obligation Temporary Notes: Series 2019-1 (matures 5/1/20) Series 2019-2 (redeemed early on 5/4/20) Amount Due: $6,183,012.45 5.143.186.36 $11,326,198.81 The City shall deposit the $105,000.000 good faith deposit for the Bonds previously received from Robert W. Baird & Co., Inc. along with $468,907.94 of remaining proceeds from the Series 2019-1 Notes ($573,907.94 total) into Improvement Fund for General Obligation Internal Improvement Bonds, Series 2020-A, and apply the funds as follows: For Issuance Costs For Golf Course Irrigation $ 65,945.91 507.962.03 $573,907.94 Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal opinion to the City, Robert W. Baird & Co., Inc. and Stifel, Nicolaus & Company. Original signed legal opinions and transcripts will be mailed when completed. PDF copies of the Bonds will be delivered to Robert W. Baird & Co., Inc. in ad1i1ance of closing, and Robert W. Baird & Co., Inc. will arrange for closing of 4801 Main Street, Suite 530 I Kansas City, Missouri 64112 I (816) 203-8728 main Stifel, Nicolaus & Company, Incorporated I Member SIPC & NYSE I www.stifel.com Page 3 the transaction with OTC using an Emergency Rider to the Letter of Possession. The Paying Agent will hold the original Bonds and deliver the physical certificates to the offices of the Depository Trust Company as soon as possible following DTC's announcement that it has resumed acceptance of physical certificates. PAYMENT OF COSTS OF ISSUANCE: All reimbursable costs associated with the issuance of the Bonds will be paid after closing by the City from the Series 2020-A Improvement Fund upon presentation of the proper invoices. 4801 Main Street, Suite 530 I Kansas City, Missouri 64112 I (816) 203-8728 main Stifel, Nicolaus & Company, Incorporated I Member SIPC & NYSE I www .stifel.com Cassmeyer, Julie (G&B) From: Sent: To: bondreg@treasurer.ks.gov Wednesday, April 15, 2020 3:21 PM Colborne, Amy (G&B) Subject: Bondreg: Updated Bond Registration April 15, 2020, 15:21:22 This bond issue has been updated in the KST Bond Registration System. Below is the updated information: Registration#: 0322-085-042920-898 Municipality: Salina Bond Counsel: Gilmore Bell: Amy Colborne Paying Agent: State Purpose & Series: General Obligation Internal Improvement Bonds, Series 2020-A Book Entry: Yes Principal: $5,210,000.00 Closing Date: April 29, 2020 The issue was updated by Gina Clement. 1 Office of the Kansas State Treasurer Bond Registration System 900 SW Jackson St., Ste 201 ... Topeka, KS 66612-1235 ... 785-296-3171 April 17, 2020 Julie Cassmeyer City Of Salina 2405 Grand Boulevard, Suite 1100 Kansas City, MO 64108 RE: $5,210,000.00, City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2020-A Dated April 29, 2020, Registration #0322-085-042920-898 Dear Ms. Cassmeyer, This office has been requested to authorize the printing of the State Treasurer's facsimile signature and seal on the above referenced issue. The registration number has been confirmed as correct. Authorization hereby granted April 17, 2020. Sincerely, Office of the State Treasurer Jake LaTumer Shauna Wake, M.B.A. Director of Fiscal Services cc Julie Cassmeyer Gilmore & Bell Pc C.H. 2405 Grand Boulevard, Suite 1100 Kansas City, Mo 64108