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Salina KS (GOTN) 2021-1
CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 DATED APRIL 29, 2021 CLOSING LIST The transcript of proceedings will be prepared in electronic format unless otherwise noted, for the above referenced issue (the "Notes"), and distributed as follows: 1.City of Salina, Kansas (the "Issuer") 2.Attorney General of the State of Kansas 3.TD Securities, New York, New York (the "Original Purchaser") 4.State Treasurer, Topeka, Kansas (the "Paying Agent") 5.Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor") 6.Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel") Document Number PROCEEDINGS AUTHORIZING THE IMPROVEMENTS 1.North 9th Street Bridge• Excerpts of Minutes of the governing body meeting evidencing passage of Ordinance No. 02-10071 and adoption of Resolution No. 19-7677•Ordinance No. 02-10071 designating certain streets in the City as main trafficways • Affidavit of Publication of Ordinance No. 02-10071• Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 19-7677·Resolution No. 19-7677 authorizing main trafficway improvements 2.Smoky Hill River Renewal• Excerpt of Minutes of the governing body meeting evidencing passage of Ordinance No. 17-10885•Ordinance No. 17-10885 authorizing capital improvements Affidavit of Publication of Summary of Ordinance No. 17-10885 3.Automated Sanitation Trucks• Excerpt of Minutes of the governing body meeting evidencing passage of Resolution No. 20-7818 • Resolution No. 20-7818 authorizing municipal solid waste improvements• Affidavit of Publication of Resolution No. 20-7818• Certificate of No Protest4.Great Plains Manufacturing Center Convention Hall · Excerpt of Minutes of thegoverning body meeting evidencing passage of Resolution No. 21-7931• Resolution No. 21-7931 authorizing capital improvementsPROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE NOTES 5.Excerpt of Minutes of the March 15, 2021 governing body meeting evidencing adoption ofResolution No. 21-79416.Resolution No. 21-7941 authorizing the offering for sale of the Notes7.Notice of Sale, Preliminary Official Statement and Certificate Deeming PreliminaryOfficial Statement Final8.Official Statement9.Continuing Disclosure Undertaking10.Excerpt of Minutes of the April 12, 2021 governing body meeting evidencing adoption ofResolution No. 21-7946; Bid Tabulation; Winning Bid11.Resolution No. 21-7946 authorizing the issuance of the Notes and prescribing the form anddetails of the Notes CLOSING DOCUMENTS 12.Transcript CertificateExhibit A -Statement of CostsExhibit B -Schedule of Outstanding General Obligation Indebtedness13.Certificates of Manual Signature•Mayor·City Clerk14.Specimen Note and Printer's Certificate15.Agreement Between Issuer and Agent16.DTC DocumentsBlanket Letter of Representations Underwriting Safekeeping Agreement 17.Rating Letter -Moody's 2 18.Closing Certificate19.Federal Tax Certificate with attachments as follows:Exhibit A Debt Service Schedule and Proof of Note Yield Exhibit B IRS Form 8038-G Exhibit C-1 Purchaser's Receipt for Notes and Issue Price Certificate Exhibit C-2 Municipal Advisor's Certificate Regarding the Competitive Sale Exhibit D Description of Property Comprising the Financed Facility and List of Reimbursement Expenditures Exhibit E Sample Annual Compliance Checklist LEGAL OPINIONS 20.Approving legal opinion of Gilmore & Bell, P.C.21.Approval letter of Attorney General22.Closing Letter MISCELLANEOUS DOCUMENTS 23.Letter from State Treasurer Confirming Registration Number24.Authorization of State Treasurer to use facsimile signature and seal3 Commial011 Aaloal CDT OF SALINA, KANSAS REGULAR.MEETING OF THE BOARD OF COMMISSIONERS Febrauy 11, 2002 4:00p.m. 'Ihe City Commission convened at 3:3 D p.m. for a Cimm Open Forum. 'l'he Regular Meeting of the Board of()mnnissinners was called to order at 4:00 p.m. in Room J 07, City-County Building. A roll call wu taken followed by the Pledge of AlJegim:e and a moment of silence. Then: were pracnt: Mayor Kristin M. Seaton, Cbaiunm presiding Commissioner Deborah P. Divine Commiasiom:r Don Heath Commissioner Alan B. Jilka Commissioner Mo* D. Shadwick comprising a quorum of the Board. also present: Absent: Greg Bengtson, City Attorney Dc:mlls M. Kissinger, City Manager Lieu Ann Nioola, City Clat None. CITIZEN FORUM None. AWARDS• PROCLAMATIONS ( 4.1) The w=lc ofFebnmy 17" through Che 23111 as "'National Eoginccn Wet!c' in the City ofSalim. The proclamation was read by Rob Mihm. Ptesidcat of the Smoky VaJJcy Chapter of!Cmsas Socf�of Profession.al &gincers and civil engineer with Bacher, Willil and Ratliff'Corporalion. PUBLIC BEARINGS AND ITEMS SCHEDULED FORA CERTAIN TIME (5,1) Public hearing on.Application #CU0l-11, filed by Rusty Leister, requesting a Conditional Use Pcanit to allow a driDkiag cstabtishment in the C4 District on property addressed as 117 N. Smta Fe, lcplly descn"bed u the Soulh halfofLot 100 on SmtaFe Avmuc in the Original Town of Salina. lbe public hearing was opened. Commissioner Shadwick excused himself fmm the meeting due to conflid or interest. Dean.Andrew, Din:ctorof Planning and Community Dewlopmait. explained the request. City Commission alternatives, events taken place to date, and the Plmming Commission's rccommondation. A disc:uss:ion followed with Commissioner Divine, City Manager DcnDia Kissinger, and Mr. An� �ganling conditions placed on the property IDd safety concerns. Ken Wasscmum, 213 S. Santa Fe, explained moclificatiom made to the plans and n:qucstcd the applic:a!ion be rctumccJ to the Planning Commission for fuJ1ber consideration. 02-3181 Moved by Commissioner Dmne, SCC0Dded by Omunissift!Ja' Hedi. to return Application #CUOl-11 to the Planning Commission for 1brtbcr considention md to be mon, specific on c:ondidcms placed. Aye: (4), Nay: (0). Abstained: (1) Shadwick. MotionAnied. Ccmmlnlon ActkmL Mr. Kissinger responded to Commissioner r!lka's question regarding the Condition.al Use Penn.it process. Commissioner Shadwick mumcd to 1he meeting. CONSENT AGENDA (6.1) Approve Iha minlllcs ofFebrway 4, 2002. (6.2) Rtsolution No. 02-5812 IIIJfharizins the public ale or approximately $4,865,000 principal amount General Obligation Temporary Notes, Series 2002-1. (6.3) Approval of the 2002 Parler md Recreation Capital Improvement Program. Steve Snyder, Director of Pab and Recreation, IWllil1ltizc:d the Capital Improvement Program. 02-3182 Moved by Commissioner Divine, seconded by Commissioner Shadwick, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. ADMINISTRATION (8.1) Second readmg Ordimmcc No. 02-10072 vacating Reserve "A" in the Rimi Addition. Mayor Seaton clarified that Ordinance No. 02-10072 was passed on first reading on February 4, 2002, no commmts have been received, and the property owner signed and recorded an affidavit wi1h the Register of Deeds acknowledging and consenting to the loss or the public street access. 02-3183 Moved by CotnmissiODCr fdb, seconded by Commissioner Shadwick, to adopt Ordinance No. 02-10072 on second reading. A roll call vote wu taken. Aye: (') Divine, Reath, ftlka. Shadwick, Seaton. Nay: (0). Motion carried. (8.2) First reading Ordinmcc No. 02-10071 designating certain smets as main tramcways and desiguating certain additional strms as traflicway connections. Dennis Kissinger, City Manage-, summamcd the ordinance and ch.mgcs. Mr. Kissinger also raponded to Commissioner Divine'• question regarding the removal or Bishop and College Stree«s. 02-3 I 84 Moved by Commissioner Shadwick, seconded by Commilsioncr Divine, to pass Ordimmcc No. 01-10071 on first reading. Aye:('). Nay: (0). Motion c:micd. (8.3) Resolution No. 02-5811 initiating procecdlllgs for main traDicway md main traffic-way COl1J1Cc:ti.Oft. improvements involving NOl1h Ohio Street and related Blrml. Rodney� Director or PiDaftce and Administration, explained Iha proceedings. -m-3185 Moved by CommissioncrHc:aib, ICC.Olldcd by COlllmissioncr Jilb, to adopt Resolution No. 02-,11 I. Aye: (!S). Nay: (0). Motion carried. (8.4) City Comminlon direction to staff regarding the rmauram smoking ban Issue. Damis Kissinscr, City Mmzagc:r, smmnariud tho request and City Cammission options. Re also responded to Commissioner Shadwick'• question regarding 1mOking on public property. CommlaJoa Adlon� Commissioner Shadwic:1:: thmbd the coalition for their work, but c:xpre.ssed opposition toward considering a smoke-free ordinance. Also 1hanking the coalition, each remaining Commissioner gave lheir reasons for stafrs continued work on the matter. 02-31 . Moved by Commissioner Divine, seconded by Commissioner Heath, to din:ct City Staffto complete 1be legal and mamaganent n:scarch necessary to prepare an issues and options report and draft a smoke-he restaurant ordim:Dec for farther discussion and consideration. Aye: (4). Nay: (1) Shadwick. Motion carried. (8.5) Preliminary consideration of two separate property transactions involving smplus city -property at Belmont and Ohio, and a parking lot property at Santa Fe and Ash in downtown Salina. Dennis Kissinger, City Manager, explained the tnmsactiona. Mr. Kissinser and Shawn O'Leary, Dim:tor of Engineering and GencraJ Services. responded to Commissioner Heath's and Commissioner Divine's questions regarding property OWDcrship and estimated cost ortighting. 02-318 Moved by Commissioner Divine, seconded by Commissioner TJJka. to approve both tnmsactiona in concept, and authorize the City Manager and City Aflomey to negotiate appropriate agreements with Sunflower Bank and the Chamber of Commerce. (8.6) Approve the remaining 2002 Vehicle and P.quipmcDt, Phase 1 purchasc3. lason Gage, Assistant City Manager, explained the pun:hases. 02-318 Moved by Commissioner Stwfwic:k. seconded by Commissfoner Divine. to ,pprove the purchase oflbe remaining 2002 Vehicle and Equipment, Phase 1 purchases. Aye: (5). Nay: (0). Motion canied, 02-3189 (8.7)Moved by Commissioner Heath, seconded by Commissioner Ttlka, to recess into executive session for 30 minutes (or preliminary discussion relating to the acquisition of real estate for the reason that public discussion oflhe matter couldjeopardiu the ability of the City to acquire the real estate; and fflCODVfflC at 5:32 p.m. Aye: (5). Nay: (0). Motion cmried. The City Commission recessed into executive session at 5:02 p.m. and rcconvcmd at 5:32 p.m. 02-31 Moved by Commissioner lilka, seconded by Commissioner Divmc, that the City Commission RCOJM:DC into the current er.ccutive session Car an additicmal 15 minutes. A�: (5). Nay: (0). Motion catricd. The City Commission :rriccsscd info executive session at 5:32 p.m. 1111d reconvened at 5:47 p.m. No acllon was taken. OTHER BUSINESS None. ADJOURNMENT 02-3191 Moved by Commissionc:r Shadwick, 1ccoodcd by Commissioner Heath, that the Regular Meeting oflbe Board of Commissioners be adjourned. Aye: (S). Nay: (0), Motion canicd. The meeting adjoumed at 5:47 p.m. [SEAL) AlTEST: �IJeu Ann Nicola, Cily CICik CommlAlal1 �I OTY OF SALINA, KANSAS REGVLAR MEETING OP THE BOARD OF' COMMISSIONERS Febrauy 25, 2002 4:00p.m. The City Commission convened It 3:30 p.m. for a Citizen Open Fonmi. lbe City Comntfaion also met in a Study Session after 1bo regul8r meeting for a City/USO 305 Pn,grmns Briefing. 'Jhe RegnJar Mccting oflhe Board ofCommissionen was called lo order It 4:00 p.m. in Room 107, City-County Building. A n,D call was taken followed by the Pledge ot Allagi1111CC and a moment otsilc:occ. Mayor Kristin M, St.a.ton, Chainnan prcsidiq Commissioner Deborah P. Divine Commissioner Don Heath Commissioner Alan B. Jilka Commusioner Monte D. Shadwick comprising a quorum of the Baird. also present: Absent Greg Bengtson,, City Attorney Dennis M. Kissinger, City Manager Lieu Ann Nicola. City Clcrfc None. CJTIZEN FORUM None. AWARDS-PROCLAMA'DONS (4.1) The day of March J, 2002 u NRead Across America" day in the City of Salina. The proclamation was read by Pat Brcclamitch, Princ:ipal of Saen:d Heart Oradc School. l"UBUC BEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minute& ofFebrumy 11, 2002. (6.2) Resolution No. 02-5813 authorizing a license agrccmcnt with DVACK for construction BIid meintcnancc improvements in the public right-of.way on Walnut and Santa Fe AVCDUe. allowing the r.ovcrcd walkway and a sign to be inountcd to the walkway lll'Uctme. 02-3192 Moved by Commissioner Tub, ICCODdcd by Commissioner Divine, lo approve the CODSalt agenda u pramtcd. Aye: (5). Nay: (0), Motion carried. DEVELOPMENT BUSINESS None. ADMINISTRATION (8.l) Second reading OrdinaDcc No. 02-10071 designating cenain streets as main trafflcways and designating certain additional streets u trafficway comiectlons. Commlsnm Ac:donl __ _ 02-31 02-31 Mayor Seaton clarified that Ordinance No. 02-10071 was passed on first rcadhig on Fcbrumy 11. 2002 and no commcnts have been m:elved. Moved by Owmi•sirmer Shadwidc, seconded by Commissioner Tllka. to adopt Onfiance No. 02-10071 on second reading. A n,D call vote was taJcm. Aye: (5) Divine, Heslh, Jilka, Shadwfc:k. Seaton. Nay; (D). Motion canicd. (8.2) First rcadiIJg Ordinance No. 02-10070 amending Chapter 39, Article IV and V oflhe Salina Code pertaining to trees and shrubs. Steve Snyder, Dircc1or ofParb and Remation, explained the proposed chacges. He aJso responded to Mayor Seaton•• question Rgllrdiug public education. A discussion followed with Commissioner Heath, Mayor S=ton. City Manager Dennis Kissinger, and Mr. Snyder regarding required pennitr and employee staffing. Moved by Commissioner Divine. seccmdcd by Commissioner Heath, to pass Ordinance No. 02-10070 on first reading. Aye: (S). Nay: (O). Motion carried. (8.3) Resolution No. 02-5810 authorizing an Bxtemion Agreement and Amendment No. Three to a contract with Salina Community Access Tclcvislon extending the agreement 1mtil Fcbrwuy 3, 2007. Dcanis Kissinger, City Manager, explained 1hc c:listing agrcanmt and prior amcmmmts. Commissioner Divine complimented Salina Community Access on their efforts. 02-3195 Moved by Commissioner Heath, SC!CODdcd by Commissioner Divine, to adopt Resolution No. 02-SSJO. Aye: (.5). Nay: (0). Modcn carried. (8.4) Resolution No. 02.SS 14 appointing members to various boards and commissions. Mayor Seaton read 1he apPOint:rnenu. 02-3196/Moved by Commiuioner Shadwick, seconded by Commissioner Jilka, to adopt Resolution No. 02-5814. Aye: (.5). Nay: (0). Motion carried. (8.S) R.equerl fiom the North Salina Pastors Association (N.S.P .A.) for a waiver of the regular rental chiJses at 1he Bicentennial Center for a 24--hour Pnycr Vigil sponsored by the N.S.P .A. Damis Kissioger, City Manager, e,q,lamcd the rcquer;t. the Bicmttnnw Ceater-'1 intended use, and the nmtal agreement charge. Gn:g Bengtson. City Attorney. cxpwncd the legal issue raised by the request. Mr. Kissinger responded to Ma:yw Scaton's question regarding communications with the rcquestor. Jeanette Curtis, North Salina Pastors Association, expJai.ncd reasons to grant the n:quest. A discussion followed behffln Commissioner Shadwick and Mr. Kissb,gerregarding the waiver or fees for 1he city-wide event for honoring police omccn ml fire fighters. 02-31 P Moved by Commissioner Shadwick, 1CCOndcd by Commissioner Jilka, to deny 1hc fee waiver :request for legal reasons. Aye: (S). Nay: (0). Motion carried. OTHER BUSINESS None. CcmmLntou �! 02-3J9 ADJOURNMENT Moved by Comminioner Talka, 1C1COI1dcd by Commissioner Divine, that the Regular Meeting of the Board ofCommissionen: be adjoumed. A.ye: (S). Nay: (0). Motion carried. The meeting adjoumtd at 4:32 p.m. (SEALJ A'ITEST: � Lieu Aim Nicola, City Clerk (Publi!hcd in the Salina Ioumal on Februuy , 2002) ORDINANCE NUMBER 02-10071 AN ORDINANCE DF.SIGNATING CERTAIN STREETS AS MAIN TRAFFICWAYS PURSUANT TO K.S.A. 12-QIS AND DESIGNATING CERTAIN ADDfflONALSTREETS AS"IRAmCWAY CONNECDONS PURSUANT TO K.5.A.12-C586, AND REPEALING ORDINANCE NUMBER 93-95li2. BE IT ORDAINED by lhe Govc:mmg Body oflhe City of Salina, Kansas: fi!,dfog J. The prinwy function of the ltrccts descn"bcd in this section is hereby found to be the movement of through traffic between areas of concentrated activity within the city or between such areas within the city end craffic facilities ouuide the city perftmning the function of a major traffic:way, based upon the following: A.ASH STREBT is a major collector meet nnming east from Broadway Boulevard to Ohio Street and iB a principal street carrying east/west traffic through the center portion of the City. B.BELMONT BOULEVARD is a major artmal metnmning southwestfrom Ohio Street to Ninth S1Jeet and is a principal street cmyingsouthwestlnOJ1hcast b'affic through the southcut portion of the City. C.BROADWAY BOULBVARD is a major arterial street naming westand soulh from North Ninth Stleet and Pacific Avenue and is aprincipal street canying nonhfsouth traffic on the west side of the City. D.CENTENNIAL ROAD is a major mterial street nmning north fromWatetwell Road to West Crawford Avenue and is a principal str=tcarrying north/south traffic through 1he west portion of the City. E.CLOUD STRBET is a major collector street naming cast fiomCentemiia1 Road to the llood lcvcc system cast ofOhio Sln::et mid is aprincipal street canying east/west traffic through the soullH:entraJportion of the City. F.COUNTRY CLUB ROAD is a major arterial l1n:et nmning wcrt .fromthe east city Jim.It line to Maiymcnmt Road and is a principal stn:etcarrying east/west traffic through the em-central portion of the City. G.CRAWFORD A VENUB is a major arterial stz=t l1lDDlll8 cast from oneor the 1-135 intc:rcbanges into the City. to the east City limits and is aprincipal street carrying east/west traffic through 1he central portion orthe City. H.IR.ON AVBNUB is a major arterial III=t cmrying traffic bctwc:cn theCity's central and castcm commcrcial districts and u a principal � canying east/west lraflic through the north-cmtral portion of the City. L MAGNOUA ROAD is a major arterial street nmning east .from thewest city limits to the cast city lfmjts ml is a principal street carrying cast/wat traffic through tho south portion of the City. J.MARKLEY ROAD is a major collector street nmnmg south fromCrawford to Magnolia had and is a principal street canyingnorthfsouth traffic through the east portion of the City. K.MAR.YMOUNT ROAD is a major arterial strMt naming north from Cloud Slrect to Country Club Road and is a principal street c:anyingnorth/south traffic through the east portion orthe City. L.NINTH STREET is a major artcria! street from the north city limits,north of Intmtatc 70 to the aouth city limits near Waterwcll Road - canying lmffic between the City's north central and southern comme:rc:ial districts and is a principal meet carrying north/south traffic through the CClltral portion of the City. M.NORra S'raEBT ii a major mterial street running from the west citylimits to the ea.rt city limits and is a principal street canying east/westtraffic through tho 1101th portion of the City. N.OHIO S1REBT is a major arterial street running south from one of theIntmtatc 70 intmhanges to the south city limits md is 1ho principalstreet canying llOrth/south traffic on the east-central lido of the City. O.PACJFIC A VENUE is a najor arterial street running east .from N'snthStrm to the east city limits and is a principal meet carrying cast/westtraffic through the north pomon of the City. P.RBPUBUC A VENUB la a major collector street running east fromCentennial Road to the east city limit near 1he flood levee l)'Stem andi1 a principal street canying east/west traffic through the south portionofthcCity. Q.SANTA FE AVENUE is a major artc:riaJ street numing north 1iomCJafiin to Otis and is a principaJ street c:anying north/south trafficthmugh the central portion of the City. R.SCHILLING ROAD is a major arterial street running west from OhioStreet to AmoJd Avenue in the Airport llldustrial Arca and is aprincipal street carrying east/west traffic through the south portion ofthe City. S.SOUI'R: STREBT is a major collector street rwmlng east fromBroadway Boulcvmd to Fomth Street and is a principal street canyingeast/west traffic through the central portion of the City, T.STATB STREET ill a miuar arterial street 1U1DW11 cut tiom Interstate135 to the central busim:a d.iSlrict and is a principal street canyingcast/west traffic through the north portion of the City. U.WATER WELL ROAD is a major arterial street running weEt fromN'mth Street through the south end of a m,jor indaslriaJ ma to AirportRoad, and is a prim:jpaJ atrcet canymg east and west tlaffic betweenmajor industrial commercial and Interstate J3S inten:hmges. Sffllop 2. That Aah Strcc:c, Belmont Boulevard, Broadway Boulevard, Centennial. Road. Cloud Street, Counay Club Road. Crawford Avenue, 1nm Avenue, Magnolia Road, Markley Road, MmymOIJllt Road, Ninth Street, North Street, Ohio StRct, Pacific Avenue, Republic: Avaiue, Santa Fe Avmme, Schilling Road, South Sb'eet, State Street. m>d Water Well Road me bmby designated and established u "main traffic:ways" pursuant to K.S.A. 12-685. Sectfog 3. To provide adequate c:cmncctiom with the Ohio Street main trafficway in order to relieve tnffic eonsestion and initigate traffic safety issues related to the COD11nJction oflhc North Ohio Railroad Overpass and related improvements it is necessary to estshlisb the following as tmfficway connections. A.VAN HORNE STREET -At and near its connection with North Ohio Street. B.YORK STREET-At and near its connection with North Ohio Street. C.UNNAMED FR.ONTAGB ROAD -To be established on farmer North Ohio Streetright�f-way to coanect area streets with realigned Nonh Oblo Street. SmJop 4. That Ordimmce Number 93-9562 i■ hereby repealed. - Seetfon 5. That this ordimncc slwl be in full force and effect ftom and after its adoptionand publication once in the official d1y newspaper. Lieu Ann Nicola, City Clerk Jntroduc:ed: February 11, 2002 Passed: February 25, 2002 Affidavit of. Publication Ord. No. oz..10071 publlc1t1cin ol AFFIDAVIT ,, ___ _.:Kim==N�onvo==od�--,belna duly eworn, declare that I em Iha Amrtlalng �nage, ol THE! SALINA JOURNAL, a dally newepaper publl1hed at Sallna, Ord.No.02-10071 has been eonectlr Hid newal)aJ:ler __ 1 __ CITY 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 Ryan. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shanell Wicks, OtyClerk. AWARDS AND PROCLAMATIONS None. CITIZENS FORUM Lisa Graham, 1310 E. North Street, provided information regarding a case of unequal treatment by Brad Nelson, 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. l\1r. 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 provided her thoughts on the matter. Mayor Davis thanked Ms. Graham for coming to the commission and stated that Mr. Schrage would be in contact with her. Norman Manne!, 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. PuBUC HEARINGS AND ITEMS SCHEDULED FOR A CER.TAJN TIME None. CONSE,'\'T AGENDA (6.1) Approve the minutes of February 25, 2019. Pagel .. w � I 19-0008 (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 VauJt Closure Agreement allowing for closure of an underground vault in the public right-of-way located at 144, 146 and 148 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 S130,649.O5, with a S9,350.95 contingency {7.1 %). Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Resolutjon 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. lvlr. 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. 1\1r. 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 computers 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 fe, .. ,. 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 tmder 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,"'0 in Section 1 and the current Page2 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 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 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, City 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 Ko·wach, 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 half a dozen or less a year for different areas in t0\\'11. Commissioner Hodges asked if preventative maintenance was performed on bridges priorto the need for rcplncement and what 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. Commissioner 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 Manne], Salina, provided his thoughts on the amount of weight a truck can hold. 19-0060 Moved 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). Nay: (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 15th• 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 the target fund balance and the agenda items coming before the City 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 staff's 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. l\1s. 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 Jocal preference policy. 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. J-.1r. Schrage stated it would be up to the Governing Body to determine what the outcome would be. Mayor Davis 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 City Commission regarding local bidder's preference. Norman Manne!, Salina, provided his thoughts on a local bidder's preference. Mr. Schrage stated he was aware of the incident Mr. Mannel was referring to and staff had prepared the documentation to show all information available to give the City Commission the ability to make the best decision. 19-0061 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the 2019 Vehides 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) A\\•ard contract to paint the exterior of five slides at Kenwood Cove Aquatic Park. Jeff Hammond, Recreation Supervisor, explained the project, bids received, fiscal impact and action options. 19-0062 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to award contract to DaleCooper 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 OTHER BUSINESS Commissioner Hodges asked if she could have confirmation on the status of the joint fee agreement. 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 City 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 Hickman 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 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 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 Manager, 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 K.S.A. 75-4319{b)(6). The open meeting will resume in this room at __ p.m. "19-0063 Moved Commissioner Hodges, seconded Commissioner Hoppock, to recess into executive session for 20 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 preliminary discussion Page of the acquisition of real property, pursuant to K.S.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 City Com.missioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:08 p.m. [SEAL] ATTEST: �0� Shandi Wicks, CMC, City Clerk ��r')Trent W. Davis, M.D., l\•Iayor Page6 1ft "' RESOLUTION NO. 19-7677 A RESOLUTION INITIATING PROCEEDINGS BY THE GOVEID\1:NG BODY FOR IMPROVEMENTS TO THE N. 9™ STREET BRIDGE IN THECITY OF SALINA, KANSAS. WHEREAS, by the adoption of Ordinance No. 02-10071 on February 25, 2002, the governing 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 uAct"); and I WHEREAS, the governing body of the City has detennined that it is necessary to improve :1or reimprove ponions of said main trafficway as follows: 1 Removal, replacement and reconstruction of the North 9th Stre�t bridge, and all other related improvements including, but not limited to, right of way acquisition, design, ·1 engineering, construction, consultant inspection, drainage improvements and other related and necessary improvements; and !(the "Improvements"); and WHEREAS, repons� estimates and plans have been compiled and furnished to the governing 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 CITY OF SALINA, KANSAS: ,l Section 1. It is hereby deemed and declared to be necessary to make the Improvements J'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 obligation bonds and/or temporary notes of the City issued under the authority of the Act. Section 3. 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 $2,000,000, plus associated financing costs and costs of issuance. 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 !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 governing body of the City of Salina, Kansas, on March 4, 2019. (SEAL) Trent \V. Davis, �.D.,Mayor (ITEST: :�/tk)tOiA 1:shandi Wicks, CMC, City Clerk 2 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON JUNE 5, 1017 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. Absent: ____________________________ _ The Mayor declared that a quorum was present and called the meeting to order. •• •• • • •• •• • • • • (Other Proceedings) Thereupon, there was presented for first reading an Ordinance entitled: AN ORDINANCE OF TIIE CITY OF SALINA, KANSAS, 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 1HE 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 fol1ows: Yea: Mayor Kaye J. Crawford (presiding). Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges. and Karl Ryan. Nay:---------------------------· •••••••••••••• (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CERTIFlCATE I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the proceedin e . ing body of the City of Salina, Kansas held on the date stated therein, and that the offi . � �!!f �j��� proceedings are on file in my office. (S ��-•• I •••• ... " l o�GA.'-IIZEo \ J '. .. ... ---.. . 0: : ' .. \1\ 1870 i:·:. n • ' I � •• �It'... •• ' •.. ""' ·•.. _,_.· t� ... ·• : lP ...... ,..... . : �t�;;/ (Signature page to Excerpt of Minutes) CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 12, 2017 4:00 p.m. The City 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. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges, and Karl Ryan. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Oerk. AWARDS AND PROCLAMATIONS (3.1) The month of June, 2017 as "Elder Abuse Awareness Month" in the city of Salina. Courtney Train, Domestic Violence Association of Central Kansas (DVACI<) Community Outreach and Engagement Coordinator, read the proclamation and highlighted activities for the event. (3.2) The day of June 18, 2017 as the "lO0th Anniversary of City Management Day" in the city of Salina. Rachel Hinde, Community Engagement Coordinator, read the proclamation. Mayor Crawford thanked the City of Salina management for all of their hard work. CmZENS FORUM None. PuBuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public hearing and report on Petition No. 4386, (filed by Lewis Erickson, on behaU of Foley Equipment Company), requesting the vacation of KDOT 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 Rep lat 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 KOOT 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 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 Treatment 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 onthe Country Oub Road Improvements, Project No. 63143, in the amount of $34,945.30. (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. 17-0158 (6.3) Authorize the Mayor to sign the agreement with Charles and .Kathleen Elsea, 508 E. Country CJub Road, for payment of cost to relocate landscape and related items on the Country CJub Road Improvements, Project No, 63143, in the amount of $34,945.30. Commissioner Blanchard provided his 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 Engineer, stated the improvements to relocate the landscape and related items for 508 E. Country Oub 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-ofway. 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 City of Salina and the property owner but the City 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. I f A �onversation ensued betw�n the Commission, _Mr. �t:'ck and �-Gage regarding the· neighborly approach to returning property back to its onginal condition. IMoved by Commissioner Blanchard, seconded by Commissioner Davis, to authorize the Mayor to ·sign the agreement with Charles and Kathleen Elsea, 508 E. Country Oub Road, for payment ofPage2 � f .t .l! i t 8 17-0159 cost to relocate landscape and related items on the Country aub Road Improvements, Project No. 63143, in the amount of 534,945.30. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Second reading Ordinance No. 17-10884 changing the zoning district classification from R (Single-Family Residential) to 1-2 (Llght Industrial) on property addressed as 1123-1127 Van Home . Mayor Crawford noted 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 reading. A roll call vote was taken. Aye: (S) 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, Crilwford. Nc1y; (0). Motion carried. (7.4) Second reading Ordinance 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 city; 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, City Manager, stated the new potentia] 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- 1 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 Rail 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) )'ears old and in good shape with good structural hand rails. He continued to state the bridge would 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 cover 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 far future projects. 17-0164 Moved by Commissioner Hodges, seconded by Commissioner Blanchard, to award the contract forProject No. 70015, 2017 Bridge Painting to Thomas Industrial Coatings of Pevely, MO in the amount of $70,400.00 with a 10% construction contingency ($7,040.00). Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTHER 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 STAR Bond legislation. Jason Gage, City Manager, stated the Kansas House of Representatives and Kansas Senate approved a tax bill 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 11-01is IL Ill 17-0166 continued to state that the ST 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 (legal). 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: {O). 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] AlTEST: �LOW Shandi Wicks, CMC, Oty Clerk Page 5 Summary published in The Salina Journal on June .!2...., 2017 P2s1cd oo rbe c;ty oC SaJioa websi1e from June ·) ,; _ 1 ;J , 2017 ORDINANCE NO. 17-10885 AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING AND PROVIDING FOR TIIE CONSTRUCTION OF CERTAIN IMPROVEMENTS RELATING TO THE SMOKY ltILL RIVER RENEWAL PROJECT IN THE CITY; AND AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO PAY THE COSTS THEREOF. WHEREAS, K.S.A. 12-63lr(a) et seq. (me "Act") provides, in part, that whenever the governing body of any city detennines it is necessary to construct stonn sewers, channels, retention basins or drains for the purpose of managing the stonn drainage areas of all or any portion of such city and in the unincorporated areas outside of but within three miles of the corporate limits of such city, the governing body may authorize the construction of such stonn sewers, channels, retention basins or drains, such construction shall be authorized by ordinance; such ordinance shall designate where such stonn sewers, channels, retention basins or drains shall be located; and WHEREAS, Anicle 12, § 5 of the Constitution of the State of Kansas (the "Home Rule Amendment") and K.S.A. 12•101 empowers cities to detennine their local affairs and government and provides that such power and authority granted thereby 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 Rule Amendment; and WHEREAS, the Project (as defined below) is located within the boundaries of the City, and there is no enactment oft.he Kansas legislature which authorizes the City to issue general obligation bonds to provide funds to finance the ponion of the 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 welfare of the City and its citizens, the governing body of the City has considered the need to construct certain stonn sewer, river, trail, street and related improvements within the 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 structure and ending at the flood control levee-outlet structure), including any land acquisition necessary therefor, all pursuant to the Smoky Hill River Renewal Master Plan, including, but not limited to: removal of sediment, dredging, filtration, channel cleaning, reS1oration of stream now, installation of a concrf:te channel and other various in-channel river improvements, the consb'Uction of a multi•use hiking and biking trail, sidewalk construction and improvements, replacement of drainage pipes and other storm se,ver and drainage improvements, consuuction of bridges, various landscaping and aesthetic improvements, and all things necessary and appurtenant thereto WHEREAS, the governing body of the City hereby further finds and determines that it is neccssazy 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 funds to finance the Project. NOW, THEREFORE, BE IT ORDAINED BY TIIE GOVERNING BODY OF THE CITY OF ,!SALINA, KANSAS: Section 1. Public Benefit. the City and that to 0885, PASSED by the go\'eming body of the City of Salina! Kansas, on June 12, 2017 and APPROVED AND IGNED by the Mayor. � SEAL) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Signature Page to Ordinance) PUBLICATION SUMMARY OF ORDINANCE NO. I 7•10885, PASSED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE 12m DAY OF JUNE, 2017 SUMMARY On June 12, 2017, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. J7·1088S, authorizing and providing for the construction of certain improvements relating the Smoky Hill River Renewal Project in the City. The complete text of this ordinance m&)' 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. ified this 121h day of June, 2017. Publish one time and return one Proof of Publication to the City Clerk and one to the City Attorney f Publisher's Affidavit l, __ ,..Qt,l,&l,ldwi.,�1J.•_.FiL.1,Un,1:1,k ___ , being duly sworn declare that J am a J q;al Cnm:dinatm Clf TiiE SAUNA JOURNAL, a daily newspaper published al Salin11, Saline Count}', Kansas, and of general circulation in said count)·, which newspaper hM bl-en adnutted to thl' mnils as Sl"("ond class matter in said county, and continuously and uninterruptedly published for five consecuti\-e years prior to first . \\: ... . . publication of attached nolicc, and that the Ordinance 17•10885 Notice has been correctly published in the entire issue of said newspaper om-lime, publication being given in the issue of Junc.-15, .mZ" C,yq i SW\ t;-; )L Su�cr.ibed and sworn to befuw me, this /_b � _ A.D.20 .L2 Printcr•s Fee � CITY OF SALIN A, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS February 24, 2020 4:00p.m. 4:00 107, and L. AWARDS A.'1D PROCLAMATIONS CmZENS FORUM Page I Mr. Manne! also asked what the City of Salina \Vas doing for the flu viruses in the community. Mr. Schrage stated that the City of Salina relied on the health department to handle those matters. Commissioner Davis provided information regarding the types of flu viruses and noted that personal hygiene was the most important. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME Public hearing authorizing the completion of an application to the Kansas Department of Health and Environment {KDHE) regarding a loan from the Kansas Public Water Supply Loan Fund (KPWSLF} Project No. 2997. (5.1a) Resolution No. 20-7795. l\fayor Hoppock opened the public hearing. Martha Tasker, Director of Utilities, explained the project, and fiscal impact. Commissioner Davis asked if the plan was to focus on the areas there were problems or to replace all of the mains. Ms. Tasker stated the focus was on the six (6) inch pipes and the problem areas. She continued to state all of the water mains may not be replaced. Commissioner Franz stated the older cast iron pipes were not having problems no matter the size. Ms. Tasker stated the older cast iron pipes no matter the size were better than the newer pipes installed. She continued to provide information on the problem areas and sizes. Commissioner Hodges stated we \\'ere looking at approximately 25 years to 40 years to get all of the six (6) inch pipes replaced. Ms. Tasker stated she thought the project could be completed in 15 to 20 years. Michael Schrage, City Manager, provided information on the strategy staff used on looking at water line and water mains when street work was scheduled to be done in case it could be coordinated. A conversation ensued betv.•een the City Commission and Ms. Tasker regarding water main breaks. Mayor Hoppock stated the project was a $2 million dollar project. ?vis. Tasker stated it would actually be two (2) $2 million dollar projects. Mayor Hoppock asked from looking at the chart prepared by staff, he noticed in the 2014 to 2016 the state revolving fund was at 2.43% and asked if there was a pre-payment penalty or if the loan could be refinanced. Ms. Tasker stated you can pay those off but she was not had conversations ·with the Kansas Department of Health & Environment (KDHE) about refinancing a loan. She continued to state you could pay the loan off or do something different without penalties. Mr. Schrage stated staff have had refinancing conversations with bond counsel and can get back with bond counsel to continue that conversation. Norman Manne!, Salina, asked where we were on the air base cleanup. ivlichael Schrage, City Manager, stated we were currently in mediation with the federal government for the federal government to contribute the bulk of the cost. He continued to state the cleanup was estimated at $68 to $100 million dollars. There being no further comments the public hearing \-Vas closed. Ms. Tasker listed the action options for consideration. Page 2 I I z "w " C Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 20-7795 authorizing the completion of an application to the Kansas Department of Health and Environment (KDHE) regarding a loan from the Kansas Public Water Supply Loan Fund (KP\·VSLF) Project No. 2997. Aye: (5). Nay: (0). Motion carried. CONSENT AGENDA (6.1) (6.2) Approve the minutes of February 10, 2020. Award contract for 2020 Microsurfacing, Project No. 20014 to Vance Brothers, Inc. of Kansas City, Missouri, in the amount of $574,888.37 with a 525,111.63 (4.4%) construction contingency (S600,000 authorization). (6.3) Approve Resolution No. 20-7793 appointing members to various boards and commission. Commissioner Hodges requested that Item 6.2 and 6.3 be removed from the consent agenda. 20-0060 Moved by Commissioner Hodges, seconded by Commissioner Davis, to approve the minutes ofFebruary 10, 2020 as presented. Aye: (5). Nay: (0). Motion carried. (6.2) Award contract for 2020 Microsurfacing, Project No. 20014 to Vance Brothers, Inc. of Kansas City, Missouri, in the amount of $574,888.37 with a 525,111.63 (4.4%) construction contingency (5600,000 authorization). Commissioner Hodges wanted to confirm if the manholes would be adjusted as the project was occurring or as a separate project. Jim Kowach, Director of Public Works, stated the manhole adjustments would be done as part of the projects. He continued to state the manhole adjustment project coming soon would cover the projects from the last couple of years. 20-0061 ?\foved by Commissioner Hodges, seconded by Commissioner Davis, award to contract for 2020 Microsurfacing, Project No. 20014 to Vance Brothers, Inc. of Kansas City, Missouri, in the amount of S574,888.37 with a $25,111.63 {4.4 % ) construction contingency {$600,000 authorization). Aye: (5). Nay: (0). Motion carried. 20-0062 (6.3) Approve Resolution No. 20-7793 appointing members to various boards and commission. Commissioner Hodges felt it was important to disclose and recuse herself from voting for her mother-in-laws position with the Community Art & Design Committee appointment. Mayor Hoppock noted that an appointment was originally on the resolution for the Arts and Humanities Commission but was removed due to an opening listed in error. 1\•Ioved by Commissioner Ryan, seconded by Commissioner Davis, to adopt Resolution No. 20-7793 appointing members to various boards and commission. Aye: (4). Nay: (0). Abstained: (1) Hodges. Motion carried. ADMINISTRATION (7.1) Resolution No. 20-7801 setting the date for a public hearing to consider whether a dangerous structure at 320 E. Bond Street shall be condemned and ordered repaired or demolished. Page 3 120-0063 0. w .. C 120-0064 I Sean Pilcher, Building Official, explained the dangerous structure process, property, fiscal impact and action options. Moved by Commissioner Ryan, seconded by Commissioner Franz, to adopt Resolution No. 20- 7801 setting the date for a public hearing to consider whether a dangerous structure at 320 E. Bond Street shall be condemned and ordered repaired or demolished setting April 6, 2020 as the public hearing date. Aye: (5). Nay: (0). I\1Iotion carried. (7.2) Resolution No. 20-7809 providing for the acquisition of fire-fighting equipment, providing for the issuance of general obligation bonds of the City of Salina to pay for such equipment and authorization to publish the Notice of Intent. Debbie Pack, Director of Finance & Administration, exp1ained the acquisition, bond issuance, fiscal impact and action options. Commissioner Franz asked what the anticipated temi was on the bonds. Ms. Pack stated 20 years and 15 years respectively. Commissioner Hodges stated the current unit would be in reserve for 5 years and asked what would then happen to that unit. Ms. Pack stated her understanding was the current reserve unit would be sold and the current 2000 unit would be put into reserve until the next purchase. Commissioner Franz stated it was noted it was difficult to get parts for the current unit and asked if it made more sense to keep the currently reserved unit instead of the 2000 unit. Ms. Pack stated she could definitely discuss this with fire department staff. Moved by Commissioner Davis, seconded by Commissioner Hodges, to adopt Resolution No. 20-7809 providing for the acquisition of fire-fighting equipment, providing for the issuance of general obligation bonds of the City of Salina to pay for such equipment and authorization to publish the Notice of Intent. Aye: (5). Nay: (0). Motion carried. (7.3) Resolution No. 20-7804 terminating the City of Salina subscription recycling program. Jim Teutsch, Operations Manager, explained the program, fiscal impact and action options. Commissioner Hodges asked what the net saving would look like with the reduction in staffing. Mr. Teutsch stated there would be a 50 cent increase for 2020 and no increase in 2021. He continued to note the-truck purchase \.Vas $145,000 and a worker/driver position was approximately 545,000. Commissioner Franz asked how long a truck lasted. Mr. Teutsch stated ten (10) years. Commissioner Franz stated that would be approximately S14,000 a year. Michael Schrage, City l\1lanager, stated staff had estimated that the actual cost of providing the service was about 519.75 compared to charging 55.50. He continued to state if you look at that difference for 800 customers over 12 months, by his math was $137,000. Mayor Hoppock stated that amount did not cover the additional costs such as the tipping fees. Jim Kowach, Director of Public Works, stated the position that would be eliminated in the transition would be moved over into a similar position and there would not be any layoffs involved. Commissioner Davis provided his thoughts on the discontinuation of curbside recycling, other recycling options, and showed a video regarding recycling. Page4 I I 120-0065 Commissioner Hodges provided her thoughts on recycling and asked if every participant in curbside recycling participated at a $10 level, then the program would pay for itself. �·Ir. Teutsch stated yes, shifting to 1,000 subscription recycling carts initially and charging each customer S10 a month. He continued to state from an operational standpoint we would be able to expand the number of customers in the program to 2,000. He further stated the missing math piece was if there would be enough customers interested in paying the higher amount. Commissioner Davis asked if the question could be added to the upcoming survey. Ivlr. Teutsch stated he would prefer to have the question as a separate survey but could talk to the cart provider. Mr. Teutsch stated the program was closed and we had not actively advertised the program . .lvlr. Kowach stated the program was closed as of the study session due to the intent of the commission. A conversation ensued between the City Commission, Mr. Kowach and Mr. Teutsch regarding the curbside recycling program, the outlet for recycling and use of trucks. ivlayor Hoppock asked what our life expectancy was for our landfill. �-Ir. Teutsch stated approximately 150 years. Commissioner Davis asked how much dirt we had to cover. Mr. Teutsch stated there ·was a shortfall in material but it would be at least 50 years before we would notice the shortfall. He continued to provide information on the process of landfill cell creation and ·ways to obtain the shortfall. Commissioner Franz provided his thoughts on recycling and asked hm\' many participated in curbside recycling. Mr. Teutsch stated 798. Commissioner Franz stated that the remaining 19,200 were served by the recycling center. l'vlr. Teutsch stated yes. Commissioner Franz asked if the almost 800 additional househo]ds could be serviced at the drive-thru recycling center. Mr. Teutsch stated absolutely. Com.missioner Franz asked if there was more than one private recycling company. Mr. Teutsch stated not that he was aware of. Commissioner Franz asked if we could include in the letter the private recycling hauler. Mr. Schrage stated with it being one provider, he thought it could be included. Mr. Teutsch stated then yes. Commissioner Franz continued to provide his thoughts on the current curbside recycling program and the drive-thru recycling center. Commissioner Davis asked how many participants utilized the drive-thru recycling center. Mr. Teutsch stated approximately 250 per day. Mayor Hoppock stated the drive-thru facility was currently not open every day and could maybe be expanded. Mr. Teutsch stated that staff had been keeping statistics daily with the intent to go to the city manager soon to discuss the hours of operation. Ken Reitz, 1314 Park\.vood Drive, provided information on a recycling program that he ran. David Norlin, 608 E. Republic, provided his thoughts on recycling, the need to promote recycling and the house bill on plastic bags. Commissioner Ryan provided his thoughts on the program and the life of the landfill. Moved by Commissioner Ryan, seconded by Commissioner Franz, to adopt Resolution No. 20-7804 terminating the City of Salina subscription recycling program. Page 5 I I I 20-0Cf66z a. w .. C 20-0067 Commissioner Hodges stated it was harder than recycling because we have a market for it and it would hasten the need for remediating the methane gas. 1vlr. Teutsch stated in the next 5 to 10 years we will have to build a system for the methane gas. He continued to provide information on the collection of yard waste. :Moved by Commissioner Ryan, seconded by l\'1ayor Hoppock, to adopt Resolution No. 20-7805 directing staff to provide the required 90-day notice and terminate the current agreement ·with Kanza Organics for processing yard waste for the City of Salina. Aye: (3). Nay: (2) Davis, Hodges. :Motion carried. (7.5) Resolution No. 20-7808 establishing sanitation refuse collection and Salina DriveThru Recycling Center (SDRC) rates effective as of the first billing cycle beginning April 1, 2020, not previously approved in the latest Comprehensive Fee Schedule of the City of Salina. Jim Teutsch, Operations !\•tanager, explained the program, the agreement, fiscal impact and action options. Commissioner Hodges asked what the threshold would be for revisiting the transporting to Stutzman's and the types of recycling materials we are collecting. Mr. Teutsch stated that staff would need to come before the City Commission again to discuss some other options. Commissioner Franz asked how many trips we make in a year to the material recovery facility (MRF). Mr. Teutsch stated approximately 75 trips. Commissioner Franz asked how close we were to operating our own MRF. ivlr. Teutsch stated not close, it would require at least 10,000 tons a year and it would not be feasible for us in the near future. Ken Reitz, 1314 Parkwood, provided his thoughts on recycling collection. Moved by Commissioner Ryan, seconded by Commissioner Davis, to adopt Resolution No. 20-7808 establishing sanitation refuse collection and Salina Drive-Thru Recycling Center (SDRC) rates effective as of the first billing cycle beginning April 1, 2020, not previously approved in the latest Comprehensive Fee Schedule of the City of Salina. Aye: (5). Nay: (0). Motion carried. (7.6) Sanitation Trucks and Carts (7.6a) Resolution No. 20-7818 providing for the issuance of general obligation bonds to pay for six (6) fully automated refuse trucks and authorization to publish the Notice of Intent. (7.6b) Resolution No. 20-7806 authorizing the r-.fayor to sign an agreement to purchase six (6) fully automated refuse trucks. (7.6c) Resolution No. 20-7807 authorizing the l\fayor to sign an agreement to purchase new 93-gallon refuse carts. Jim Teutsch, Operations Manager, explained the program, the agreement, fiscal impact and action options. Commissioner Davis asked what the material the seats were made out of. Mr. Teutsch stated cloth and noted a staff error regarding the seat type in the bids documents. Adam Hlad, Summit Truck Group, asked if the City Commission had any questions regarding the chassis portion of the bids and provided information on additional options and value to the trucks that Summit Truck Group could provide. Page 7 I I I c.. w ., .S a Ken Reitz, 1314 Parkwood, provided his thoughts on the trucks and amount of trash collected. Commissioner Davis asked if Mr. Hlad's point was a consideration in the bidding or a deficiency in the other trucks. Mr. Teutsch stated it was not something staff looked at but we welcome his input because it was an additional feature. He continued to state it was a feature that was used on landfill equipment now and it was a technology application that allows the technician to identify faults before the driver did and it allowed code revisions to the system, if necessary, and over time could help reduce the cost of maintenance. He further stated the program was not included in the specifications for the bid primarily because that company was the only one that offered the service and staff did not want to eliminate any potential bidders because of the program. Commissioner Hodges stated that she had forwarded an email regarding a small community that was looking at acquiring possibly 100 of our old carts to recycle for their o,.,,n city and didn't know if staff had been able to connect with that gentleman. Jim Kowach, Director of Public \-\1orks, stated that the way the bids were setup, the carts were not our property and were to be disposed of by the low bidder. He continued to state that if the lower bidder didn't want to return the carts or recycling them as they were required to do, that another community \·\'ould be interested in reusing them and reuse of the carts was acceptable to staff. Mr. Teutsch stated that staff would absolutely pass that information on to Schaffer. Commissioner Franz asked if an education program on the new trash program was developed. Mr. Teutsch stated that staff had drafted a staff position for an E3 coordinator that would need to go through the processes for establishing the position. Mayor Hoppock asked when staff expected delivery of the trucks and carts. Mr. Teutsch stated about a year but the general obligation bond protest period could move that timeframe. Commissioner Hodges asked if the specific type of truck would commit us to a single source collection. Mr. Teutsch stated the model of single stream collection was the market standard. Commissioner Davis asked if the carts being black ·would be hard to see. Mr. Teutsch stated that he had not known of a community that a black cart was not a problem. He continued to state the company that the City of Salina had used went out of business and the current new carts were black. Commissioner Davis asked which side of the road the driver would drive on. Mr. Teutsch stated the trucks were equipped to allow the driver to sit on either the left or right side. 20-0068 l\•1oved by Com.missioner Ryan, seconded by Commissioner Davis, to adopt Resolution No. 20-7818 providing for the issuance of general obligation bonds to pay for six (6) fully automated refuse trucks and authorization to publish the Notice of [ntent. Aye: (5). Nay: (0). 1'\fotion carried. 20-0069 ri.foved by Commissioner Ryan, seconded by Commissioner Franz, to adopt Resolution No. 20-7806 rejecting the bids from Downing Sales and Service as they are considered non-responsive and authorizing the Mayor to sign an Agreement to purchase of six (6) fully automated side-load refuse trucks from Elliot Equipment Company for a total price of $1,553,584.00. Aye: (5). Nay: (0). Motion carried. Page 8 120-0070 z 11-w ., C: =a ti} I 20-0071 I 20-0072 Moved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 20-7807 rejecting the bids from Toter, LLC for not bidding to recycle the existing carts, rejecting the Bids from Otto Environmental Systems North America, Inc. for not meeting the specifications, and authorizing the Evlayor to sign an agreement with Schaefer Systems International, Inc. to purc;hase and deliver approximately 18,800 refuse carts at a unit cost of $46.77, collect and recycle approximately 22,000 existing carts at the unit price of $6.99, for a total of $1,033,056.00, with a 10% contingency of S103,305.60, (total authorization for $1,136,361.60). The number of new carts purchased and old carts collected may be adjusted higher or lower to account for the actual number of carts determined in the customer survey. Aye: (5). Nay: (0). Iviotion carried. The City Commission recessed at 6:57 p.m. for a 8 minute break. The meeting resumed at 7:05 p.m. {7.7) Resolution No. 20-7819 authorizing the Mayor to execute an agreement with Saline County addressing the prisoner housing, emergency dispatch and related services. Michael Schrage, City Manager, explained the agreement, staff working group, fiscal impact and action options. Commissioner Franz commended staff for trying to develop a better plan and hoped for a better outcome. Commissioner Davis asked if there was any reason why the county provided for routine health care and \Ve covered the emergency services. Ivlr. Schrage stated there were statutory obligations that required the arrangement as it was. Moved by Commissioner Hodges, seconded by Commissioner Franz, to adopt Resolution No. 20-7819 authorizing the i\'1ayor to execute an agreement with Saline County addressing the prisoner housing, emergency dispatch and related services. Aye: (5). Nay: (0). i\•lotion carried. DEVELOPMENT BUSINESS (8.1) Application #219-11, (filed by Lee Haworth Construction Co., Inc.) requesting a change in zoning district classification from A-1 (Agricultural) to R-1 (Single-Family Residential) on a 9.82 acre tract of land located on the north side of Cedar Ridge Drive between Grand Prairie Addition and the Briargate Addition south of the Salina Municipal Golf Course. (8.1a) First reading Ordinance No. 20-11028. Dean Andrew, Director of Planning, explained the request, public utilities, Planning Commission recommendation and action options. Commissioner Franz asked what the average lot size was in the proposed development. ivlr. Andre,,, stated 10 to 12 thousand square feet. He continued to state the lot sizes were less than Cedar Ridge Addition and Grand Prairie Addition. Bob Haworth, 913 Twin Oaks Drive, asked for the item to be considered for a zoning change and thought it was the best use of the area. Mayor Hoppock asked if it would be done in h-vo (2) phases. Mr. Haworth stated possibly, he might try to do it in one (1} phase. Moved by Commissioner Davis, seconded by Commissioner Hodges, to pass Ordinance No. 20-11028 on first reading changing the zoning district classification from A-1 (Agricultural) to R-1 Page 9 I I I (Single-Family Residential) on a 9.82 acre tract of land located on the north side of Cedar Ridge Drive between Grand Prairie Addition and the Briargate Addition south of the Salina Municipal Golf Course. Aye: (3). Nay: (0). lvfotion carried.OTHER BUSINESS Commissioner Davis mentioned potholes on Magnolia at the 1-135 overpass. Commissioner Hodges thanked Chief Nelson for responding to her questions regarding parking in the center lanes dmNntown. She also thanked Lauren Driscoll for her response. Commissioner Franz asked if delivery drivers could park in the center lane. Jim Kowach, Director of Public Works, stated yes. ADJOURNMEl\'T 20-0073 Moved by Commissioner Ryan, seconded by Commissioner Davis, that the regular meeting of theBoard of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 7:32 p.m. �/ � [SEAL] ATTEST: �vJr..ui Shandi Wicks, CMC, City Clerk Michael L. Hopp k, .Mayor Page 10 Publisher's Affidavit I, Christy Fink , being duly sworn-----"-------- declare that 1 am a Legal Coordinator ofTHE SAUNA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, v,hich ne,vspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive yP.ars prior to first publication of attached notice, and that the attached Resolution #20-7818 notice has been correctly published in the entire issues of said ne,•1spaper ______ lw_o _______ times, towit-once each week fo,�· ____ _,_tw..._.c1'-------- consecutive weeks, the first publication being given in the issue of February 28, 2020 c�¼S\_;.,l �JL Su bscribe.d and sworn to before m;, this / (JI-A Printer's Fee $441.00 2-0 AD,20 -- Notary Public fFirot Publishoo h Iha Sa!'lll! JOU,nal !'etm,aiy 28. 2020i RESOLtmON NUMBER 2D-78l8 A RESOLUTION PROVlO!Nf FOR THE ISSUANCE o= TEMPOIWlY NOTES AND/ OR GENffiAl OBLIGATK>N BONOSOF i1£CliY OF-sAUNA. KANSAS TO FINANCE �utPMENT M:CESS�RY F-OR The CITY'S MUNICiPAL SCUD �l'ASTE SERVICES. Wl!EllEAS. the Ont lri Salina, Karisas ;&,. 'Cily'), w.eci; aflll dispenses of $01id me as a m\Jli;ipal fuootiOO ll!lffl lhE laws o! tne Slala ol Kansas. lrldudi,,g K &A 12-210: � seq. (me 'Ac!"/; and WHEIIEAS, �111! Gow,mi<lg · Bod'! ofllie C;iy llerel)1 fi'1ct. ;;'Iii de.e-mirn;s :11at 1 is r.ooessa)' 10 acc;urre ceft\lh equ;pmsm �'lllf to UIS Cr,y's S?iid waste se111i:es, ,111::,dbg six fuhy alllometed ralus8 :roi:ts !tile 'Equipment' 1 arnl lhat ttie Cft} has fnsufficlEl,t lulldsto pay iorllie elltire oost of \he Equ,?mert at tt;; present time; am! WHEREAS, me City hereby �nds and !k�eim,nes Illa! !I IS n!Cflfflry klr IM City to issue its temponuy nCl1es aM! or general obligat1011 bonds {lhe 'Obligations') to paytlle COS! OHM . Equipm9nt: NOW, iffEREFORE, BE IT RESOLVEDBYTHEGOVERNING BODY OF THE CITY OF S�UNA, KANSAS; Seelfon 1. It is lwreby deemed and dedared to be necassary for too Cr.v to ma!ll 1mpro1'elllants tu Ille City's solid -; 'Sle lacirr.y as desc1ibed above. Sectioo 2. h IS neteSSllry ID' the Ci:y to issue i\'S ObllgaMrili lo Ille i;&fl!l900Sloi1he Equ,pmer,t In tilll lllllJUOI of $1600,000 p!us Iha cos:s of isSU.'"ll! l!l1d llllere51 on w11 !r,mpr:rrary f;nanc,ng ur:ii<, the l.llt�,mr of 1he Act l!'lj K.S A. 10·1N et<mQ ,-:r"\�N;;o;:;-,A;;:R;;;Y -;:::P!J"";:87'.'LJC:--.-S:-ia-tr:_o_f x-, an-�-,.-c:a/6 -w Q�� f:0,. :•:.-� ENDY CHROBAK ·--�·«•� ... 11 ' s>i. __ ··-::_ __ _:y�1 fxp."t:.._� -io� --.,-..---c::;:::=� Sectlon 3. Be!nre ,ssui,g ll'e ()b:igaM�S, IM re.ot.ition Slliil !le cu!fahtd 0t i:e eac,1 wool\ for lw: co,i.�,;111,111 fflil.S in lr.e otr.:,i: C,li' newspap,;r The Obl)l1iol'S mav be iSs�i unfllss a t>ellllOl, ,i lijlp!)Sllio� 111ere10, �� b; Ml less tta, 6', d Ille eledors ol tne City, ;s flee w lii. !he Counlr Eiecti/J!l Office of Sal<ne Coooty wittrn 30 cla)'S b!lowng me se:ond l)Ublt:a!ion of tho re.olu\ioo. U sud\ !)!!lil!Oil ;; ii'.eo. he govemlll'J bally ,! 1'1e City shal. s.t,1\i'. Illa quesl� o! Iha issllalltll of the ObJigarkin! tor th& &Jui;,aern to tr;; etectois of the City ii! an elllcil(lll cal!ed for sxt, puljlOSe as p;omc-ll lll lt.e Act tt no sufff.:ien: petilio,1 :s llee with ll>e Cowl/ Eiect100 ilflcer of Sarene .eoomy w,:tr11 Lie pe'10d ot � jlereinoelwe si,teo. the<\ tho go�'!l!!',g M-:1)' of me C!tl' sha, proceed ii!J1 Ille ioSll<lilel! �· th. Obli;iallons fD•ttie Eqc,pmerJ. Sett1o!1 4. The Ci!y has lncumld 01811'l!<r.ary expenditures ar;l exped; to mak5 err,.w.i1ture$ on aod alte! the dote ot adopt'<lfl of 11wi 18S()iufloo 1n -� with 111& �er,:, �rd Jllern!s to 1e;mbc1Se Ilse� for suell expendirures wrtll lh<l p!OOO'Jds o: the QbligaliOrs of the City wlllC!l am �xpected to be !SS•ioo In lr"1 f!IBX!mum prillclr,al !llllllud of S1 ,600,000 plus 1t,e costs or issuance ana inleresi en any temporary�naneing. �cllon 5, This resofJ.!on shall be in full force and effect from and alter 115 aooption. ADOPTED by the GO'lernirig Belly on February 24, 2020 (Se.II) ATTEST- Mi::r.aall K9PP')Ci\,Ma\'ll' Shandi\'{�s WC, Ci!y G•e•h 12tsJJI CERTIFICATE OF NO PROTEST I, Jamie R. Doss, Cmmty Clerk and Election Officer of Saline County, Kansas (the "County"), do hereby certify that within 30 days following the date of the second publication of Resolution No. 20-7818 of the City of Salina, Kansas, which resolution authorized the issuance of general obligation bonds to pay the costs of certain solid waste equipment, no protest petition signed by 5% of the qualified electors of the City was filed with my office in accordance with the provisions ofK.S.A. 12-2101 et seq.Dated: JanuarydZ, 2021 Ja R. Doss County Clerk and Election Officer 4:00p.m. The City Commission convened via Zoom meeting at 2:30 p.m. for the Live Salina Plan Update - Demographics and Economic Incentives. Mayor Hodges asked the Clerk for verification that notice had been sent for today's City Commission meeting. The Clerk replied yes. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. via Zoom meeting. Ro11 call was taken followed by a moment of silence. TI1ose present and comprising a quorum the Zoom meeting: Mayor Melissa Rose Hodges (presidin.g), Commissioners Trent W. Davis, M.D., Rod Franz, Michael L. Hoppock, and Karl Ryan. Also present via Zoom meeting: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Debbie Pack, Director of Finance and Administration. (3.1) The month of February 2021 as "Black History Month" in the of Salina. Sandra Beverly will read the proclamation. Mayor Hodges thanked Sandra Beverly, as well as grandchildren Scarlet and Gabriel for virtual participation and presentation. Ms. Beverly announced associated events. (3.2) The month of February 2021 as "Teen Dating Violence Awareness Month" in the city of Salina. Caitlyn Butts will read the proclamation. Mayor Hodges thanked Ms. Butts for the presentation and asked about any associated events. Michael Schrage, City Manager provided updated numbets related to Covid-19 cases in Saline County. Lauren Driscoll, Director of Community & Development Services, and Brad Anderson, Director of Arts and Humanities were facilitators for the Zoom meeting. Ms. Driscoll provided procedural overview for public citizens' participation. Michael Schrage, City Manager provided information on how executive sessions are conducted during the Zoom meeting. None PUBLIC SCHEDULED FOR None. (6.1) Approve the minutes of January 25, 2021. Pag� 1 (6.2) Resolution No. 21-7934 concluding the 2020 Evaluation of the City Manager's Performance. (6.3) Considel' Resolution No. 21-7931, authorizing and providing for the replacement of fow-(4) rooftop HY AC units in Great Plains Manufacturing Convention Hall and relocation of HV AC controls for these units to connect to the main floor control system at Tony's Pizza Event Center and authorizing the issuance of Temporaiy Notes and/ or General Obligation Bonds of the City to pay the costs thereof. (6.4) Consider Resolution No. 21-7932, authorizing and providing for the n·placement of portable basketball floors at Tony's Pizza Event Center and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Commissioner Davis requested that Item 6.2 be removed from the consent agenda. 21-0029 Moved by Commissioner Ryan, seconded by Commissioner Davis, to approve the consent agendaitems 6.1, 6.3, and item o.4 as presented. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Ryan, Hodges. Nay: (0). Motion carried. Mayor Hodges thanked Vice-Mayor Davis for removing item 6.2 from the consent agenda and requested permission from fellow Commissioners, to explain and read Resolution No. 21-7934. 21-0030 Moved by Commissioner Hoppock, seconded by Commissioner Davis, to accept Resolution No. 21-7934 as presented. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Ryan, Hodges.Nay: (0). Motion carried. Michael Schrage, City Manager thanked the Commission for the recognition. ADMINISTRATION (7.1) Second reading Ordinance No. 21-11050 amending the Future Land Use Map of the Salina, Kansas Comprehensive Plan to change the future land use designation of property located on Cortland Circle south of Schilling Road and west of South Ohio Street from future Employment to future Neighborhood Center and amending the text of the narrative describing the Neighborhood Center land use category of the Salina Comprehensive Plan to add C-5 and PC-5 to the list of Potential Zoning Districts under the Neighborhood Center land use cat<'gory. Mayor Hodges announced that Ordinance No. 21-11050 was passed on first reading on January, 25, 2021 and since that time no conunents had been received. Thne were no public conunents. 21-0031 Moved by Commissioner Hoppock, seconded by Commissioner Ryan, to adopt Ordinance No. 21-11050 on second reading. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Ryan, Hodges. Nay: (0). Motion carried. (7.2) Second reading Ordinance No. 21-11051 changing the zoning district classification from PC-6 (Planned Heavy Commercial) to PC-5 (Planned Service Conunercial) for the property that is legally described as Lots 1-5, Block 4 and Lots 1-4, Block 5 in the Page 2 Corrected Plat of Liberty Addition No. 2, an addition to the of Salina, Saline County, Kansas. Mayor Hodges announced that Ordinance No. 21-11051 was passed on first reading on January, 25, 2021 and since that time no comments had been received. There were no public comments. 21-0(}32 Moved by Commissioner Ryan, seconded by Commissioner Franz, to adopt Ordinance No. 21-11051 on second reading. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Hodges. Nay: (0). Motion carried. (7.3) Resolution No. 21-7935 authorizing the Mayor to enter in to a lease ,,vith the Saline County Fair Association. Michael Schrage, City Manager, explained the lease agreement and stated there would be no direct fiscal expense to the City. Schrage discussed the amendments to the lease under Recitals; item D.; (c) continued use of the Arena Staging Area as a dog park, at the discretion of the SCFA; and (d) removal of the SCFA's personal property from the Arena Facilities after the 2021 Fair. :Mr. Schrage further stated that (c) and (d) as depicted in Recitals; item D. is repeated in Section 4. SCFA Authorized Uses 4.1 (c) and (d). Commissioner Davis asked there was a minimum notification requirement the lease would need to be terminated prior to September 10, 2021. Mr. Schrage stated that the other entity, interested in development of the Kenwood Pool site and the Rodeo Arena area, stated they would be agreeable to start their project in phases that would allow for the Saline County Fair Board to utilize the Arena Facilities for the 2021 Fair. Commissioner Davis asked if there was a point of contact with the Saline County Fair Board [SCFB), for citizens to contact, if the lease were approved. Mr. Schrage stated he has had conversations with an SCFB representative and can share that information with the citizens that have reached out, as it pertains to reestablishment of a dog park, in the area within the proposed lease agreement. There were no public comm.ents. 21-0033 Moved Commissioner Hoppock seconded Commissioner Ryan, to adopt Resolution No. 21- 7935 with amendments as present by Michael Schrage, City Manager. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Ryan, Hodges. Nay: (0). Motion carried. None (9.1) Request for executive session (legal). I move the City Commission recess into executive session for_ minutes to discuss with legal counsel the subject of legal considerations relating to defense of the case of William Sheppard and Cornerstone Development Group, L.L.C. v. City of Salina and City of Salina Planning Commission 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. 75-4319(b)(2). The open meeting will resume via the same Zoom link and the City of'Salina YouTube channel at __ p.m. (9.1a) Possible action to follow. 21-0034 Moved by Commissioner Davis, seconded by Commissioner HoppoC'k, to recess into executivesession for 45 minutes to discuss with legal counsel the subject of legal considerations relating todefense of the case of William Sheppard and Cornerstone Development Group, L.L.C. v. City ofSalina and City of Salina Planning Commission based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship plU'suant to KS.A. 75-4319(b)(2). The open meeting will resun.e via the same Zoom link and the City of Salina YouTuhe cha1mel at 5:30 p.m. A roll call vote was taken. Aye: (5) Davis, Franz, Hoppock, Ryan, Hodges. Nay: (0). Motion carried. Also present in executive session was Michael Schrage, City Manager, G1·eg Bengtson, Jake Peterson, Lauren Driscoll, and Dean Andrew. The meeting reconvened at 5:30 p.m. No action was takenADJOURNMENT 21-0035 Moved by Commissioner Hoppock, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: {5). Nay: (0). Motion carried. The meetingadjourned at 5:31 p.m. [SEAL] ATTEST: �✓.f///JWnt:,),-J Cheryl ��s, Deputy City Clerk Page 4 ADOPTED AND APPROVED by the governing body of the City of Salina, Kansas, on February 1. 2021. (SEAL) t--\w¾f�'1cxMelissa Ro�� Hodges, Mayor ATTEST: lffffi/f11Je/2/J;1xxJ Cheryl Mednis, Dbputy City Clerk 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 o�; the governing body of the City of Salina, Kansas, held on the date stated therein, and that the official minutes ofj'I,such proceedings are on file in my office. ·, (SEAL) 600596.202 I 7\SALE RESOLUTION-SALINA 2021-A, 2021-1 A� h (l,{�0; .r; '�>120G7 (Signature Page to Excerpt of Minutes) RESOLUTION NO. 21-7941 RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2021-A, AND GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2021-1, 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 Project Description Resolution No. Authority Fund Deoosit* Ord. 02-10071; North 9th Street Bridge Res No. 19-7677 K.S.A. 12-685 et seq.$ 1,905,000.00 Article 12, §5 of the Constitution of the State of Smokv Hill River Renewal Ord. 17-10885 Kansas 1,500,000.00 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,600,000.00 Great Plains Manufacturing Center Convention Hall HVAC Tony's Pizza Event Center Res. 21-7931 K.S.A. 12-1736 et seq.160.426.00 Total: $5,165,426.00 *Excludes costs of issuance. WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds to pay a portion of the costs of the Note Improvements; and WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its obligations incurred in constructing the Note Improvements prior to the completion thereof and the issuance of the Issuer's general obligation bonds, and it is desirable and in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer; and WHEREAS, the Issuer has previously authorized certain internal improvements described as follows (collectively, the "Bond Improvements," and together with the Note Improvements, the "Improvements"): Estimated Ordinance/ Improvement Project Description Resolution No. Authority Fund Deposit* Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. 12-6a01 et seq.$ 570,316.80 9 South Res. 19-7749 K.S.A. 12-6a01 et seq.884,594.63 Police Training Facility Res. 19-7743 K.S.A. 12-1736 et seq.6,020,721.96 Stone Lake 2 Res. 19-7750 K.S.A. 12-6a01 et seq.473,150.74 Tony's Pizza Event Center Basketball Floor Reolacement Res. 21-7932 K.S.A. 12-1736 et seq ..109.994.00 Total: $8,058,778.13 *Excludes costs of issuance. WHEREAS, the Issuer desires to issue its general obligation bonds in order to permanently finance a portion of the costs of the 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 2020-1 April 29, 2020 May 1, 2021 $7,050,000 ; and WHEREAS, the Issuer has selected the firm of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri ("Municipal Advisor"), as municipal 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 Municipal 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 Municipal 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 Internal Improvement Bonds, Series 2021-A (the "Bonds"), and General Obligation Temporary Notes, Series 2021-1 (the "Notes," and together with the Bonds, the "Obligations") described in the notice of sale relating to the Obligations, which is hereby approved in substantially the form presented this date (the "Notice of Sale"). Section 2. The Mayor, Clerk, and Director of Finance, in conjunction with the Municipal Advisor and Bond Counsel, are hereby authorized to cause to be prepared, if necessary, a Preliminary Official Statement relating to the Obligations (the "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 Municipal 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 the 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 15c2-12 of the Securities and Exchange Commission (the "Rule"), the Mayor, Clerk, City Manager, Director of Finance, or other appropriate officers of the Issuer are hereby authorized, if necessary: (a) to approve the form of the 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 judgmentdeem necessary to enable the Purchaser(s) to comply with the requirement of the Rule. Section 5. The Issuer agrees to provide to the Purchaser(s) within seven business days of the date of the 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, Director of Finance and the other officers and representatives of the Issuer, the Municipal 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. The transactions described in this Resolution may be conducted, and documents related to the Obligations may be sent, received, executed, and stored, by electronic means or transmissions. Copies, telecopies, electronic files and other reproductions of original executed documents ( or documents executed ADOPTED by the governing body on March 15, 2021. (SEAL) ATTEST: 600596.20217\SALE RESOLUTION-SALINA 2021-A. 2021-1 Mayor ,3.. (Signature Page to Sale Resolution) !I Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to KS.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, KS.A. 10-620 et seq., K.S.A. 12-6a01et seq., K.S.A. 12-1736 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all asamended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") forthe purpose of paying a portion of the cost of certain public improvement projects and to pay costsassociated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as toboth principal and interest in part from special assessments levied upon the property benefitted by theconstruction of certain public improvements, and if not so paid, from ad valorem taxes which may be leviedwithout limitation as to rate or amount upon all the taxable tangible property, real and personal, within theterritorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from advalorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangibleproperty, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources ofthe Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes asthe 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. 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 andfrom 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 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 1 %; ( 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 PRELIMINARY OFFICIAL STATEMENT DATED APRIL 6, 2021 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, (3) the Bonds are designated as “qualified tax-exempt obligations” within the meaning of Code Section 265(b)(3); and (4) the Notes have not been designated as “qualified tax-exempt obligations” within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. New Issues Moody’s Ratings: Bonds- “Aa3” Book-Entry Only Notes- “MIG1” CITY OF SALINA, KANSAS $5,230,000* $8,145,000* GENERAL OBLIGATION TEMPORARY NOTES GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-1 SERIES 2021-A Dated: Date of Delivery Due: As Shown Herein The General Obligation Temporary Notes, Series 2021-1 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 2021-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, 2022 (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, 2021. BIDS FOR THE PURCHASE OF THE NOTES AND BONDS WILL BE RECEIVED PURSUANT TO THE NOTICE OF SALE: The Series 2021-1 Notes: On or before 12:00 p.m., Central Time The Series 2021-A Bonds: On or before 1:00 p.m., Central Time On April 12, 2021 *Preliminary; subject to change. 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. This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Preliminary Official Statement is intended solely for solicitation of initial bids to purchase the Bonds. MATURITY SCHEDULES $5,230,000(1) GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 Base CUSIP(2) Maturity Amount Rate Yield 794744 05-01-22 $5,230,000* The Notes are not be subject to redemption prior to maturity. $8,145,000(1) GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A SERIAL BONDS Base CUSIP(2) Maturity Amount Rate Yield 794744 10-01-22 $325,000 10-01-23 390,000 10-01-24 400,000 10-01-25 410,000 10-01-26 420,000 10-01-27 420,000 10-01-28 420,000 10-01-29(3) 425,000 10-01-30(3) 435,000 10-01-31(3) 440,000 10-01-32(3) 445,000 10-01-33(3) 455,000 10-01-34(3) 465,000 10-01-35(3) 470,000 10-01-36(3) 480,000 10-01-37(3) 335,000 10-01-38(3) 340,000 10-01-39(3) 350,000 10-01-40(3) 355,000 10-01-41(3) 365,000 (1) Preliminary; subject to change. (2)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. (3) At the option of the City, Bonds maturing on October 1, 2029 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2028, 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. THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL (EXCEPT FOR PERMITTED OMISSIONS) BY THE ISSUER FOR PURPOSES OF COMPLYING WITH RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. ______________________________________________________________________________________________ CITY OF SALINA, KANSAS City/County Building - Room 206 300 West Ash P. O. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Melissa Rose Hodges, Mayor Trent W. Davis, M.D., Vice Mayor Mike Hoppock, Commissioner Rod Franz, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Director of Finance Cheryl Mermis, Deputy 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 ................................................................................................................................. 17 TAX MATTERS ..................................................................................................................................... 17 RATINGS.............................................................................................................................................. 19 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-14 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2019 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2020 1 OFFICIAL STATEMENT CITY OF SALINA, KANSAS $5,230,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 $8,145,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A INTRODUCTORY STATEMENT General 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 $5,230,000* General Obligation Temporary Notes, Series 2021-1 (the “Notes”), and its $8,145,000* General Obligation Internal Improvement Bonds, Series 2021-A (the “Bonds”, and together with the Notes, the “Securities”). The Notes are being issued to provide funds to finance certain public improvements within the City. The Bonds are being issued to provide funds to permanently 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 Securities 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 provided by the Issuer 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. Stifel, Nicolaus & Company, the Municipal Advisor, has assisted the Issuer with the preparation of this Official Statement, but has not independently verified the factual and financial information contained herein. 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, or the Securities may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. *Preliminary; subject to change 2 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution, particularly Article 12 § 5 thereof, 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. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 12- 2104, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the “Note Resolution”). Security The Notes shall be general obligations of the City, payable as to both principal and interest from 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 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 without option of prior redemption and payment. 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. The Notes shall not be subject to optional redemption and payment prior to their Stated Maturity. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the “Note Registrar” and “Note Paying Agent”) has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or 3 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, if any, 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. 4 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-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through 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 Notes being issued to any Owner other than 5 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)(1) 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. 12-6a01 et seq., and K.S.A. 12-1736 et seq., 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 in part from special assessments levied upon the property benefited by the construction of the Improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable] from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. 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 6 Bonds as the same become due. Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes and/or assessments shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes 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 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, 2029 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2028, 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. [(a) [____] Term Bonds. ]The [____] Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such [____] Term Bonds: Principal Amount Year $ * _______________ *Final Maturity [(b) 2041 Term Bonds. ]The 2041 Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2041 Term Bonds: 7 Principal Amount Year $ 2041* _______________ *Final Maturity]] 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 8 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 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 9 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. 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 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 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 10 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)(1) 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. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with DTC. 2. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a 11 Standard & Poor’s rating of “AA+”. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to the Paying Agent’s DTC account. 12 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (collectively, the “Note Projects”)and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Ordinance/ Resolution Authority Principal Amount Great Plains Manufacturing Center Convention Hall HVAC Tony’s Pizza Event Center Res. 21-7931 K.S.A. 12-1736 162,431.52 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,620,001.91 Smoky Hill River Renewal Ord. 17-10885 Article 12, §5 of the Constitution of the State of Kansas 1,518,751.79 North 9th Street Bridge Ord. 02-10071; Res. No. 19-7677 K.S.A. 12-685 et seq. 1,928,814.78 Total: $5,230,000.00 The Bond Projects Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (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 Ordinance/ Resolution Authority Principal Amount Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. 12-6a01 et seq. $576,418.69 Police Training Facility Res. 19-7743 K.S.A. 12-1736 et seq. 6,085,138.41 Stone Lake 2 Res. 19-7750 K.S.A. 12-6a01 et seq. 478,213.04 9 South Res. 19-7749 K.S.A. 12-6a01 et seq. 894,059.02 Tony’s Pizza Event Center Basketball Floor Replacement Res. 21-7932 K.S.A. 12-1736 et seq. 111,170.84 Total: $8,145,000.00 13 SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Notes Bonds Sources of Funds: Principal Amount Net Original Issue Premium Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Underwriter’s Discount Cost of Issuance Total Application of Funds 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 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. 14 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 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 $1.502 billion in calendar year 2019 and KP&F had an UAAL of approximately $949 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under “TAX MATTERS” assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. 15 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. 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. 16 COVID-19 On March 11, 2020, the World Health Organization proclaimed the Coronavirus (COVID-19) to be a pandemic. In an effort to lessen the risk of transmission of COVID-19, the United States government, state and local governments and private industries have taken measures to limit social interactions in an effort to limit the spread of COVID-19, affecting business activities and impacting global, state and local commerce and financial markets. State and local governmental authorities continue efforts to contain and limit the spread of COVID-19. As of the date hereof, the Issuer has not experienced material adverse changes relative to its adopted budget with regard to expenditures or receipt of revenues. However, future revenue collections, including property tax collections that are essential to repayment of the Bonds, may deviate from historical or anticipated levels. The emergence of COVID-19 and the spread thereof continues to be an emerging and evolving issue. The Issuer is not able to predict and makes no representations as to the long term economic impact of the COVID-19 pandemic on the Issuer. 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. 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. 17 Bank Qualification – The Bonds. The Bonds are “qualified tax-exempt obligations” within the meaning of Code § 265(b)(3). Bank Qualification – The Notes. The Notes have not been designated as “qualified tax-exempt obligations” for purposes of Code §265(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel’s opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences [Original Issue Discount. For federal income tax purposes, original issue discount (“OID”) is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is 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 18 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 “MIG1” 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, but has not independently verified the factual and financial information contained herein. The Municipal Advisor has also assisted the City 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 original issue premium of $[_______], less an underwriting discount of $[_______]. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the “Underwriters”. 19 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, 2020. In the Bond Resolution and the 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: On September 28, 2020, the Issuer entered into a Loan Agreement with the Kansas Department of Health and Environment to finance improvements to the City’s water distribution system. The Ordinance authorizing the Issuer’s execution of the Loan Agreement was published on October 1, 2020. On October 16, 2020, the Issuer filed an event notice related to such Loan Agreement, including a notice of failure to timely file. 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 A-1 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2020 Estimated Actual Valuation (1) $ 3,326,521,997 2020 Assessed Valuation $ 510,951,650 Outstanding General Obligation Bonds (2) $ 73,475,000 Population (2019 U.S. Census Bureau Estimate) 46,550 General Obligation Debt Per Capita $ 1,578 Ratio of General Obligation Debt to Estimated Actual Valuation 2.21% Ratio of General Obligation Debt to Estimated Assessed Valuation 14.38% Outstanding Temporary Notes (3) $ 12,280,000 Outstanding State Loans (4) $ 47,041,138 Outstanding Lease Purchase Obligations $ 583,725 Outstanding Utility System Revenue Bonds $ 9,615,000 Outstanding Special Obligation Revenue Bonds $ 22,400,000 Overlapping General Obligation Debt (5) $ 116,258,272 Direct and Overlapping General Obligation Debt (6) $ 249,054,410 Direct and Overlapping General Obligation Debt Per Capita $ 5,350 Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 7.49% Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation 48.74% _________________ (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 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-2 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 2019 U.S. Census Bureau estimate of 46,550. The City is the county seat for Saline County which had an estimated 2019 U.S. Census Bureau population of 54,224. 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: Name Title Term Expires Melissa Rose Hodges Mayor 2022 Trent W. Davis, M.D. Vice Mayor 2024 Rod Franz Commissioner 2022 Michael L. Hoppock Commissioner 2022 Karl F. Ryan Commissioner 2024 Population 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. U.S. Census Year Bureau Population 2019 46,550 2018 46,716 2017 46,994 2016 47,336 2015 47,813 A-3 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 7,000. 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 I-70 and I-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-4 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 December 31, 2019, KPERS serves approximately 325,000 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-5 (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 8.61% of the employee’s gross salary for calendar year 2020. The Issuer’s contribution is projected to change to 8.87% of gross compensation for calendar year 2021. 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, 2019 (the “2019 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 2019. The amount of the UAAL in 2019 changed from the previous year’s amount due to the factors discussed in the 2019 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 2019 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 2019 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 2019 Valuation Report sets the employer contribution rate for the period beginning January 1, 2022, for the KPERS Local Group, and KPERS’ actuaries identified that an employer contribution rate of 8.90% 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 2019 Valuation Report. The statutory contribution rate of employers currently equals the 2019 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 2019 Valuation Report, KP&F carried an UAAL of approximately $949 million at the end of 2019. 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, 2020, the Issuer contributes 21.93% of employees’ gross compensation. Beginning January 1, 2021, the Issuer’s contribution is projected to change to 22.80% of gross compensation for calendar year 2021. 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-6 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 2020 according to Kansas Department of Revenue. 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 2020 to be 25,446 persons. The estimated median household income for the City in 2019 was $50,490, and owner-occupied housing rates in the City were 64.4%. 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-7 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Schwan’s Company is building a new 400,000 square foot expansion at the existing manufacturing facility. The project is expected to bring 225 new jobs by 2023. 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 I-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2020, the Salina Air Traffic Control Tower logged over 60,000 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 2.295 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2020 and 118,268 as of January 2021. The Airport and Airport Industrial Center is home for over 125 businesses and organizations. 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, Salina Community Economic Development Organization, 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 2019 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 41 percent of the total economic activity in Saline County during 2017. A-8 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. Estimated Name Product/Business Employment Salina Regional Health Center Healthcare 1,875 Unified School District No. 305 School System 1,500 Schwan’s Global Supply Chain, Inc. Manufacturing 1,200 Great Plains Manufacturing Agricultural & Landscaping Equipment 1,200 Exide Technologies Battery Manufacturer 700 City of Salina City Government 425 Salina Vortex Manufacturing 385 Saline County Local Government 325 Walmart Discount Retail 250 REV Group Manufacturing 175 Source: Salina Chamber of Commerce Income The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Saline State of Year County Kansas 2019 N/A $53,453 2018 49,983 51,474 2017 47,831 48,869 2016 46,084 47,510 2015 44,542 47,386 Source: Kansas Statistical Abstract Labor Force 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 2020 (Dec) 25,446 24,563 883 3.5% 2019 25,643 24,847 796 3.1 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 A-9 State of Kansas: Total Unemployment Year Labor Force Employed Unemployed Rate 2020 (Dec) 1,507,057 1,449,369 57,688 3.8% 2019 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 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City’s outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturity Outstanding 07-15-11 2011-A Internal Improvements $6,565,000 10-01-21 $375,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 815,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 2,660,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 4,305,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 5,160,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 5,505,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 11,785,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 8,350,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 1,865,000 04-24-19 2019-A Improvements 11,090,000 10-01-39 10,850,000 04-29-20 2020-A Improvements 5,210,000 10-01-35 5,210,000 11-30-20 2020-B Refunding 8,450,000 10-01-36 8,450,000 04-29-21 2021-A Improvements 8,145,000* 10-01-41 8,145,000* Total $73,475,000 *Preliminary; subject to change 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-10 Temporary Notes: Series Date Issued Final Maturity Date Original Note Amount Amount Outstanding 2020-1 04-29-20 05-01-21 $7,050,000 $7,050,000(1) 2021-1 04-29-21 05-01-22 5,230,000(2) 5,230,000(2) $12,280,000 (1) To be redeemed with proceeds from the Bonds and other available funds. (2)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 Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $9,615,000 Lease Obligations (as of December 31, 2020): 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 Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $18,080,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $22,400,000 Item Year Issued Original Amount Final Year Amount Outstanding HVAC System 2012 $1,100,000 2027 $583,725 A-11 State Loans The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment (“KDHE”) revolving loan fund program. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. Regardless of the intended source of repayment, the loans are ultimately secured by the City’s ability to levy unlimited ad valorem property taxes. Project Number Purpose Year Originated Final Payment Date Original Amount Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $ 5,857,668 KDHE 2917 Water 2019 02-01-40 32,000,000 30,727,444 KDHE 2957 Water 2019 02-01-40 4,250,000 4,080,989 KDHE 2998 Water 2019 02-01-40 4,250,000 4,250,000 KDHE 2050 Sewer 2020 03-01-35 2,250,000 2,125,037 $47,041,138 *Construction on this project is in progress. The outstanding principal amounts are expected to increase as the Issuer draws additional proceeds to fund construction. 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. *As of February 2021 Amount Estimated Share of the City Jurisdiction Outstanding* Amount Percentage Salina Airport Authority $ 20,175,000 $ 18,750,000 100.00% Saline County 216,812 627,786 73.88 Unified School District No. 305 631,812 104,270,000 93.07 $116,258,272 A-12 Annual Debt Payments 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. *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 December 31 Valuation Valuation Population Capita 2020 $65,330,000 12.79% 1.96% 46,550 $1,403.44 2019 58,170,000 11.53 1.78 46,550 $1,261.22 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 Existing Bonds Series 2021-A Bonds Year Principal Interest Principal Interest Total 2021 $5,545,000 $997,026 2022 5,705,000 1,803,571 2023 5,575,000 1,589,201 2024 5,390,000 1,379,556 2025 5,085,000 1,233,431 2026 4,380,000 1,090,661 2027 4,155,000 963,778 2028 3,865,000 846,594 2029 3,595,000 735,686 2030 3,135,000 636,324 2031 3,055,000 547,121 2032 2,975,000 458,676 2033 2,960,000 373,662 2034 2,780,000 288,206 2035 2,565,000 208,363 2036 1,860,000 136,075 2037 1,240,000 83,175 2038 725,000 43,950 2039 740,000 22,200 $65,330,000 $13,437,258 A-13 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 $7,000,000 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. 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 the contamination. A remedial investigation and feasibility study (RI/FS) was undertaken to determine the extent and severity of the contamination and to determine the best method of remediation. Based on the RI/FS, the Kansas Department of Health and Environment (KDHE) issued a Corrective Action Decision (CAD) on July 29, 2019. The Salina Public Entities and the U.S. Department of Justice (DOJ) reached a settlement of the litigation ultimately documented in the form of a Consent Decree filed in U.S. District Court on November 23, 2020. Pursuant to the Consent Decree, the Salina Public Entities assumed responsibility for the Response Action in the CAD in exchange for a $65.9 million lump sum settlement payment by the United States to the Salina Public Entities. The settlement payment was received by the City on behalf of the Salina Public Entities in February 2021. The Salina Public Entities currently expect that the settlement payment will be sufficient to complete the Response Action required by the CAD. 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. A-14 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 September 20 if the City must conduct a public hearing tolevy taxes in excess of its revenue neutral rate 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. In 2021, the Kansas Legislature passed legislation (the “Revenue Neutral Tax Act”) that repeals the “tax lid” (formerly K.S.A. 79-2925c) and provides that, beginning January 1, 2021, a taxing subdivision (which includes any political subdivision of the State that levies an ad valorem property tax, including the City) is not authorized to levy a property tax rate in excess of its revenue neutral rate without first providing notice, holding a public hearing, and authorizing such property tax rate by majority vote of its governing body. The revenue neutral rate means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year using the current tax year’s total assessed valuation. The Revenue Neutral Tax Act provides that by June 15 of every year, each county clerk shall calculate the revenue neutral rate for each taxing subdivision in their respective county. If a taxing subdivision desires to levy a tax rate in excess of its revenue neutral rate, it must first publish notice of a public hearing and notify the county clerk of the taxing subdivision’s intent to exceed the revenue neutral rate. The county clerk is required to provide notice of the public hearing to each taxpayer with property in the taxing subdivision, along with following information concerning the taxing subdivision: (1) the revenue neutral rate, (2) the proposed property tax revenue needed to fund the proposed budget, (3) the proposed tax rate based on the proposed budget, (4) the tax rate and property tax of each taxing subdivision on the taxpayer’s property from the previous year’s tax statement, (5) the appraised value and assessed value of the taxpayer’s property, (6) estimates of the tax for the current tax year on the taxpayer’s property based on the revenue neutral rate of each taxing subdivision and any proposed tax rates that exceed the revenue neutral rates, (7) the difference between the estimates of tax based on the proposed tax rate and the revenue neutral rate. The public hearing regarding exceeding the revenue neutral rate is to he held between August 10 and September 10, and can be held in conjunction with the taxing subdivision’s budget hearing. If multiple taxing subdivisions within the county are required to hold a public hearing, the notices to the taxpayer can be combined into a single notice. After the public hearing, the taxing subdivision can approve exceeding the revenue neutral rate by a majority vote of its governing body, and the amount of tax to be levied must be certified to the county clerk by September 20. The taxing subdivision’s adopted budget shall not result in a tax rate in excess of its proposed rate stated in the notice provided to the taxpayers. If a taxing subdivision fails to comply with the requirements of the Revenue Neutral Tax Act, it shall refund to the taxpayers any property taxes over collected based on the amount of the levy that was in excess of the revenue neutral rate. The City cannot predict the impact of the Revenue Neutral Tax Act 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. A-15 Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. 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, 2019 is attached hereto as APPENDIX C. The unaudited financial statements of the City for the Fiscal Year ended December 31, 2020 are attached hereto as APPENDIX D. There can be no guarantee that the information included in such unaudited financial statements will not materially change when subject to audit. 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: 2016 2017 2018 2019 Property Taxes $9,217,596 $10,115,784 $9,743,497 $10,801,226 Sales Tax 12,780,891 12,906,032 32,900 13,418,742 Other Taxes 6,347,717 5,215,264 5,444,880 5,086,492 Intergovernmental 1,301,106 1,133,310 1,144,717 1,351,967 Charges for Services 6,472,698 6,153,450 6,366,094 5,816,485 Investment Revenue 102,045 3,336 45,477 613,249 Miscellaneous 507,330 1,709,491 452,916 609,676 Total Revenues $36,729,383 $37,236,667 $36,490,207 $37,778,837 Expenditures: General Government $5,422,010 $5,423,241 $5,648,579 $4,581,505 Public Safety 21,664,398 21,628,730 22,952,925 23,692,445 Public Works 5,066,426 5,328,315 5,350,056 5,473,414 Public Health and Sanitation 703,606 749,656 793,780 816,636 Culture and Recreation 4,147,736 4,424,221 4,494,713 4,379,441 Planning and Development 980,950 752,825 766,471 836,690 Capital Outlay 1,098,587 896,026 860,115 985,861 A-16 Total Expenditures $39,083,713 $39,203,014 $40,866,639 $40,765,992 Revenues Over (Under) $(2,354,330) $(1,966,347) $(4,376,432) $(2,987,155) Other Sources (Uses) 2,546,500 3,816,500 4,236,500 5,551,752 Net Change in Fund Balance 192,170 1,850,153 $(139,932) 2,564,597 Fund Balance January 1 $4,840,186 $5,032,356 $6,882,509 $6,742,577 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $5,032,356 $6,882,509 $6,742,577 $9,307,174 Assessed Valuation According to the Saline County Clerk’s Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Property* Utilities Vehicle Valuation 2020 $423,573,121 $9,353,057 $23,436,340 $54,589,132 $510,951,650 2019 421,108,311 11,245,813 22,113,195 54,687,311 509,154,630 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 *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. Residential Real Estate Estimated Year Equalization Ratio Actual Value 2020 N/A $3,326,521,997 2019 11.44% 3,294,115,685 2018 11.17 3,150,409,123 2017 11.04 3,097,885,103 2016 11.36 3,046,949,034 2015 11.28 2,968,008,193 Special Assessments 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 A-17 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. 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 % 2020* 30.650 $15,311,674 $8,762,996 56.9% $8,552,180 56.9% 2019 29.720 14,949,484 14,538,092 97.2 14,732,831 98.6 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 *Represents collections through December 31, 2020. A-18 Tax Levies Nov 2016 Levy Nov 2017 Levy Nov 2018 Levy Nov 2019 Levy Nov 2020 Levy City of Salina 27.603 26.129 28.394 29.720 30.650 Salina Library 5.893 5.989 6.014 5.913 5.880 State Education & Other 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 55.743 56.501 57.522 55.508 55.454 Airport Authority 4.396 4.225 4.998 4.447 5.037 Central Kansas Extension District 1.510 1.475 1.476 1.198 1.206 Saline County 37.508 37.321 38.437 41.097 40.606 Total 134.153 133.140 138.341 139.383 140.333 Largest Taxpayers According to the Saline County Clerk’s Office, the following table lists the largest taxpayers in the City, their November 2020 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 $19,659,775 3.85% SFC Global Supply Chain Inc Manufacturing 5,927,488 1.16 Kansas Gas Service Utility 5,415,618 1.06 RAF Salina LLC Retail Shopping Center 4,680,507 0.92 S&B Motels Inc Motel 3,010,427 0.59 Central Mall Realty Holding LLC Retail Shopping Center 2.851,701 0.56 Union Pacific Railroad Co. Railroad 2,565,902 0.50 Menard Inc. Home Improvement Store 2,427,090 0.48 Individual Residential 2,367,201 0.46 Sam’s Real Estate Business Trust/Walmart Discount Store 2,195,047 0.43 Total $51,100,756 10.00% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Year Value 2021* $830,841 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 *Through January 2021 Sales Tax [note: revise for new County Sales Tax] A-19 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. Except as set forth below, 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 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”). The 2016 sales tax replaced an existing sales tax of .40%. In November of 2020, the voters of Saline County approved an additional 0.5% countywide local option sales tax, the revenues derived from which are dedicated to paying the costs of a new Criminal Justice Complex, such sales tax shall terminate when all costs associated with the Criminal Justice Complex project have been paid, including the retirement of any bonds issued therefor (the “2020 Sales Tax”). No portion of the revenues derived from the 2020 Sales Tax will be distributed to the City. The total sales tax for goods and services in the City is 9.25%, which consists of 6.5% imposed by the State, 1.5% 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. City’s Portion of Citywide 1% Countywide Local Option Local Option Year Sales & Use Tax Receipts Sales & Use Tax Receipts 2021(1) $2,752,128 $1,415,232 2020 15,160,656 7,756,909 2019 14,922,405 7,608,604 2018 14,632,584 7,415,804 2017 14,404,702 7,368,869 2016 10,458,630 7,312,618 2015 10,372,573 7,376,708 (1) As of February 2021 (2) Collections 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 A-20 used to establish property tax rates. Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer’s challenge to the appraiser’s valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from 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 11.5% Commercial and Industrial- Real Property 25.0 Agricultural Land (1) 30.0 Agricultural Improvements 25.0 Vacant Lots 12.0 Not-for-Profit (2) 12.0 All Other 30.0 Personal Property: (3) Mobile Homes 11.5% Mineral Leaseholds (large) 30.0 Mineral Leaseholds (small) 25.0 Commercial & Industrial Machinery & Equipment 25.0 All Other 30.0 Utilities: Railroads federally mandated rate All Other Public Utilities 33.0% Motor Vehicles: 20.0% Property Exempt: 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), A-21 (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. 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 2019 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.44%, and commercial and industrial property was 24.25%. APPENDIX B Form of Continuing Disclosure Undertaking Gilmore & Bell, P.C. 03/09/2021 CONTINUING DISCLOSURE UNDERTAKING $8,145,000* CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A $5,230,000* CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-I DATED APRIL 29, 2021 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2021 (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, 2021, 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)(1) 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. 2 “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 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 Issuer’s Fiscal Year, commencing with the Fiscal Year ending December 31, 2020, 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. 3 (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, 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 4 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 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 5 change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this 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.] 600596.20217\CDU-SALINA 2021-A, 2021-1 S-1 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 Deputy City Clerk 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 APPENDIX C December 31, 2019 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, 2019, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. COMPREHENSIVE ANNUAL FINANCIAL REPORT 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 Prepared by Department of Finance and Administration of City of Salina, Kansas CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal i - iv Organizational Chart v List of Principal Officials vi FINANCIAL SECTION Independent Auditor’s Report 1 - 3 Management's Discussion and Analysis 4 - 15 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements Balance Sheet - Governmental Funds 18 Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities 19 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 20 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund 22 Tourism and Convention Fund 23 Special Gas Fund 24 Sales Tax Capital Fund 25 Statement of Net Position - Proprietary Funds 26 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 27 Statement of Cash Flows - Proprietary Funds 28 - 29 Statement of Assets and Liabilities - Agency Funds 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Notes to the Basic Financial Statements 31 - 70 Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 71 Other Postemployment Benefits - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 72 KPERS Pension Plan Schedule of City’s Proportionate Share of the Net Pension Liability 73 Schedule of City Contributions 73 Combining Statements and Individual Fund Schedules Combining Statements - Nonmajor Funds Fund Descriptions 74 - 75 Combining Balance Sheet - Nonmajor Governmental Funds 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 77 Combining Balance Sheet - Nonmajor Special Revenue Funds 78 - 79 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds 80 - 81 Combining Balance Sheet - Nonmajor Permanent Funds 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Permanent Funds 83 Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund 84 Business Improvement District Fund 85 Neighborhood Park Fund 86 Special Parks and Recreation Fund 87 Special Alcohol Fund 88 Sales Tax Economic Development Fund 89 Arts & Humanities Fund 90 Debt Service Fund 91 Solid Waste Disposal Fund 92 Water and Sewer Fund 93 Sanitation Fund 94 Golf Course Fund 95 Workers’ Compensation Reserve Fund 96 Health Insurance Fund 97 Central Garage Fund 98 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Internal Service Fund Descriptions 99 Combining Statement of Net Position - Internal Service Funds 100 Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds 101 Combining Statement of Cash Flows - Internal Service Funds 102 - 103 Fiduciary Fund Descriptions - Agency Funds 104 Combining Balance Sheet - Agency Funds 105 Combining Statement of Changes in Assets and Liabilities - Agency Funds 106 Schedule STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years 1 107 Changes in Net Position - Last Ten Fiscal Years 2 108 Fund Balances, Governmental Fund - Last Ten Fiscal Years 3 109 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 4 110 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years 5 111 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 6 112 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 7 113 Principal Property Taxpayers 8 114 Property Tax Levies and Distributions 9 115 Direct Sales Rate by Taxing Entity 10 116 Water Sales by Class of Customer 11 117 Ratio of Outstanding Debt by Type 12 118 Ratio of Net General Bonded Debt Outstanding 13 119 Direct and Overlapping Governmental Activities Debt 14 120 Legal Debt Margin 15 121 Pledged Revenue Coverage 16 122 Demographic and Economic Statistics 17 123 Principal Employers 18 124 INTRODUCTORY SECTION DEPARTMENT OF FINANCE TELEPHONE (785) 309-5735 AND ADMINISTRATION FAX (785) 309-5738 300 West Ash, P.O. Box 736 TDD (785) 309-5747 Salina, Kansas 67402-0736 Website: www.salina-ks.gov June 30, 2020 To the Citizens of the City of Salina, Kansas: The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2019, is hereby submitted. The City’s Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City’s accounting system and budgetary controls, and a brief discussion of the City’s economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor’s report, Management’s discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management’s Discussion and Analysis (MD&A) which immediately follows the independent auditor’s report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City’s comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2019 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to ensure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and i transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920.The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The population of the City reported by the 2010 decennial census was 47,707. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown core of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, ElDorado National, and Schwan’s Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to “trade pull factor.” According to the Kansas Department of Revenue’s Annual City Trade Pull Factor report, Salina had a pull of factor of 1.47 in 2019. The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2019. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2018 as compared to 2016. In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2019 the Alley Entertainment Center opened for business and the majority of the City’s Downtown Streetscape project was completed. The new downtown hotel began construction in 2019 and is anticipated to open in July 2020. Other major projects that were on going included gutter and paving on North 9th Street, South Well Field improvements, continued improvements to the water distribution system and preliminary design on the Smoky Hill River Renewal and construction of the Police Training Center project. ii The City continues to address fiduciary pressures generated by a recessionary economy and the more recent financial impacts of the Covid-19 pandemic. General adjustments to the pay plan for cost of living changes at a rate of 2.0% were implemented in 2019. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of “routine” capital—including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: *2019 2020 2021 2022 2023 Sales tax $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 4,395,000 $ 4,250,000 Water & wastewater fund ---- 2,000,000 2,000,000 2,000,000 General obligation bonds 5,225,000 19,700,000 ---- Revenue Bonds/Loans 11,255,000 6,000,000 28,000,000 -- Other sources 785,800 -------- $ 21,645,800 $ 30,085,000 $34,390,000 $6,395,000 $ 6,250,000 Major projects budgeted in 2019 included a Landfill Cell Construction and the implementation of automated Sanitation collection. The Landfill project was completed; however, the Sanitation project has been delayed until late 2020 or early 2021. The significant increases in 2020 and 2021 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project and Wastewater Treatment Plant respectively. Due to uncertain Sales Tax recovery post Covid-19, the River Renewal project has been delayed. No major projects have been planned for 2022 and 2023 until financial resources for those years can be further evaluated. *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning iii 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Ensure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the GordonCPA auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. Sincerely, Michael D. Schrage City Manager iv &LW\RI6DOLQD CITIZENS CITY COMMISSION Mike Hoppock, Mayor Melissa Hodges Trent Davis Karl Ryan Rod Franz City Manager Michael Schrage Deputy City Manager Jacob Wood Development Services Lauren Driscoll Risk Management Legal Services Clark Mize & Linville Chartered* Greg Bengtson Computer Technology vacant Police Brad Nelson Fire Kevin Royse Public Works Jim Kowach Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Fire Administration Fire Suppression Fire Prevention EMS Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Administration Patrol Division Support Division Investigative Division Finance/Administration Debbie Pack City Clerk Water Customer Accounting Finance Smoky Hill Museum Arts & Humanities Brad Anderson Human Resources Natalie Fischer P/OrgCharts/Organizational Chart-Public-2020 Parks & Recreation Chris Cotten Utilities Martha Tasker Municipal Court Building Services Neighborhood Services Planning & Zoning Community Relations Parks Division Recreation Division Golf Course Facility Maintenance Animal Services Bicentennial Center Continuous Process Improvement Scott Gardner * Contract Position v vi City of Salina, Kansas List of Principal Officials City Commission Mike Hoppock, Mayor Melissa Rose Hodges, Vice Mayor Trent Davis, Commissioner Karl Ryan, Commissioner Rod Franz, Commissioner City Executive Staff Michael Schrage, City Manager Jacob Wood, Deputy City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotten, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities Scott Gardner, Continuous Process Improvement ),1$1&,$/ SECTION 1 INDEPENDENT AUDITOR’S REPORT Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 4% and 1%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $46,899,592 as of December 31, 2019 and total revenues of $2,432,958 for the year then ended, and the Housing Authority of the City of Salina, which statements reflect total assets and deferred outflows of resources of $7,393,221 as of June 30, 2019 and total revenues of $2,620,347 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina, is based solely on the reports of the other auditors. 2 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2019, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2018, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2019, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. The financial statements of the City of Salina, Kansas, as of December 31, 2018, were audited by other auditors whose report dated September 29, 2019, expressed an unmodified opinion on those statements. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15, the other postemployment benefit schedules on page 71 and 72, the schedule of the City’s proportionate share of the net pension liability on page 73, and the schedule of City contributions on page 73 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 3 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Gordon CPA LLC Certified Public Accountant Lawrence, Kansas June 30, 2020 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 This section of the report contains an overview and analysis of the City of Salina’s financial statements for the fiscal year ended December 31, 2019. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City’s financial condition. Financial Highlights On an accrual basis, the City’s government-wide net position increased $8.1 million from current operations with net position increases of $4.9 million and $3.2 million in governmental activities and business-type activities, respectively. At the close of 2019, the City’s governmental funds reported combined ending fund balances of $15.8 million, a decrease of $3.3 million from the prior year. This primarily resulted capital project expenditures in the Capital Projects Fund. The General Fund balance increased $2.6 million over the prior year. At the close of 2019, the City’s enterprise funds reported a combined ending Net Position of $93.6 million, an increase of $3.2 million over prior year. Positive performance was shared by the Water and Sewer Fund, the Sanitation Fund, and the Golf Fund, with the Water and Sewer Fund providing the bulk of the change ($2.7 million). The Solid Waste Disposal Fund saw a negative performance as a result of additional costs related to the opening of the Drive Thru Recycling Center. Revenues from governmental activities decreased by $7.0 million from the prior year and revenues from business type activities increased $.7 million from the prior year. Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader’s understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City’s operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City’s assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City’s overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City’s financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long-term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an “Other Governmental Funds” column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City’s financial statements. 5 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund’s budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City’s operations and economy. The City as a Whole This section will identify, discuss, and analyze significant differences and trends that will enhance the reader’s understanding of the City’s financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($37.2 million) of the City’s revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services remained flat from the prior year with the sanitation fund increasing $319K (10.0%), water and sewer fund increasing $306K (1.5%) and governmental activities decreasing $700K in public safety. The increase in charges for services in the sanitation fund and the increase in the water and sewer fund are a result of an increase in user fees. Sales taxes are the next largest component of the revenue mix, providing 25.7% ($22.7 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1% sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. The City is affected by the formula used to distribute the County-wide sales tax among participating jurisdictions (only Cities and the County participate, School and other special districts do not). The formula is based, in part, on the property tax efforts of each jurisdiction. As the portion of the overlapping levy attributable to the City of Salina changes so does the City’s allocated portion of the County-wide sales tax. This change is recognized bi-annually and can affect the overall allocation of the City’s portion of the County-wide sales tax. In 2019, this allocation increased slightly which did not have a significant impact on the tax revenues. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax was to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 15.6% ($13.8 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by 4.0%. The total City mill levy increased by 8.6%. The overlapping levy increased in 2019 by 3.3%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $9.3 million from its peak of $39.7 million in 2007. At the 2019 tax rate, this exemption is equivalent to over $857K in annual lost revenue. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Motor vehicle value increased 4.6%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year 2019 2018 Change Real Estate and Personal Property Assessed Valuation 454,395,369$434,451,245$19,944,124$ City Mill Levy ($ per $1,000) Operating (General Fund)22.285 20.339 1.946 Debt Service 6.109 5.79 0.319 Total City Rate 28.394 26.129 2.265 Total Overlapping Levy 138.341 133.14 5.201 Percent of Total Taxes Collected 97.4% 95.9% 1.5% Ratio of Total Taxes (including delinquent collections) to Taxes Levied 98.6% 98.4% 0.2% Motor Vehicle Valuation 54,687,311$ 53,336,677$ 1,350,634$ Comparative Property Values and Tax Levy Rates The unemployment rate in Salina decreased slightly from 3.3% at the end of 2018 to 2.9% at the end of 2019, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force decreased slightly to 30,094 from 30,174 in 2018. In 2019, the top ten property taxpayers accounted for 10.05% of total assessed value. This is less concentrated than ten years ago (at 14.70%). Statement of Net Position Net position may, over time, provide an indicator of a government’s financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $231.9 million at December 31, 2019. This represents an increase in net assets of $8.1 million over 2018. A comparative Condensed Statement of Net Position at December 31, 2019 and 2018: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 2019 2018 2019 2018 2019 % of Total 2018 % of Total 2019-2018 change Cash and investments 31,406$ 34,302$ 34,957$ 32,140$ 66,363$ 16% 66,442$ 17% (79)$ Other current assets 17,201 16,774 2,512 2,630 19,713 5% 19,404 5% 309 Noncurrent (capital) assets 222,258 210,515 101,079 90,181 323,337 79%300,696 78%22,641 Total assets 270,865 261,591 138,548 124,951 409,413 100%386,542 100%22,871 Total deferred outflows of resources 5,073 5,527 546 802 5,619 100%6,329 100%(710) Total assets and deferred outflows of resources 275,939 267,118 139,094 125,753 415,033 392,871 22,162 Current liabilities 23,971 28,623 3,579 3,814 27,550 16% 32,437 21% (4,887) Noncurrent liabilities 98,696 90,931 41,765 31,332 140,461 84%122,263 79%18,198 Total liabilities 122,667 119,554 45,344 35,146 168,011 100%154,700 100%13,311 Total deferred inflow s of resources 14,913 14,113 198 224 15,112 14,337 775 Net position: Net investment in capital assets 151,527 144,845 63,301 62,368 214,828 92% 207,213 93% 7,615 Restricted for permanent funds 528 514 - - 528 0% 514 0% 14 Restricted for debt service 1,142 1,851 1,368 1,512 2,510 1% 3,363 2% (853) Unrestricted (14,839) (13,759) 28,883 26,503 14,044 6%12,744 6%1,300 Total net position 138,359 133,451 93,552 90,383 231,910 100%223,834 100%8,076 Percent of total net position 60% 60% 40% 40% 100%100% Cash and investments as a percentage of current liabilities 131% 120% 977% 843% 241%205% Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-Type Activities Total Primary Government The largest segment of the City’s net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City’s obligations to citizens and creditors. In 2019, the amount of net investment in capital assets increased by $7.6 million. Amount restricted for debt service decreased by $853 thousand. Unrestricted increased by $1.3 million. Outside of these changes, 2019 resulted in a $8.1 million increase to the net position. Total liabilities increased in governmental activities and increased in business-type activities. In governmental activities, current liabilities decreased, and non-current liabilities increased primarily due to an increase general obligation bonds. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Statement of Activities A Condensed Statement of Activities is shown below: 2019 2018 2019 2018 2019 % 2018 % 2019-2018 Change Program Revenues: Charges for Services 9,730$ 10,411$ 27,423$ 27,061$37,153$ 42% 37,472$ 43% (319)$ Operating Grants and Contributions 4,540 4,300 - - 4,540 5% 4,300 5% 240 Capital Grants and Contributions - 4,635 - - - 0% 4,635 0% (4,635) General Revenues: Property Taxes 13,774 12,508 - - 13,774 16% 12,508 15% 1,266 Sales Taxes 22,742 22,209 - - 22,742 26% 22,209 25% 533 Other Taxes 6,975 7,240 - - 6,975 8% 7,240 8% (265) Investment Revenue 670 183 - 233 670 1% 416 0% 254 Other Miscellaneous 1,168 1,062 847 153 2,015 2%1,215 2%800 Total Revenues:59,599 62,548 28,269 27,447 87,869 100%89,995 100%(2,126) Expenses: General Government 10,866 12,013 - - 10,866 14% 12,013 15% (1,147) Public Safety 25,358 23,892 - - 25,358 32% 23,892 30% 1,466 Public Works 10,528 10,458 - - 10,528 13% 10,458 13% 70 Public Health and Sanitation 1,156 1,256 - - 1,156 1% 1,256 2% (100) Culture and Recreation 6,879 7,040 - - 6,879 9% 7,040 9% (161) Planning and Development 2,522 2,369 - - 2,522 3% 2,369 3% 153 Solid Waste Disposal - - 2,871 2,382 2,871 4% 2,382 3% 489 Water and Sewer - - 14,294 15,190 14,294 18% 15,190 19% (896) Sanitation - - 2,266 2,419 2,266 3% 2,419 3% (153) Golf Course - - 888 926 888 1% 926 1% (38) Interest on Long Term Debt 2,169 2,117 - - 2,169 3%2,117 3%52 Total Expenses 59,479 59,145 20,319 20,917 79,798 100%80,062 100%(264) Increase in net assets before transfers 121 3,403 7,950 6,530 8,071 9,933 (1,862) Transfers and other extraordinary items 4,782 4,831 (4,782) (4,832) - (1) 1 Change in Net Position 4,902 8,234 3,169 1,698 8,071 9,932 (1,861) Net Position January 1 133,452 123,701 90,383 89,083 223,835 212,784 11,051 Prior Period Adjustment 4 1,518 -(398)4 1,120 (1,116) Net Position January 1, restated 133,456 125,219 90,383 88,685 223,839 213,904 9,935 Net Position December 31 138,359$133,453$93,552$90,383$231,910$223,836$8,074$ Condensed Statement of Activities For the Year Ended December 31 Governmental Activities Business-Type Activities Total Primary Government (In $000) 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Governmental Activities. Charges for services attributable to governmental activities totaled $9.7 million, and operating grants for those purposes were $4.5 million. Charges for services decreased slightly and capital grants increased from the prior year, while operating grants decreased. The balance was funded by general revenues. Sales taxes accounted for $22.7 million of general revenues, with property taxes providing $13.8 million. The net position increased by $4.9 million as a result of governmental activities. This increase was primarily related to the increase in sales and other taxes. Total expenses for governmental activities for the year ending December 31, 2019 were $59.5 million compared to $59.1 million in 2018. Governmental activities represent 75%of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 32% of the total. Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $20.3 million, or 24% of the City’s total expenses. The majority of this expense ($14.3 million) is attributable to water and sewer operations, with the other activities costing a combined total of $6.0 million. Net position increased by $3.2 million. This increase was primarily related to the increase in water and sewer fund revenues and a decrease in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2019 and December 31, 2018. Fund 2019 2018 Change General 9,307$ 6,743$ 2,564$ Tourism and Convention 451 458 (7) Special Gas 2,191 1,532 659 Sales Tax Capital 2,406 1,984 422 Schilling Capital Improvement 1,949 2,136 (187) Debt Service 1,142 1,851 (709) Capital Projects (7,652) (694) (6,958) SFH QalicB 1,310 1,218 92 Other Governmental Funds 4,671 3,861 810 15,776$19,089$ (3,313)$ Governmental Fund Balances as of December 31, (in 000's) Total governmental fund balances decreased by $3.3 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund decrease was largely the result of the use of funds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2019 and 2018. Fund 2019 2018 Change Revenues (Including Other Financing Sources) General 44,228$ 41,532$ 2,696$ Tourism and Convention 1,889 1,795 94 Special Gas 2,027 1,653 374 Sales Tax Capital 8,501 8,225 276 Schilling Capital Improvement 21 15 6 Debt Service 6,241 6,602 (361) Capital Projects 11,871 13,555 (1,684) SFH QalicB 499 504 (5) Other Governmental Funds 4,745 4,161 584 Total Revenues 80,021 78,042 1,979 Less Other Sources (21,247)(21,622)375 Revenues, net of other sources 58,774$ 56,420$ 2,354$ Expenditures (Including Other Finacing Uses) General 41,664$ 41,672$ (8)$ Tourism and Convention 1,896 1,550 346 Special Gas 1,368 1,203 165 Sales Tax Capital 8,060 8,324 (264) Schilling Capital Improvement 208 904 (696) Debt Service 6,950 6,955 (5) Capital Projects 18,830 15,144 3,686 SFH QalicB 407 1,001 (594) Other Governmental Funds 3,954 4,653 (699) Total Expenditures 83,335 81,406 1,929 Less Other Uses (5,073) (4,186) (887) Expenditures, net of other uses 78,262$ 77,220$ 1,042$ Total revenues, including other sources, were up $2.4 million compared to 2018, with the General Fund showing the largest increase between the two years, which was $2.7 million. Total expenditures increased $1.9 million over 2018. The majority of that increase was in the Capital Projects Fund as a result of increased spending on projects, specifically the Downtown Streetscape and Police Training Facility projects. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: 2019 2018 Change 2019 2018 Change Current Assets 7,073$ 6,569$ 504$ 28,307$ 26,338$ 1,969$ Capital Assets 1,497 2,350 (853) 97,956 86,535 11,421 Deferred Outflows 67 72 (5)371 610 (239) Total Assets and deferred outflows 8,636$ 8,991$ (355)$ 126,634$ 113,483$ 13,151$ Current Liabilities 103$ 461$ (358)$ 3,273$ 3,183$ 90$ Noncurrent Liabilities 2,865 2,847 18 38,016 27,576 10,440 Deferred Inflows 28 30 (2)126 144 (18) Total Liabilities 2,995$ 3,338$ (343)$ 41,415$ 30,903$ 10,512$ Net investment in capital assets 1,107$ 1,570$ (463)$ 60,568$ 59,502$ 1,066$ Restricted - - - 1,368 1,512 - Unrestricted 4,534 4,083 451 23,283 21,566 1,717 Total Net Position 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ Current Assets as a percentage of current liabilities 6885% 1425% 865% 827% 2019 2018 Change 2019 2018 Change Current Assets 2,012$ 1,747$ 265$ 77$ 116$ (39)$ Capital Assets 1,165 886 279 462 410 52 Deferred Outflows 84 92 (8)25 27 (2) Total Assets 3,261$ 2,725$ 536$ 563$ 553$ 10$ Current Liabilities 137$ 106$ 31$ 66$ 64$ 2$ Noncurrent Liabilities 668 684 (16)215 225 (10) Deferred Inflows 35 38 (3)10 11 (1) Total Liabilities 840$ 828$ 12$ 291$ 300$ (9)$ Net investment in capital assets 1,165$ 886$ 279$ 462$ 410$ 52$ Restricted - - - - - - Unrestricted 1,256 1,011 245 (187)(103)(84) Total Net Position 2,421$ 1,897$ 524$ 275$ 307$ (32)$ Current Assets as a percentage of current liabilities 1469% 1648% 117% 181% Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Disposal Water and Sewer Sanitation Golf Course 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with three of the four funds reflecting increases in net position. 2019 2018 Change 2019 2018 Change Operating Revenues 3,499$ 3,116$ 383$ 20,588$ 20,207$ 381$ Operating Expenses 2,849 2,353 496 13,013 14,348 (1,335) Operating Income 649 763 (114) 7,575 5,859 1,716 Non-operating revenues (expenses)(22)17 (39)(1,281)(667)(614) Income (Loss) before Transfers 627 780 (153) 6,294 5,192 1,102 Transfers in (out)(640)(690)50 (3,650) (3,650) - Change in Net Position (13)90 (103)2,644 1,542 1,102 Net Position January 1 5,653 6,237 (584) 82,580 80,697 1,883 Restatement -(674)674 (5)341 (346) Net Position January 1, restated 5,653 5,563 90 82,575 81,038 1,537 Net Position December 31 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ 2019 2018 Change 2019 2018 Change Operating Revenues 3,276$ 3,006$ 270$ 907$ 884$ 23$ Operating Expenses 2,266 2,419 (153)888 926 (38) Operating Income 1,010 587 423 19 (42) 61 Non-operating revenues (expenses)-11 (11)-661 (661) Income (Loss) before Transfers 1,010 598 412 19 619 (600) Transfers in (out)(492)(492)1 - - - -- Change in Net Position 519 106 413 19 619 (600) Net Position January 1 1,897 1,856 41 253 292 (39) Restatement 5 (66)71 -2 (2) Net Position January 1, restated 1,902 1,790 112 253 294 (41) Net Position December 31 2,421$ 1,896$ 525$ 272$ 913$ (641)$ Comparative Summary of Revenues, Expenses and Changes in Net Position for the Year Ended December 31 (In $000's) Solid Waste Disposal Water and Sewer Sanitation Golf Course 13 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Budgetary Highlights The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2019. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2019 was $323,337,161, net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2019 and 2018: 2019 2018 2019 2018 2019 2018 Equipment, Furniture and Fixtures 2,352$ 2,374$ 1,536$ 1,489$ 3,888$ 3,863$ Vehicles 2,854 2,957 1,288 1,208 4,142 4,165 Buildings and Improvements 30,556 31,759 8,519 8,941 39,075 40,700 Land 24,224 24,094 2,386 2,060 26,610 26,154 Land Leased Under Capital Assets 423 423 - - 423 423 Infrastructure 116,264 116,365 79,824 72,312 196,088 188,677 Leasehold Improvements 357 326 - - 357 326 Construction in Progress 45,228 32,217 7,527 4,171 52,755 36,388 Total 222,258$210,515$101,079$90,181$323,337$300,696$ Capital Asset Balances Net of Depreciation as of December 31 (In 000's) Governmental Activity Business-type Activity Total Changes to capital assets may be summarized as follows: Governmental Activity Business-Type Activity Total Additions 22,005$ 26,293$ 48,298$ Retirements (4,622) (11,402) (16,024) Depreciation (6,835)(4,815)(11,651) Net Additions 10,548$ 10,075$ 20,623$ Changes to Capital Assets, 2019 (in 000's) Additional information on the City’s capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Debt Management The City’s general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2019 totaled $57,623,908. In addition, there were temporary notes outstanding in the amount of $11,170,000, as well as a financing operating lease in the amount of $656,260. Business-type activities had $11,122,175 in revenue bonds outstanding, as well as $4,116,515 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $22,539,686. The City engaged in the following debt transactions during 2019: On July 30th, the City issued 2019-1, $6,000,000 of temporary notes. The proceeds were used to finance construction to Downtown Streetscape, Police Training Facility Design and 2 special assessment projects. On November 27th, the City issued 2019-2, $13,500,000 in temporary notes to pay off the 2019-1 notes as well as finance construction of the Downtown Streetscape and Police Training Facility. This note will be partially refinanced into a long-term bond issue in 2019 and partially in 2020. On November 27th, the City issued 2019A, $2,090,000 in General Obligation Bonds to finance construction costs for the Grand Prairie II and River Trail Second Addition special assessment projects, as well as to finance the Beechcraft Road project. On December 1, 2019, the City issued $18,520,000 in Senior Special Obligation Revenue Bonds and $4,320,000 in Subordinate Special Obligation Revenue Bonds to fund STAR Bond district projects. Additional information on the City’s debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 %$6,&),1$1&,$/67$7(0(176 Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments 31,406,384$ 34,956,928$ 66,363,312$ 2,222,111$ 655,020$ Receivables (net of allowance for uncollectibles) Accounts 2,080,843 2,033,882 4,114,725 12,159 848,249 Taxes 13,863,340 - 13,863,340 -- Interest 9,518 16 9,534 -- Inventory 339,878 477,644 817,522 30,954 - Restricted cash and investments 907,687 - 907,687 -- Prepaid expenses ---45,192 9,352 Total current assets 48,607,650 37,468,470 86,076,120 2,310,416 1,512,621 Noncurrent assets: Capital assets, nondepreciable Construction in progress 45,227,729 7,526,968 52,754,697 128,057 132,217 Land 24,646,334 2,386,334 27,032,668 1,483,219 10,166,125 Capital assets, depreciable 279,528,709 162,361,912 441,890,621 8,494,072 81,240,459 Less: Accumulated depreciation 127,144,929 71,195,896 198,340,825 5,084,636 47,428,034 Total noncurrent assets 222,257,843 101,079,318 323,337,161 5,020,712 44,110,767 Total assets 270,865,493 138,547,788 409,413,281 7,331,128 45,623,388 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 97,708 43,897 141,605 -4,220 OPEB deferred outflows of resources 62,171 7,919 70,090 -- Pension deferred outflows of resources 4,842,013 484,280 5,326,293 62,093 131,923 Deferred charge on bond issuance 71,376 9,925 81,301 -1,140,061 Total deferred outflows of resources 5,073,268 546,021 5,619,289 62,093 1,276,204 Total assets and deferred outflows of resources 275,938,761$ 139,093,809$ 415,032,570$ 7,393,221$ 46,899,592$ Liabilities: Current liabilities: Accounts payable 3,588,272$ 448,194$ 4,036,466$ 45,557$ 867,149$ Retainage payable 1,980,498 153,409 2,133,907 -- Accrued liabilities 649,172 - 649,172 36,478 145,241 Accrued interest payable 78,459 325,876 404,335 - 227,145 Deposits payable - 229,447 229,447 98,022 - Current portion of compensated absences 2,030,465 478,552 2,509,017 2,989 - Current portion of temporary notes payable 11,170,000 - 11,170,000 -- Current portion of loans payable - 539,863 539,863 -- Current portion of revenue bonds payable - 715,000 715,000 -- Current portion of special assessment debt payable ----2,350 Current portion of general obligation bonds payable 4,474,480 688,388 5,162,868 -1,425,000 Total current liabilities 23,971,346 3,578,729 27,550,075 183,046 2,666,885 Noncurrent liabilities: Accrued liabilities 151,818 - 151,818 39,222 - Compensated absences 755,612 178,087 933,699 26,893 - Security deposits returnable ----57,564 OPEB obligation 3,121,647 397,680 3,519,327 - 13,338 KPERS OPEB obligation 349,412 156,983 506,395 8,186 - Net pension liability 28,968,806 3,148,126 32,116,932 331,750 632,856 Loans payable 12,199,016 21,999,823 34,198,839 -- Revenue bonds payable - 10,407,175 10,407,175 -- Special assessment debt payable ----2,455 General obligation bonds payable 53,149,428 3,428,127 56,577,555 - 20,982,297 Landfill post-closure care liabilities -2,048,896 2,048,896 -- Total noncurrent liabilities 98,695,739 41,764,897 140,460,636 406,051 21,688,510 Total liabilities 122,667,085 45,343,626 168,010,711 589,097 24,355,395 Deferred inflows of resources: Unavailable revenue - property taxes 13,423,860 - 13,423,860 8,599 - KPERS OPEB deferred inflows of resources 66,990 30,097 97,087 2,476 - OPEB deferred inflows of resources 146,354 18,645 164,999 -4,694 Pension deferred inflows of resources 1,275,958 149,620 1,425,578 15,791 36,718 Total deferred inflows of resources 14,913,162 198,362 15,111,524 26,866 41,412 Total liabilities and deferred inflows of resources 137,580,247$ 45,541,988$ 183,122,235$ 615,963$ 24,396,807$ Net Position Net investment in capital assets 151,527,232$ 63,300,942$ 214,828,174$ 5,020,712$ 21,698,665$ Restricted for: Permanent funds: Expendable 527,536 - 527,536 11,334 - Debt service 1,142,418 1,367,894 2,510,312 -- Unrestricted [14,838,672] 28,882,985 14,044,313 1,745,212 804,120 Total net position 138,358,514$ 93,551,821$ 231,910,335$ 6,777,258$ 22,502,785$ Primary Government CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2019 Component Units The notes to the basic financial statements are an integral part of this statement. 16 Operating Capital Total Total Total Salina Salina Charges for Grants and Grants and Governmental Business-type Primary Housing Airport Expenses Services Contributions Contributions Activities Activities Government Authority Authority Governmental activities: General government 10,865,700$ 3,400,883$ 750,696$ -$[6,714,121]$ -$[6,714,121]$ -$-$ Public safety 25,357,782 4,356,956 1,365,509 - [19,635,317]- [19,635,317]-- Public works 10,528,485 309,292 1,438,330 - [8,780,863]- [8,780,863]-- Public health and sanitation 1,156,165 45,549 277,304 - [833,312]- [833,312]-- Culture and recreation 6,879,281 1,513,628 578,558 - [4,787,095]- [4,787,095]-- Planning and development 2,522,266 103,727 129,662 - [2,288,877]- [2,288,877]-- Interest on long-term debt 2,168,897 ---[2,168,897] -[2,168,897]-- Total governmental activities 59,478,576 9,730,035 4,540,059 -[45,208,482]-[45,208,482]-- Business-type activities: Solid Waste Disposal 2,871,468 3,082,199 - - - 210,731 210,731 - - Water and Sewer 14,293,758 20,255,017 - - - 5,961,259 5,961,259 - - Sanitation 2,265,646 3,275,987 - - - 1,010,341 1,010,341 - - Golf Course 888,494 809,636 ---[78,858] [78,858] -- Total business-type activities 20,319,366 27,422,839 ---7,103,473 7,103,473 -- Total primary government 79,797,942$ 37,152,874$4,540,059$ -$[45,208,482]7,103,473 [38,105,009] -- Component units: Salina Housing Authority 2,813,581$ 407,030$ 2,128,578$ 70,557$ - - - [207,416] - Salina Airport Authority 6,167,660 2,432,958 - 1,727,674 ----[2,007,028] Total component units 8,981,241$ 2,839,988$ 2,128,578$ 1,798,231$ ---[207,416] [2,007,028] General Revenues: Property taxes levied for General purposes 9,707,788 - 9,707,788 - 2,371,463 Debt service 2,663,942 - 2,663,942 - - Motor vehicle tax General purposes 1,402,643 - 1,402,643 - - Sales tax General purposes 13,418,742 - 13,418,742 - - Selective purposes 9,323,065 - 9,323,065 - - Other taxes General purposes 6,975,000 - 6,975,000 - - Investment revenues 669,909 - 669,909 28,136 17,954 Miscellaneous 1,168,245 846,593 2,014,838 83,865 21,263 Transfers, net 4,781,500 [4,781,500] --- Subtotal general revenues 50,110,834 [3,934,907] 46,175,927 112,001 2,410,680 Change in net position 4,902,352 3,168,566 8,070,918 [95,415] 403,652 Net position - beginning 133,451,840 90,383,255 223,835,095 6,872,673 22,099,133 Prior period adjustment 4,322 -4,322 -- Net position - beginning, restated 133,456,162 90,383,255 223,839,417 6,872,673 22,099,133 Net position - ending 138,358,514$93,551,821$ 231,910,335$6,777,258$22,502,785$ Changes in Net Position Component UnitsPrimary GovernmentProgram Revenues CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 Net [Expenses] Revenue and The notes to the basic financial statements are an integral part of this statement. 17 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments 8,106,861$ 853$ 1,910,307$ 2,712,288$ Restricted cash - - - - Receivables (net) Accounts 1,628,614 450,217 - - Taxes 10,430,287 - 327,922 - Interest 9,518 - - - Inventory 211,986 - - - Due from other funds ---- Total assets 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 708,270$ -$ 45,246$ 139,896$ Retainage payable - - 2,005 166,517 Temporary notes payable - - - - Due to other funds ---- Total liabilities 708,270 -47,251 306,413 Deferred inflows of resources Unavailable revenue - property taxes 10,236,618 - - - Unavailable revenue - other 135,204 --- Total deferred inflows of resources 10,371,822 --- Fund balance: Nonspendable 211,986 - - - Restricted - 451,070 2,120,391 - Committed - - - 1,666,423 Assigned 273,808 - 70,587 739,452 Unassigned 8,821,380 --- Total fund balances 9,307,174 451,070 2,190,978 2,405,875 Total liabilities, deferred inflows of resources and fund balances 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds 1,949,346$ 1,089,325$ 7,314,875$ 8,148$ 4,861,928$ 27,953,931$ - - - 907,687 - 907,687 - - - 864,660 2,012 2,945,503 - 3,105,131 - - - 13,863,340 -----9,518 -----211,986 --349,515 --349,515 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ -$-$ 2,455,027$ -$ 193,423$ 3,541,862$ - - 1,691,417 120,559 - 1,980,498 - - 11,170,000 - - 11,170,000 ---349,515 -349,515 --15,316,444 470,074 193,423 17,041,875 - 3,052,038 --- 13,288,656 -----135,204 -3,052,038 ---13,423,860 -----211,986 - 1,142,418 - - 1,509,770 5,223,649 1,941,623 - 152,576 1,310,421 3,015,015 8,086,058 7,723 - - - 145,732 1,237,302 --[7,804,630] --1,016,750 1,949,346 1,142,418 [7,652,054] 1,310,421 4,670,517 15,775,745 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ The notes to the basic financial statements are an integral part of this statement. 18 Total Governmental Fund Balances 15,775,745$ Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs 71,376 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 349,234,538 Accumulated depreciation is 126,991,328 222,243,210 Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position.4,976,291 Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position.[1,479,693] Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [864,660] An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. 2,565,728 The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences 2,754,631 Net OPEB obligation 3,460,931 Net pension liability 28,812,538 Bonds payable 57,623,908 Loans payable 12,199,016 Accrued interest on the bonds 78,459 [104,929,483] Net Position of Governmental Activities 138,358,514$ CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 19 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes 9,561,490$ -$-$-$ Delinquent taxes 146,298 - - - Motor vehicle taxes 1,093,438 - - - General sales taxes 13,418,742 - - - Selective sales taxes - - - 8,500,559 Other taxes 5,086,492 1,888,508 - - Intergovernmental 1,351,967 - 1,433,830 - Special assessments - - - - Licenses and permits - - - - Charges for services 5,816,485 - - - Investment revenue 613,249 - - - Donations - - - - Miscellaneous 690,676 -432,910 - Total revenues 37,778,837 1,888,508 1,866,740 8,500,559 EXPENDITURES: Current General government 4,581,505 - - - Public safety 23,692,445 - - - Public works 5,473,414 - 406,058 - Public health and sanitation 816,636 - - - Culture and recreation 4,379,441 - - - Planning and development 836,690 1,046,945 - - Miscellaneous - - - - Capital outlay 985,861 - 962,163 4,733,263 Debt service Principal retirement - - - - Interest and other charges ---- Total expenditures 40,765,992 1,046,945 1,368,221 4,733,263 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses][2,987,155] 841,563 498,519 3,767,296 OTHER FINANCING SOURCES [USES] Issuance of bonds - - - - Issuance of temporary notes - - - - Bond premium - - - - Capital contribution - - - - Transfers in 6,449,500 - 160,000 - Transfers [out][897,748] [848,875] -[3,326,350] Total other financing sources [uses]5,551,752 [848,875] 160,000 [3,326,350] Net change in fund balance 2,564,597 [7,312] 658,519 440,946 Fund balance - Beginning of year 6,742,577 458,382 1,532,459 1,984,324 Prior period adjustment ---[19,395] Fund balance - Beginning of year, restated 6,742,577 458,382 1,532,459 1,964,929 Fund balance - End of year 9,307,174$ 451,070$ 2,190,978$ 2,405,875$ CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds -$ 2,620,653$ -$-$-$ 12,182,143$ - 43,289 --- 189,587 - 309,205 --- 1,402,643 -----13,418,742 ----822,506 9,323,065 -----6,975,000 ----1,787,565 4,573,362 - 1,540,285 55,845 -- 1,596,130 ----4,500 4,500 --- 492,917 494,470 6,803,872 20,767 -- 6,460 29,433 669,909 ----90,084 90,084 -94,519 282,720 -43,956 1,544,781 20,767 4,607,951 338,565 499,377 3,272,514 58,773,818 -----4,581,505 -----23,692,445 ----256,444 6,135,916 ----303,950 1,120,586 ----1,667,994 6,047,435 --- 31,600 396,101 2,311,336 ----3535 207,547 - 13,751,490 175,278 1,096,882 21,912,484 - 5,413,015 4,725,999 - 185,000 10,324,014 -1,536,834 352,011 200,044 47,278 2,136,167 207,547 6,949,849 18,829,500 406,922 3,953,684 78,261,923 [186,780] [2,341,898] [18,490,935] 92,455 [681,170] [19,488,105] -- 11,090,000 -- 11,090,000 ------ -- 442,878 -- 442,878 ------ - 1,632,958 -- 1,472,014 9,714,472 -----[5,072,973] -1,632,958 11,532,878 -1,472,014 16,174,377 [186,780] [708,940] [6,958,057] 92,455 790,844 [3,313,728] 2,136,126 1,851,358 [693,997] 1,217,966 3,861,345 19,090,540 ----18,328 [1,067] 2,136,126 1,851,358 [693,997] 1,217,966 3,879,673 19,089,473 1,949,346$ 1,142,418$ [7,652,054]$ 1,310,421$ 4,670,517$ 15,775,745$ The notes to the basic financial statements are an integral part of this statement. 20 Total Net Change In Fund Balances - Governmental Funds [3,313,728]$ Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets [8,190] Capital outlays 17,835,539 Depreciation expense [6,240,802] 11,586,547 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. 29,485 An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. 1,597,174 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [834,660] Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.[29,980] Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. [999,728] Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. [17,550,023] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities.14,417,265 Changes In Net Position of Governmental Activities 4,902,352$ CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 21 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) GENERAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 9,561,490$ 9,582,319$ 9,582,319$ [20,829]$ Delinquent taxes 146,298 160,000 160,000 [13,702] Motor vehicle taxes 1,073,265 1,008,720 1,008,720 64,545 General sales tax 13,418,742 13,829,194 13,829,194 [410,452] Other taxes 6,286,492 7,085,901 7,085,901 [799,409] Intergovernmental 1,351,967 1,135,255 1,135,255 216,712 Charges for services 4,051,536 5,907,154 5,907,154 [1,855,618] Investment revenue 892,731 10,000 10,000 882,731 Miscellaneous 690,673 632,907 632,907 57,766 Total revenues 37,473,194 39,351,450 39,351,450 [1,878,256] Expenditures General government 4,456,184 3,523,226 3,523,226 [932,958] Public safety 22,165,691 21,044,550 21,044,550 [1,121,141] Public works 5,524,886 5,652,826 5,652,826 127,940 Public health and sanitation 816,636 - - [816,636] Culture and recreation 4,375,589 5,361,919 5,361,919 986,330 Planning and development 1,069,690 3,437,251 3,437,251 2,367,561 Capital outlay 713,625 6,985,000 6,985,000 6,271,375 Total expenditures 39,122,301 46,004,772 46,004,772 6,882,471 Excess [deficiency] of revenues over [under] expenditures [1,649,107] [6,653,322] [6,653,322] 5,004,215 Other financing sources [uses] Transfers in 5,249,500 3,841,500 3,841,500 1,408,000 Transfers [out][897,748] [3,076,760] [3,076,760] 2,179,012 Total other financing sources [uses]4,351,752 764,740 764,740 3,587,012 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 2,702,645 [5,888,582] [5,888,582] 8,591,227 Unreserved fund balance, January 1 4,286,934 5,983,397 5,983,397 [1,696,463] Unreserved fund balance, December 31 6,989,579 94,815$ 94,815$ 6,894,764$ Reconciliation to GAAP Interest receivable 9,518 Accounts receivable 1,628,614 Taxes receivable 10,430,287 Inventory 211,986 Deferred revenue [10,236,618] Current year encumbrances 273,808 GAAP Fund Balance, December 31 9,307,174$ Budgeted Amounts See independent auditor's report on the financial statements. 22 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Other taxes 1,895,820$ 1,656,562$ 1,895,900$ [80]$ Investment revenue -150 -- Total revenues 1,895,820 1,656,712 1,895,900 [80] Expenditures Planning and development 1,046,945 914,818 1,046,945 - Total expenditures 1,046,945 914,818 1,046,945 - Excess [deficiency] of revenues over [under] expenditures 848,875 741,894 848,955 [80] Other financing sources [uses] Transfers [out][848,875][741,744][848,875]- Total other financing sources [uses][848,875][741,744][848,875]- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] - 150 80 [80] Unreserved fund balance, January 1 853 63,187 853 - Unreserved fund balance, December 31 853 63,337$ 933$ [80]$ Reconciliation to GAAP Accounts receivable 450,217 GAAP Fund Balance, December 31 451,070$ Budgeted Amounts See independent auditor's report on the financial statements. 23 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 1,426,232$ 1,417,590$ 1,417,590$ 8,642$ Miscellaneous 432,910 - - 432,910 Investment revenue -3,000 3,000 [3,000] Total revenues 1,859,142 1,420,590 1,420,590 438,552 Expenditures Public works 406,058 525,830 525,830 119,772 Capital outlay 859,528 946,243 946,243 86,715 Total expenditures 1,265,586 1,472,073 1,472,073 206,487 Excess [deficiency] of revenues over [under] expenditures 593,556 [51,483][51,483]645,039 Other financing sources [uses] Transfers in 160,000 160,000 160,000 - Total other financing sources [uses]160,000 160,000 160,000 - Excess [deficiency] of revenues and other sources over [under] 753,556 108,517 108,517 645,039 expenditures and other [uses] Unreserved fund balance, January 1 1,038,913 899,157 899,157 139,756 Unreserved fund balance, December 31 1,792,469 1,007,674$ 1,007,674$ 784,795$ Reconciliation to GAAP Taxes receivable 327,922 Current year encumbrances 70,587 GAAP Fund Balance, December 31 2,190,978$ Budgeted Amounts See independent auditor's report on the financial statements. 24 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Selective sales taxes 8,500,559$ 8,758,780$ 8,758,780$ [258,221]$ Investment revenue -5,000 5,000 [5,000] Total revenues 8,500,559 8,763,780 8,763,780 [263,221] Expenditures Capital outlay 4,944,758 6,541,080 6,541,080 1,596,322 Total expenditures 4,944,758 6,541,080 6,541,080 1,596,322 Excess [deficiency] of revenues over [under] expenditures 3,555,801 2,222,700 2,222,700 1,333,101 Other financing sources [uses] Transfers [out][3,326,350][3,073,878][3,073,878][252,472] Total other financing sources [uses][3,326,350][3,073,878][3,073,878][252,472] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 229,451 [851,178] [851,178] 1,080,629 Unreserved fund balance, January 1 1,436,972 1,763,089 1,763,089 [326,117] Unreserved fund balance, December 31 1,666,423 911,911$ 911,911$ 754,512$ Reconciliation to GAAP Current year encumbrances 739,452 GAAP Fund Balance, December 31 2,405,875$ Budgeted Amounts See independent auditor's report on the financial statements. 25 Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources:Disposal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments 6,874,432$ 26,289,593$ 1,754,760$ 38,143$ 34,956,928$ 3,452,453$ Receivables (net of allowance for uncollectibles) Accounts 198,322 1,578,182 257,378 - 2,033,882 - Interest 16 - - - 16 - Inventory and prepaid supplies -439,223 -38,421 477,644 127,892 Total current assets 7,072,770 28,306,998 2,012,138 76,564 37,468,470 3,580,345 Capital assets: Nondepreciable capital assets: Construction in progress - 7,526,968 - - 7,526,968 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 11,313,026 147,231,395 2,564,420 1,253,071 162,361,912 168,234 Less: accumulated depreciation 10,498,484 58,491,492 1,399,557 806,363 71,195,896 153,601 Total capital assets 1,496,542 97,956,205 1,164,863 461,708 101,079,318 14,633 Total assets 8,569,312 126,263,203 3,177,001 538,272 138,547,788 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 4,248 29,737 7,080 2,832 43,897 2,832 OPEB deferred outflows of resources 969 5,001 1,500 449 7,919 - Pension deferred outflows of resources 61,369 326,317 75,354 21,240 484,280 22,769 Deferred charge on bond issuance -9,925 --9,925 - Total deferred outflows of resources 66,586 370,980 83,934 24,521 546,021 25,601 Total assets and deferred outflows of resources 8,635,898$ 126,634,183$ 3,260,935$562,793$ 139,093,809$ 3,620,579$ Liabilities and deferred inflows of resources: Current liabilities Accounts payable 26,442$ 388,113$ 29,160$ 4,479$ 448,194$ 46,410$ Retainage payable - 153,409 -- 153,409 - Interest payable 5,262 320,614 -- 325,876 - Meter deposits payable - 229,447 -- 229,447 - Current portion of compensated absences payable 36,027 273,585 107,850 61,090 478,552 22,917 Current portion of accrued claims payable ----- 649,172 Current portion of loans payable - 539,863 -- 539,863 - Current portion of general obligation bonds payable 35,000 653,388 -- 688,388 - Current portion of revenue bonds payable -715,000 --715,000 - Total current liabilities 102,731 3,273,419 137,010 65,569 3,578,729 718,499 Noncurrent liabilities: Compensated absences payable 13,407 101,811 40,135 22,734 178,087 8,529 Accrued claims payable ----- 151,818 OPEB obligation 48,676 251,125 75,310 22,569 397,680 - KPERS OPEB obligation 15,192 106,343 25,320 10,128 156,983 10,128 Net pension liability 383,854 2,076,508 527,697 160,067 3,148,126 156,268 Payable from restricted assets Loans payable - 21,999,823 -- 21,999,823 - General obligation bonds payable 355,000 3,073,127 -- 3,428,127 - Revenue bonds payable - 10,407,175 -- 10,407,175 - Landfill post-closure care liabilities 2,048,896 ---2,048,896 - Total noncurrent liabilities 2,865,025 38,015,912 668,462 215,498 41,764,897 326,743 Total liabilities 2,967,756 41,289,331 805,472 281,067 45,343,626 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources 2,913 20,388 4,854 1,942 30,097 1,942 OPEB deferred inflows of resources 2,282 11,774 3,531 1,058 18,645 - Pension deferred inflows of resources 22,469 93,911 26,326 6,914 149,620 7,667 Total deferred inflows of resources 27,664 126,073 34,711 9,914 198,362 9,609 Total liabilities and deferred inflows of resources 2,995,420$ 41,415,404$ 840,183$ 290,981$ 45,541,988$ 1,054,851$ Net position Net investment in capital assets 1,106,542$ 60,567,829$ 1,164,863$ 461,708$ 63,300,942$ 14,633$ Restricted Restricted for bond retirement - 1,367,894 - - 1,367,894 - Unrestricted 4,533,936 23,283,056 1,255,889 [189,896] 28,882,985 2,551,095 Total net position 5,640,478$ 85,218,779$ 2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 26 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Operating revenues Charges for services 3,082,199$ 20,255,017$ 3,275,987$ 809,636$ 27,422,839$ 7,798,835$ Miscellaneous 416,369 332,662 -97,562 846,593 60,303 Total operating revenues 3,498,568 20,587,679 3,275,987 907,198 28,269,432 7,859,138 Operating expenses General government - - - - - 8,982,331 Public works 1,995,726 9,678,876 2,090,924 - 13,765,526 - Recreation - - - 840,279 840,279 - Depreciation 853,537 3,333,943 174,722 48,215 4,410,417 7,699 Total operating expenses 2,849,263 13,012,819 2,265,646 888,494 19,016,222 8,990,030 Operating income [loss]649,305 7,574,860 1,010,341 18,704 9,253,210 [1,130,892] Nonoperating revenues [expenses] Interest expense [22,205] [1,129,127] - - [1,151,332] - Accretion of bond premium - 55,915 - - 55,915 - Amortization of bond issuance costs -[207,727]--[207,727] - Total nonoperating revenues [expenses][22,205] [1,280,939] --[1,303,144] - Income [loss] before transfers 627,100 6,293,921 1,010,341 18,704 7,950,066 [1,130,892] Transfers from [to] other funds Transfers in ----- 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Total transfers [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Change in net position [12,900] 2,643,921 518,841 18,704 3,168,566 [990,892] Net position, January 1 5,653,378 82,580,128 1,896,641 253,108 90,383,255 3,556,620 Prior period adjustment -[5,270]5,270 --- Net position, January 1, restated 5,653,378 82,574,858 1,901,911 253,108 90,383,255 3,556,620 Net position, December 31 5,640,478$ 85,218,779$2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Cash flows from operating activities Cash received from customers and users 3,073,363$ 20,427,626$ 3,272,401$ 809,636$ 27,583,026$ 7,980,067$ Cash paid to suppliers of goods or services [1,264,517] [5,412,123] [1,144,660] [315,480] [8,136,780] [8,734,446] Cash paid to employees [677,451] [4,192,802] [926,570] [535,122] [6,331,945] [288,556] Other operating receipts 416,369 332,662 -97,562 846,593 60,303 Net cash provided by [used in] operating activities 1,547,764 11,155,363 1,201,171 56,596 13,960,894 [982,632] Cash flows from capital and related financing activities Purchase and construction of capital assets - [13,963,235] [453,771] [99,848] [14,516,854] - Proceeds from bonds - 10,330,000 - - 10,330,000 - Proceeds from loans - 12,434,835 - - 12,434,835 - Principal payments - loans - [527,499] - - [527,499] - Principal payments - general obligation bonds [390,000] [768,198] - - [1,158,198] - Principal payments - revenue bonds - [11,850,000] - - [11,850,000] - Interest paid [22,918] [1,051,885] --[1,074,803]- Net cash provided by [used in] capital and related financing activities [412,918] [5,395,982] [453,771] [99,848] [6,362,519] - Cash flows from investing activities Interest received ------ Cash flows from noncapital financing activities Transfers in - - - - - 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Net cash provided by [used in] noncapital financing activities [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Net increase [decrease] in cash and cash equivalents 494,846 2,109,381 255,900 [43,252] 2,816,875 [842,632] Cash and cash equivalents, January 1 6,379,586 24,185,482 1,493,590 81,395 32,140,053 4,295,085 Prior period adjustment -[5,270]5,270 --- Cash and cash equivalents, January 1, restated 6,379,586 24,180,212 1,498,860 81,395 32,140,053 4,295,085 Cash and cash equivalents, December 31 6,874,432$26,289,593$1,754,760$38,143$ 34,956,928$3,452,453$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 PROPRIETARY FUNDS The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] 649,305$ 7,574,860$ 1,010,341$ 18,704$ 9,253,210$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 853,537 3,333,943 174,722 48,215 4,410,417 7,699 [Increase] decrease in accounts receivable [8,836] 127,020 [3,586] - 114,598 - [Increase] decrease in inventory - 7,848 - [3,944] 3,904 [16,406] [Increase] decrease in deferred outflows 5,290 31,955 7,902 2,920 48,067 1,085 Increase [decrease] in accounts payable 2,199 108,818 3,706 [14,751] 99,972 [1,962] Increase [decrease] in retainage payable - [73,568] - - [73,568] - Increase [decrease] in accrued compensated absences [21,204] [4,797] 7,606 5,517 [12,878] [27,942] Increase [decrease] in claims payable - - - - - 181,232 Increase [decrease] in net pension liability 3,546 22,496 5,297 1,969 33,308 1,719 Increase [decrease] in net KPERS OPEB obligation [1,216] [3,042] [2,026] [811] [7,095] 4,659 Increase [decrease] in net OPEB obligation 444 2,284 686 204 3,618 - Increase [decrease] in meter deposits payable - 45,589 -- 45,589 - Increase [decrease] in deferred inflows [2,699] [18,043][3,477] [1,427] [25,646][1,824] Net cash provided by [used in] operating activities 1,547,764$ 11,155,363$1,201,171$56,596$ 13,960,894$[982,632]$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 29 ASSETS Cash and investments 270,096$ Total assets 270,096$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable 270,096$ Total liabilities 270,096$ December 31, 2019 CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS The notes to the basic financial statements are an integral part of this statement. 30 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five-member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority - The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five- member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority’s basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina - The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2019. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) - SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the City of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 50l(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity’s administrative offices. Salina Airport Authority Housing Authority of Salina Field House 3237 Arnold Ave. the City of Salina QALICB, Inc. Salina, KS 469 S. 5th 300 W. Ast St. Salina, KS Salina, KS Joint Ventures The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) (Kansas Regulatory Basis) Building Authority (Audited) Total unencumbered cash, December 31, 2019 1,596,458$ Total change in unencumbered cash, year ended December 31, 2019 301,873 Total cash receipts, year ended December 31, 2019 1,533,357 Total cash receipts from City of Salina 480,585 Complete financial statements for the joint venture may be obtained at the entity’s administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City’s governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues,are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C.Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure- driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker’s compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General Fund -To account for resources traditionally associated with government, which are not required legally,or by sound financial management to be accounted for in another fund. Tourism and Convention Fund - To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special Gas Fund - To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance,or improvement of streets within the City. Sales Tax Capital Fund - To account for 58% of the 1.25 cent sales tax designated for capital, debt, and human services purposes. Schilling Capital Improvement Fund - To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt Service Fund - To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital Projects Fund - To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB Fund - To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation Fund - To account for the operations of the City's refuse collection service. Solid Waste Disposal Fund - To account for the activities of the City's landfill. Golf Course Fund - To account for the operations of the municipal golf course. Water and Sewer Fund - To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1.Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type’s portion of this pool is displayed in the financial statements as “Cash and Investments.” The city’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2.Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2020. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance and Net Position (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer’s office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 50 Other equipment 5 -15 Vehicles 6 -10 Infrastructure 30 -50 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8.Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management’s intent to be used for specific purposes but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Governmental Governmental General Convention Gas Capital Improvement Service Projects QalicB Funds Funds Fund Balances: Nonspendable for: Inventory 211,986$ -$ -$ -$ -$-$ -$ -$ -$ 211,986$ Restricted for: Public works -- 2,120,391 - - - - -- 2,120,391 Public health and sanitation -- -- - - - - 234 234 Culture and recreation -- -- - - - - 348,866 348,866 Planning and development -451,070 -- - - -- 221,075 672,145 Debt payments -- -- -1,142,418 -- 939,595 2,082,013 Committed for: Public safety -- -- - - - - 351,372 351,372 Culture and recreation -- -- - - - - 587,642 587,642 Planning and development -- -- - - - 1,310,421 256,847 1,567,268 Cemetery -- -- - - - - 521,641 521,641 Capital improvements -- -1,666,423 1,941,623 -152,576 -1,297,513 5,058,135 Assigned for: General government 20,255 - - - - - - - - 20,255 Public safety -- -- - - - - 145,732 145,732 Public works 19,000 - - - - - - - - 19,000 Culture and recreation 1,553 - - - - - - - - 1,553 Capital improvements 233,000 - 70,587 739,452 7,723 - - - - 1,050,762 Unassigned:8,821,380 - - - - - [7,804,630] - - 1,016,750 Total Fund Balances 9,307,174$451,070$2,190,978$2,405,875$1,949,346$1,142,418$[7,652,054]$1,310,421$4,670,517$ 15,775,745$ Major Governmental Funds 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, changes in the pension and OPEB plan liability proportion and assumptions, net difference between projected and actual earnings on pension plan and OPEB plan investments and differences between pension and OPEB plan liability expected and actual experience are reported as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue – property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, differences between expected and actual experience, changes in assumptions, and changes in the pension liability and OPEB plan proportion are reported as deferred inflows. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11.Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2019 budget was amended for the Sales Tax Economic Development, Tourism and Convention, Special Alcohol and Health Insurance funds. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners’ Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25.At December 31, 2019, the statutory limit for the City was $152,724,804, providing a debt margin of $85,059,351. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2019, management discovered certain errors that occurred in the prior year. The effects of these items caused a restatement to net position or fund balance as follows: Sales Tax Police Water and Governmental Capital Grants Sewer Sanitation Activities Fund Fund Fund Fund Net Position/Fund Balance, 133,451,840$ 1,984,324$ [24,544]$ 82,580,128$ 1,896,641$ December 31, 2018 Prior Period Adjustment 4,322 [19,395]18,328 [5,270] 5,270 Net Position/Fund Balance, December 31, 2018, Restated 133,456,162$1,964,929$[6,216]$ 82,574,858$1,901,911$ Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City’s cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City’s investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody’s investors service or Standard and Poor’s corporation, and various other investments as specified in KSA 10-131. At December 31, 2019, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Investment Pool 317,303$ S&P AAAf/S1+ Total fair value 317,303$ The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City’s investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’s deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31, 2019 the City’s deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31, 2019, the balance of the construction account, Interest Reserve, and Operating Reserve was $495,071, $286,100, and $126,516, respectively. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt SFH Other General Convention Gas Service QalicB Governmental Subtotal Primary Government Receivables: Accounts 7,109,224$ 450,217$ -$ -$864,660$ 3,216$ 8,427,317$ Taxes 10,430,287 - 327,922 3,105,131 --13,863,340 Interest 9,517 -----9,517 Gross receivables 17,549,028 450,217 327,922 3,105,131 864,660 3,216 22,300,174 Less: allowance for uncollectibles [5,480,609] ----[1,204] [5,481,813] Total 12,068,419$ 450,217$ 327,922$ 3,105,131$ 864,660$ 2,012$ 16,818,361$ Solid Water Waste and Disposal Sewer Sanitation Total Primary Government Receivables: Accounts 198,322$ 2,861,380$ 466,648$ 11,953,667$ Taxes ---13,863,340 Interest 16 --9,533 Gross receivables 198,338 2,861,380 466,648 25,826,540 Less: allowance for uncollectibles -[1,283,198][209,270] [6,974,281] Total 198,338$ 1,578,182$ 257,378$ 18,852,259$ Component Units Salina Airport Authority Accounts 99,749$ Grants 750,000 Less: allowance for uncollectibles [1,500] Total Salina Airport Authority 848,249 Salina Housing Authority Accounts 12,347 Less: allowance for uncollectibles [986] Interest 798 Total Salina Housing Authority 12,159 Total 860,408$ C. Interfund Receivables and Payables The composition of interfund balances as of December 31, 2019, is as follows: Fund Types Due From Due To Capital Project Fund 349,515$ -$ SFH QalicB Fund -349,515 349,515$ 349,515$ The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2019, was as follows: Balance Adj. Bal.Balance 12/31/2018 Adjustments 12/31/2018 Additions Retirements 12/31/2019 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress 32,217,207$ -$32,217,207$ 17,029,601$ 4,019,079$ 45,227,729$ Land 24,093,535 -24,093,535 130,000 -24,223,535 Leased land under capital lease 422,799 -422,799 --422,799 Capital assets, being depreciated Infrastructure 204,630,178 -204,630,178 3,878,632 -208,508,810 Buildings and improvements 53,014,858 -53,014,858 144,088 -53,158,946 Vehicles 10,191,330 -10,191,330 575,032 542,068 10,224,294 Equipment, furniture and fixtures 7,118,105 5,389 7,123,494 216,528 60,746 7,279,276 Leasehold improvements 326,193 -326,193 31,190 -357,383 Total capital assets 332,014,205 5,389 332,019,594 22,005,071 4,621,893 349,402,772 Less accumulated depreciation for: Infrastructure 88,265,257 -88,265,257 3,979,608 -92,244,865 Buildings and improvements 21,255,995 -21,255,995 1,346,879 -22,602,874 Vehicles 7,233,567 -7,233,567 670,702 533,878 7,370,391 Equipment, furniture and fixtures 4,743,932 -4,743,932 243,613 60,746 4,926,799 Total accumulated depreciation 121,498,751 -121,498,751 6,240,802 594,624 127,144,929 Governmental activities capital assets, net 210,515,454$ 5,389$ 210,520,843$ 15,764,269$ 4,027,269$ 222,257,843$ Business-type activities: Capital assets, not being depreciated Construction in progress 4,171,178$ -$4,171,178$ 14,352,812$ 10,997,022$ 7,526,968$ Land 2,059,834 -2,059,834 326,500 -2,386,334 Capital assets, being depreciated Infrastructure 119,170,313 -119,170,313 10,997,022 -130,167,335 Buildings and improvements 22,579,936 -22,579,936 --22,579,936 Vehicles 3,819,646 -3,819,646 310,539 267,147 3,863,038 Equipment, furniture and fixtures 5,570,277 13,164 5,583,441 306,011 137,849 5,751,603 Total capital assets 157,371,184 13,164 157,384,348 26,292,884 11,402,018 172,275,214 Less accumulated depreciation for: Infrastructure 46,858,117 -46,858,117 3,485,597 -50,343,714 Buildings and improvements 13,639,506 -13,639,506 421,287 -14,060,793 Vehicles 2,611,814 -2,611,814 230,626 267,146 2,575,294 Equipment, furniture and fixtures 4,081,039 -4,081,039 272,905 137,849 4,216,095 Total accumulated depreciation 67,190,476 -67,190,476 4,410,415 404,995 71,195,896 Business-type activities capital assets, net 90,180,708$ 13,164$ 90,193,872$ 21,882,469$ 10,997,023$ 101,079,318$ 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D.Capital Assets (Continued) The City’s depreciation expense was charged to governmental functions as follows: Governmental Activities: General government 74,670$ Public safety 656,346 Public works 4,334,423 Public health 31,110 Culture and recreation 810,779 Planning and development 333,474 Total depreciation 6,240,802$ Business-type Activities: Solid Waste Disposal 853,537$ Water and Sewer 3,333,941 Sanitation 174,722 Golf Course Division 48,215 Total depreciation 4,410,415$ E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2019: Restated Balance Balance Amounts January 1, December 31, Due Within 2019 Additions Deletions 2019 One Year Governmental activities: General obligation bonds 51,968,310$ 11,532,878$ 5,877,280$ 57,623,908$ 4,474,480$ Loans payable 12,185,053 13,963 -12,199,016 - OPEB liability 3,093,240 333,365 304,958 3,121,647 - KPERS OPEB liability 382,848 52,116 85,552 349,412 - Net pension liability 27,918,983 1,049,823 -28,968,806 - Accrued compensation 2,815,485 2,001,057 2,030,465 2,786,077 2,030,465 Temporary notes 18,123,505 11,170,000 18,123,505 11,170,000 11,170,000 Total 116,487,424$ 26,153,202$ 26,421,760$ 116,218,866$ 17,674,945$ Business-type activities: General obligation bonds 5,282,578$ -$1,166,063$ 4,116,515$ 688,388$ Revenue bonds 11,898,051 11,122,175 11,898,051 11,122,175 715,000 Loans payable 10,632,351 12,434,834 527,499 22,539,686 539,863 OPEB liability 394,062 42,469 38,851 397,680 - KPERS OPEB liability 164,078 23,414 30,509 156,983 - Net pension liability 3,114,818 33,308 -3,148,126 - Accrued compensation 669,517 465,674 478,552 656,639 478,552 Total 32,155,455$ 24,121,874$ 14,139,525$ 42,137,804$ 2,421,803$ Component Units: General obligation bonds 21,427,000$ 6,380,000$ 5,382,000$ 22,425,000$ 1,425,000$ Less unamortized discount [64,208]-[46,505][17,703]- Special assessment debt 7,054 -2,249 4,805 2,350 KPERS OPEB obligation 11,126 2,212 - 13,338 - Net pension liability 605,630 27,226 -632,856 - Total component units 21,986,602$ 6,409,438$ 5,337,744$ 23,058,296$ 1,427,350$ 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City’s long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government Original Interest Bonds General Obligation Bonds Issue Rates Outstanding Internal Improvements 2008B, due 7/1/2028 3,525,000$ 3.65% to 5.00% 850,000$ Internal Improvements 2009A, due 10/1/2029 23,695,000 2.00% to 5.00% 663,468 Internal Improvements 2010A, due 10/1/2025 6,916,592 2.00% to 3.875% 332,772 Internal Improvements 2010B, due 10/1/2023 7,973,044 0.50% to 3.00% 1,204,781 Internal Improvements 2011A, due 10/1/2031 6,587,985 2.00% to 5.00% 742,300 Internal Improvements 2012A, due 10/1/2027 2,383,903 1.00% to 2.45% 1,350,082 Refunding 2012B, due 10/1/2020 3,817,108 1.00% to 1.40% 184,014 Internal Improvements 2013A, due 10/1/28 1,369,380 3.00% to 4.00% 910,630 Internal Improvements 2013B, due 10/1/33 4,485,073 0.60% to 3.65% 3,028,550 Internal Improvements 2014A, due 10/1/34 7,839,050 2.50% to 3.75% 4,801,789 Improvement and Refunding 2015A, due 10/1/35 7,157,688 2.00% to 4.00% 5,781,152 Internal Improvements 2016A, due 10/1/36 6,681,766 2.00% to 3.00% 5,880,002 Refunding 2016B, due 10/1/2031 15,141,004 2.00% to 5.00% 13,622,290 Internal Improvements 2017A, due 10/1/37 9,388,370 3.00% to 3.375% 8,815,534 Internal Improvements 2018A, due 10/1/33 2,090,000 3.15% to 4.00% 2,040,180 Internal Improvements 2019A, due 10/1/39 11,090,000 3.00% to 4.00% 11,532,878 Total general obligation bonds 61,740,422$ Revenue Bonds Revenue & Refunding 2019, due 10/1/31 11,122,175$ 3.00% 11,122,175$ Total revenue bonds 11,122,175$ Temporary Notes Series 2019-1, due 5/1/20 6,085,000$ 1.58% 6,085,000$ Series 2019-2, due 7/1/20 5,085,000 2.07% 5,085,000 Total temporary notes 11,170,000$ Loans Payable Kansas Public Water Supply, due 8/1/34 9,330,000$ 2.12% 6,411,458$ Kansas Public Water Supply, due 8/1/35 4,250,000 2.78% 3,693,394 Kansas Public Water Supply, due 2/1/40 32,000,000 2.33% 10,396,098 Kansas Public Water Supply, due 2/1/40 4,250,000 2.33% 1,933,592 Kansas Water Pollution Control, due 3/1/35 2,250,000 2.54% 105,145 Dakotas & CNMC Notes, due 12/10/50 12,640,000 1.58% 12,199,016 Total loans payable 34,738,703$ 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Original Interest Bonds Issue Rates Outstanding Component Unit Salina Airport Authority General Obligation Debt General Obligation 2015A, due 2025 3,075,000$ 2.67% 1,180,000$ General Obligation 2017A, due 2030 10,255,000 3.04% 10,080,000 General Obligation 2017B, due 2025 4,835,000 3.02% 4,785,000 General Obligation 2019A, due 2029 675,000 2.78% 675,000 General Obligation 2019B, due 2023 3,455,000 2.92% 3,455,000 General Obligation Temporary Notes 2019-1, due 2021 2,250,000 2.50% 2,250,000 Less unamortized bond premium 28,069 Less unamortized bond discount [45,772] Total general obligation bonds 22,407,297 Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 27,599 4.47%4,805 Total special assessment debt 4,805 Total 22,412,102$ Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: Bonds Interest Year Outstanding Due Total 2020 5,162,867$ 1,997,278$ 7,160,145$ 2021 5,057,615 1,692,386 6,750,001 2022 5,156,464 1,522,892 6,679,356 2023 5,016,465 1,330,541 6,347,006 2024 4,642,769 1,141,818 5,784,587 2025-2029 18,285,702 4,074,605 22,360,307 2030-2034 12,178,959 1,985,377 14,164,336 2035-2037 6,239,581 468,338 6,707,919 Total 61,740,422$ 14,213,235$ 75,953,657$ General Obligation - Primary Government 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Bonds Interest Year Outstanding Due Total 2020 1,425,000$ 662,126$ 2,087,126$ 2021 3,730,000 605,838 4,335,838 2022 1,525,000 508,668 2,033,668 2023 1,565,000 467,940 2,032,940 2024 1,615,000 424,235 2,039,235 2025 - 2029 8,805,000 1,410,175 10,215,175 2030 - 2031 3,760,000 174,475 3,934,475 Total 22,425,000$ 4,253,457$ 26,678,457$ General Obligation - Component Units Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Bonds Interest Year Outstanding Due Total 2020 781,015$ 327,117$ 1,108,132$ 2021 816,015 288,450 1,104,465 2022 841,015 265,950 1,106,965 2023 861,015 242,700 1,103,715 2024 886,015 218,850 1,104,865 2025-2029 4,820,072 710,100 5,530,172 2030-2031 2,117,028 89,700 2,206,728 Total 11,122,175$ 2,142,867$ 13,265,042$ Revenue Bonds - Primary Government Annual debt service requirements to maturity for temporary notes - to be paid through the issuance of general obligation bonds: Notes Interest Year Outstanding Due Total 2020 11,170,000$ 172,417$ 11,342,417$ Total 11,170,000$ 172,417$ 11,342,417$ Temporary Notes - Primary Government 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Kansas Public Water Supply Loans.The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Loans Interest Year Outstanding Due Total 2020 539,863$ 235,471$ 775,334 2021 552,523 222,811 775,334 2022 565,483 209,851 775,334 2023 578,754 196,580 775,334 2024 592,341 182,993 775,334 2025-2029 3,177,162 699,508 3,876,670 2030-2034 3,569,051 307,625 3,876,676 2035 529,675 18,533 548,208 Total 10,104,852$ 2,073,372$ 12,178,224$ Kansas Water Supply Loans - Primary Government During 2019, the City entered into additional loans with the Kansas Public Water Supply Fund and the Kansas Water Pollution Control Fund. The water supply loans allow the City to borrow up to $36,170,000 with a gross interest rate of 2.33%. The water pollution control loan allows the City to borrow up to $2,250,000 with a gross interest rate of 2.54%. Amortization schedules for the loans are not yet available since the loans have not been fully finalized. The purpose of the loans are to finance various water and sewer infrastructure projects throughout the City. Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $6,016,500. Dakotas Note B - On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,623,500. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) CNMC Note A - On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,674,000. CNMC Note B - On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $1,326,000. As of December 31, 2019, the principal balance of these four loans, net of $440,984 of unamortized debt issuance costs, was $12,199,016. Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Assessment Interest Year Outstanding Due Total 2020 2,350$ 215$2,565$ 2021 2,455 110 2,565 Total 4,805$ 325$5,130$ Special Assessment Debt - Component Units 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease.On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2019, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2019, rental income of $87,368 remained receivable from the City. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2019: 2020 130,000$ 2021 130,000 2022 130,000 2023 162,500 2024 227,500 2025-2029 2,827,500 2030-2034 3,250,000 2035-2039 3,250,000 2040-2044 3,250,000 2045-2046 975,000 14,332,500$ Ground Lease.On October 24, 2018, SFH QalicB entered into a lease agreement with Salina Regional Medical Education, LLC for the use of property for parking of passenger vehicles and non-commercial trucks (the Parking Lot) by the public. SFH QalicB will have the option to acquire the Parking Lot for $1 upon the end of the lease term, which is 100 years, as defined in the Ground Lease. A one-time basic rent payment of $250,000 was due on the commencement date. There are no additional minimum lease payments due. Sales tax and Revenue (STAR) Bonds.STAR Bonds are authorized to be issued pursuant to K.S.A. 12-17, 160, et seq., as amended (the STAR Bond Act). The STAR Bond Act provides a form of tax increment financing that enables the issuance of bonds payable from certain State and local sales and compensating use tax revenues and transient guest tax revenues generated from STAR bond projects constructed within a STAR bond project district. To implement STAR bond financing, a local government must adopt a resolution that specifies a proposed STAR bond project district’s boundary and describes the overall district plan, hold a public hearing on the district and plan, and pass a resolution that establishes the STAR bond project district. Additionally, there may be one or more projects within a STAR bond district. In accordance with the STAR Bond Act, the City has no liability for payment of bonds in the event that revenues received from sources noted above are inadequate to pay the debt incurred with the issuance of the STAR bonds. 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) In connection with the issuance of STAR bonds, the City of Salina and the State of Kansas enter into a Tax Distribution Agreement. The agreement provides that the principal of, accreted value, and interest on the STAR bonds will be paid proportionally by the City of Salina and the State of Kansas, based on each entity’s respective share of sales taxes generated within the district. These proportional shares may change in the future if the sales taxes assessed by the local or state governments are modified. On June 1, 2015, the City of Salina Commission adopted Ordinance 15-10776 establishing the district known as the Salina STAR Bond Project District. On August 22, 2016, the City held a public hearing and approved Ordinance 16-10856 adopting the STAR Bond Project Plan. On December 1, 2018, the City of Salina issued $18,250,000 in Senior Special Obligation Revenue Bonds (Series 2018-A) and $4,320,000 in Subordinate Special Obligation Revenue Bonds (Series 2018-B). As of December 31, 2019, the outstanding balances for the 2018-A and 2018-B were $18,250,000 and $4,320,000, respectively. F. Operating Leases On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City’s share of the lease agreement is 40% and will pay the lessor $1,100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2019. The future minimum lease payments for the lease are as follows: Year Amount 2020 93,926$ 2021 93,926 2022 93,926 2023 93,926 2024 93,926 2025-2027 281,779 Total principal and interest 751,409 Less: interest [95,149] Total principal 656,260$ G. Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General 6,449,500$ 897,748$ Tourism and Convention -848,873 Special Gas 160,000 - Sales Tax Capital -3,326,350 Debt Service 1,632,958 Other governmental funds 1,472,013 - Solid Waste Disposal -640,000 Water and Sewer -3,650,000 Sanitation -491,500 Central Garage 140,000 - Total transfers 9,854,471$ 9,854,471$ The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: o State/School employees o Local employees Police and Firemen Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member’s combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member’s lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 74-4921. All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2019. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Actuarial Statutory Employer Employer Rate Capped Rate Local employees 8.89% 8.89% Police and Firemen 22.13% 22.13% Member contribution rates as a percentage of eligible compensation for the fiscal year 2019 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: State/School Local Police and Firemen Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City’s share of the collective pension amounts as of December 31, 2019, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31, 2019. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2019, the City’s proportion for the Local employees group was 0.796%, which was an increase of .006% from its proportion measured at June 30, 2018. At June 30, 2019, the City’s proportion for the Police and Firemen group was 2.074%, which was a decrease of .007% from its proportion measured at June 30, 2018. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2019 and 2018, the City and its component units reported a liability of $32,116,932 and $31,984,657, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31, 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return Global Equity 47.00% 6.85% Fixed Income 13.00% 1.25% Yield driven 8.00% 6.55% Real Return 11.00% 1.71% Real estate 11.00% 5.05% Alternatives 8.00% 9.85% Short-term investments 2.00%-0.25% 100.00% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System’s Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate. The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%) than the current rate: 1% Decrease (6.75%)Discount Rate (7.75%)1% Increase (8.75%) Local 16,612,600$ 11,123,112$ 6,531,254$ Police & Firemen 29,791,754 20,993,820 13,628,262 Total 46,404,354$ 32,116,932$ 20,159,516$ Pension Expense. For the year ended December 31, 2019, the City recognized Local pension expense of $1,370,234 and Police and Firemen pension expense of $3,483,665, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority’s and Salina Airport Authority’s portion of the Local pension expense were $25,451 and $73,753, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 24,348$ 280,127$ Net differences between projected and actual earnings on investments 261,693 - Changes in assumptions 339,963 22,545 Changes in proportion 377,752 267,857 Total 1,003,756$ 570,529$ Deferred outflows Deferred inflows Police & Firemen of resources of resources Differences between actual and expected experience 1,186,018$ 38,909$ Net differences between projected and actual earnings on investments 422,552 - Changes in assumptions 743,686 23,244 Changes in proportion 36,289 792,896 Total 2,388,545$ 855,049$ 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2019, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Deferred outflows Deferred inflows Local of resources of resources of resources of resources Differences between actual and expected experience 1,198$ 9,400$ 1,385$ 15,938$ Net differences between projected and actual earnings on investments 7,761 - 14,889 - Changes in assumptions 14,366 1,598 19,342 1,283 Changes in proportion 1,145 4,793 59,996 19,497 Total 24,470$ 15,791$ 95,612$ 36,718$ Airport AuthorityHousing Authority $1,933,992 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2019 292,771$ 813,535$ 1,106,306$ 2020 [13,048] 196,519 183,471 2021 80,992 294,428 375,420 2022 73,350 221,173 294,523 2023 [838] 7,841 7,003 Total 433,227$ 1,533,496$ 1,966,723$ $37,624 and $36,310 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2020 9,773$ 22,167$ 31,940$ 2021 5,754 8,732 14,486 2022 [6,147] 17,687 11,540 2023 [609] 9,959 9,350 2024 [92] 349 257 Total 8,679$ 58,894$ 67,573$ 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers’ compensation. The program covers all City employees. Premiums are paid into the Workers’ Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $159,754 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2019 2018 Unpaid claims, January 1 238,778$ 221,913$ Incurred claims (including IBNRs)726,271 886,086 Claim payments [653,477] [869,221] Unpaid claims, December 31 311,572$ 238,778$ The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) 2019 2018 Unpaid claims, January 1 380,980$ 395,691$ Incurred claims (including IBNRs)4,466,044 3,670,930 Claim payments [4,357,606][3,685,641] Unpaid claims, December 31 489,418$ 380,980$ E.Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2019. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the Solid Waste Fund in each period based on landfill capacity used as of each balance sheet date. The $2,048,896 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2019. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2019. Project Authorization Expenditures Markley-Magnolia VV Sewer 5,150,000$ 439,661$ Bicentennial Center Improvements 10,200,000 12,433,918 Water Well 13 & 14 Maintenance 52,184 50,830 Community Fieldhouse (1)10,950,000 9,188,840 Community Fieldhouse (2)750,000 733,992 North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 Rebuild High Service Pump P-203 24,187 13,688 Pump Stations and Force Mains 1,483,000 1,425,505 2017 Country Club Road Improvements 1,200,000 1,089,063 River Trail 2 956,072 11,312 Downtown Streetscape 12,165,000 11,298,360 Smoky Hill River Renewal 27,000,000 3,467,058 Water Mains 4,250,000 2,319,841 Downtown Santa Fe Water Main Replacement 1,351,100 1,258,672 Police Training Facility 4,900,000 1,398,225 Rehab Pump St 28,29/Repl 28 Face Main 550,000 - Northbound 9th Street Bridge 103,768 95,358 Landfill Cell #20 Design 2,200,000 1,959,983 Railroad Crossing Improvements 45,000 - 2018 Park Improvements 194,000 87,000 FH Parking Lot 55,930 2,320 Pheasant Ridge Addition #3 Phase 2 509,233 446,916 Manhole & Valve Adj 10,000 17,806 Community Theater HVAC Replacement 46,000 207 Storm Sewer Mulberry Street 22,709 21,528 9th Street Crawford to Walnut 646,896 643,555 2019 Pavement Sealing 295,937 295,937 Dean Evans Drainage 60,000 315 2019 Sidewalk Improvements 24,965 24,648 2019 Traffic Signal Improvements 35,758 35,758 2019 Mill and Inlay 1,853,546 1,531,098 2019 Microsurfacing 693,462 681,555 2019 Chip and Seal 140,000 131,733 N.9th Street Bridge 2,000,000 3,546 Golf Course Irrigation 1,488,414 1,321,171 Police Parking Lot 400,000 200,995 2019 Sidewalk Abatement 21,625 - Fair Housing 38,750 - 9th South Addition 1,180,313 2,976 Smoky Hill Greenway Trail 435,637 49,389 Chorine Building 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 - Magnolia Hills Estates II 1,575,240 10,958 Stone Lake Phase 2 670,166 2,207 Stone Lake Phase 3A 1,647,053 3,007 Smedley Surgical Center 45,486 1,961 Sound Garden Oakdale Park 10,046 10,046 Wheatland Valley -Specials 5,474,790 6,500 Park Shelter Roof Replacement 93,816 - LED Lighting Replacement - Parks 18,223 - 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30- year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities’ CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count III Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts III and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third-party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0-CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed on or about June 18, 2018. The Feasibility Study portion of the CAFO scope of work was completed on or about November 29, 2018. KDHE’s draft final Corrective Action Decision (CAD) was published on or about April 8, 2019. KDHE held a public hearing for the final CAD on or about May 1, 2019. Final comments concerning the draft final CAD were due on or about May 8, 2019. KDHE published a final CAD on or about July 29, 2019. The KDHE CAD details the scope of work and estimated cost for the cleanup of DoD-caused contamination at the former Schilling AFB. 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) The Salina Public Entities participated in three mediation sessions with the U.S. Department of Justice (DOJ) and the U.S. Army Corps of Engineers (USACE) on November 19-21, 2019; December 10-11, 2019; and the final subsequent to year-end to determine payment by the United States in exchange for performance by the Salina Public Entities of the KDHE CAD. Special environmental legal counsel for the Salina Public Entities has negotiated with the DOJ for the completion of a Consent Decree that embodies the results of the three mediation sessions. The final draft of the Consent Decree will be considered by the Salina Public Entities in a joint meeting scheduled for June 24, 2020. Upon approval by the U.S. District Court for the District of Kansas, the CD will provide the Salina Public Entities funding from the United States for the Remedial Design (RD) and Remedial Action (RA) work detailed in the KDHE CAD. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the City intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the City has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Other Postemployment Healthcare Benefits Plan Description. The City offers postemployment health insurance to retirement employees. The benefits are provided through a single employer defined benefit postemployment healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. In 2019, the City did not contribute to the plan. At December 31, 2019, the following employees were covered by the benefit terms: Active employees 441 Retirees and covered spouses 32 Total 473 The total OPEB liability of $3,519,327 was measured as of December 31, 2018 and was determined by an actuarial valuation as of that date. The total OPEB liability in the December 31, 2017 actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date December 31, 2017 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.75% Salary increases 3.50% Discount rate 4.10% Healthcare cost trend rates Medical & Pharmacy: 6.20% for 2018, decreasing 0.60% per year to an ultimate rate of 5% for 2030 and through 2040 Dental: 5.00% to 2020, then drop to 4.90% in 2030 then back to 5.00% in 2040 Retiree's share of benefit related costs 100% of the premium 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2017. Changes in the total OPEB liability are as follows: Balance 1/1/2019 3,487,302$ Service cost 249,957 Interest 125,877 Benefit paid [157,465] Changes in assumptions [186,344] Balance 12/31/2019 3,519,327$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.44%) or one percentage point higher (4.44%) than the current discount rate: 1% Decrease Discount Rate 1% increase (3.10%)(4.10%)(5.10%) Total OPEB Liability 3,805,079$ 3,519,327$ 3,253,600$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.8% decreasing to 3.1%) or one percentage point higher (7.8% decreasing to 5.1%) than the current healthcare cost trend rate: Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability 3,092,948$ 3,519,327$ 4,027,376$ For the year ended December 31, 2019, the City recognized OPEB expense of $364,903. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows of resources of resources Changes of assumptions 70,090$ [164,999]$ Total 70,090$ [164,999]$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) Deferred Year ended [Inflows] Outflows June 30,Amount 2020 [10,931]$ 2021 [10,931] 2022 [10,931] 2023 [10,931] 2024 [10,931] 2025+[40,254] Total [94,909]$ J.Other Postemployment Benefits (KPERS) Plan Description. The City participates in a multiple-employer defined benefit other postemployment benefit (OPEB) plan (the Plan) which is administered by the Kansas Public Employees Retirement System (KPERS). The Plan provides long-term disability benefits and a life insurance benefit for disabled members to KPERS members, as provided by K.S.A. 74-04927. The Plan is administered through a trust held by KPERS that is funded to pay annual benefit payments. However, because the trust’s assets are used to pay employee benefits other than OPEB, the trust does not meet the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Accordingly, the Plan is considered to be administered on a pay-as-you-go basis. Benefits. Benefits are established by statute and may be amended by the KPERS Board of Trustees. The Plan provides long-term disability benefits equal to 60 percent (prior to January 1, 2006, 66 2/3 percent) of annual compensation, offset by other benefits. Members receiving long-term disability benefits also receive credit towards their KPERS retirement benefits and have their group life insurance coverage continued under the waiver of premium provision. The monthly long-term disability benefit is 60 percent of the member’s monthly compensation, with a minimum of $100 and a maximum of $5,000. The monthly benefit is subject to reduction by deductible sources of income, which include Social Security primary disability or retirement benefits, workers compensation benefits, other disability benefits from any other sources by reason of employment, and earnings from any form of employment. If the disability begins before age 60, benefits are payable while the disability continues until the member’s 65th birthday or retirement date, whichever occurs first. If the disability begins after age 60, benefits are payable while the disability continues, for a period of five years or until the member retires, whichever occurs first. Benefit payments for disabilities caused or contributed to by substance abuse or non-biologically based mental illnesses are limited to the shorter of the term of the disability or 24 months per lifetime. The death benefit paid to beneficiaries of disabled members is 150% of the greater of 1) the member’s annual rate of compensation at the time of disability, or 2) the members previous 12 months of compensation at the time of the last date on payroll. If the member has been disabled for five or more years, the annual compensation or salary rate at the time of death will be indexed using the consumer price index, less one percentage point, to compute the death benefit. If a member is diagnosed as terminally ill with a life expectancy of 12 months or less, the member may be eligible to receive up to 100% of the death benefit rather than having the benefit paid to the beneficiary. If a member retires or disability benefits end, the member may convert the group life insurance coverage to an individual insurance policy. Employees covered by benefit terms.At June 30, 2019, the valuation date, the following employees were covered by the benefit terms: 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Active employees 282 Disabled members 2 Total 284 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $527,919 as of December 31, 2019, was measured as of June 30, 2019, and was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Valuation date December 31, 2018 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index)3.50% The discount rate was based on the bond buyer general obligation 20-bond municipal index. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2019. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period of January 1, 2013 through December 31, 2015. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2018 KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance 1/1/2019 546,926$8,886$ 11,126$ 566,938$ Service cost 52,863 1,507 2,843 57,213 Interest 22,667 372 541 23,580 Effect of economic/demographic gains or losses [95,243] [2,512][1,324][99,079] Changes in assumptions 7,614 [67]152 7,699 Benefit payments [28,432] --[28,432] Balance 12/31/2019 506,395$8,186$ 13,338$ 527,919$ Total KPERS OPEB Liability Sensitivity of the total KPERS OPEB liability to changes in the discount rate.The following presented the total KPERS OPEB liability of the City, as well as what the City’s total KPERS OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87%) or 1-percentage-point higher (4.87%) than the current discount rate: 1% Decrease Discount Rate 1% increase (2.50%)(3.50%)(4.50%) Total OPEB Liability - City 526,498$ 506,395$ 485,611$ Total OPEB Liability - Housing Authority 8,394$ 8,186$ 7,941$ Total OPEB Liability - Airport Authority 13,693$ 13,338$ 12,901$ 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Sensitivity of the total KPERS OPEB liability to changes in the healthcare cost trend rates. The following presented the total KPERS OPEB liability of the City calculated using the current healthcare cost trend rates as well as what the City’s total KPERS OPEB liability would be if it were calculated using trend rates that are 1 percentage point lower or 1 percentage point higher than the current trend rates. The reader should note that healthcare trend rates do not affect the liabilities related to the long-term disability benefits sponsored by KPERS, but this exhibit is provided as it is a required disclosure under GASB 75. Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability - City 506,395$ 506,395$ 506,395$ Total OPEB Liability - Housing Authority 8,186$ 8,186$ 8,186$ Total OPEB Liability - Airport Authority 11,395$ 1,126$ 10,800$ For the year ended June 30, 2018, the City recognized OPEB expense of $75,561. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Housing Authority Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Inflows of Inflows of Inflows of Resources Resources Resources Resources Resources Differences between expected and actual experience 59,657$ 85,454$ 2,253$ -$ 4,521$ Changes of assumptions 6,831 11,633 223 136 173 Total 66,488$ 97,087$ 2,476$ 136$ 4,694$ Airport AuthorityCity $72,729 and $4,294 reported as deferred outflows of resources related to OPEB resulting from City and Airport Authority contributions subsequent to the measurement date, respectively, will be recognized as a reduction of the OPEB liability in the year ended December 31, 2019. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2020 [2,886]$ [287]$ [578]$ 2021 [2,886] [287][578] 2022 [2,886] [287][578] 2023 [2,886] [287][578] 2024 [2,886] [287][578] Thereafter [16,169][1,041] [1,668] Total [30,599]$[2,476]$ [4,558]$ 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements In 2019, the City of Salina participated in real property tax abatements for five local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start- ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Company Start End %2019 Tax Abated Salina Vortex Corp (facility improvements) 2015 2024 75% $ 14,369 Great Plains Mfg (facility improvements) 2014 2023 100% 2,744 Veris Technologies (facility addition/improvements) 2015 2024 40.5% 1,755 Twin Oaks (facility addition/improvements) 2015 2024 55% 2,565 Salina Field House (facility) 2017 2026 100% 81,376 Total 102,808$ Ad Valorem Property Tax Abatements Abatement Tax Increment Financing (TIF).TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Reimbursements District Purpose Base Year Expires Sales Tax Property Tax Lambertz Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and private infrastructure 2007 2027 $268,905 $215,999 Total $268,905 $215,999 TIF Project Plans Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Name Rate Start Expires Purpose 2019 Eligible Reimbursement Amount South 9th Street 2.00% 3/1/2016 12/31/2037 Assist with improvements to hotel and conference center $251,052 Total $251,052 Community Improvement District (CID) Neighborhood Revitalization Areas (NRA).NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4-year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 69 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Property/Business Name Address Type Rebate Paid Serio Guzman 241 N. Front Street Res 111$ Christina Litwiller 148 N. 12th Street Res 72 Jeremy Cessna 219 N. Front Street Res 77 William & Mary Warhurst 714 Park Street Res 15 Holly Fain 204 Forest Avenue Res 110 Arlene Cox 200 Forest Avenue Res 110 Gloria Williams 903 N. 10th Street Res 80 Michelle Rogan 240 S. Clark Street Res 96 Samuel A. Rock 1329 N. 4th Street Res 16 Jessica A. Ziegler 221 N. 2nd Street Res 109 Devin or Jessica Know 207 N. Penn Res 156 Ravey Investments LLC 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Com 581 Lamont Outland 1206 N. 7th Street Res 93 Michelle Bunch 634 N. 8th Street Res 91 Jermaine and Tykea Polk 226 N. 2nd Street Res 116 Mary Marshall 937 N. 3rd Street Res 86 Angela Fishburn 1219 N. 8th Street Res 87 Kress Building LLC 134 S. Santa Fe Ave Com 411 Heritage at Hawthorne Partners, LL715 N. 9th Street Com 1,527 Will & Mary Warhurst 809 W. Ash Res 121 Donnie & Ramona Marrs 2035 E. Iron #300R Res 859 TJTM, Inc. 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001R/002R/003R/004R/005R Res 5,359 Troy Valcil 853 Navaho Res 62 Michelle Malone 815 N. 2nd Street Res 2 Timothy & Linda Rickman 719 E. Ash Res 140 Yvette Gelinas 1115 N. 8th Street Res 90 Charles H Carroll Jr Trust 156-158 S. Santa Fe Com 4,149 Pestinger Enterprises LLC 2035 E. Iron Avenue, Unit #306R Res 1,300 Latisha Pierce 705 N. 2nd Street Res 251 Tanya Shiehzadeh 703 N. 2nd Street Res 208 Robert & Brenda Burns 1205 N. 4th Street Res 160 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Com 1,284 Phill Hemmer 2035 E. Iron Avenue, Unit #203R Res 1,615 AP Property Holdings, LLC 201 E. Iron Avenue Com 9,578 Gregory Davis 156-158 N. 11th Street Res 519 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 1,174 Traniesh Byrd 701 N. 2nd Street Res 178 Mark Martin Living Trust 2035 E. Iron #104R Com 818 AKKJ, LLC 2035 E Iron #304R Res 835 Kevin & Rebecca Poland 601 Johnstown Res 36 Jana Endsley 1321 N. 3rd Street Res 177 Kanesha Samilton 214 W. Grand Avenue Res 227 Maria E Padilla 810 N. 5th Street Res 280 Kansas Property Investors, LLC, 230 S. Broadway Blvd Com 1,400 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 1,981 Alan and Nancy Franzen 1413 Arapahoe Res 184 Brandon Sears 900 N. 12th Street Res 22 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 2,231 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,352 Heritage at Hawthorne Partners II, LLC.715 N. 9th Street, Phase II Com 1,750 Christopher Helmer 619 N. 5th Street Com 762 Christopher Helmer 545 N. 12th Street Res 203 Total 44,248$ Neighborhood Revitalization Act (NRA) 70 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) L. Subsequent Events On April 29, 2020, the City issued Series 2020-A general obligation internal improvement bonds in the amounts of $5,210,000. Proceeds from the bonds will be used to provide long-term financing for a portion of the costs of certain public improvements within the City and to retire a portion of the City’s outstanding general obligation temporary notes. The City will make the first payment on the bonds on October 1, 2021and the last payment on October 1, 2035. The interest rate on the bonds ranges from 2.00% to 3.00%. Also on April 29, 2020, the City issued Series 2020-1 temporary notes in the amounts of $7,050,000. Proceeds from the notes will be used to finance certain public improvements within the City. The maturity date of the temporary notes is May 1, 2021 and the interest rate on the notes is 1.00%. On January 30, 2020 the World Health Organization declared the Coronavirus outbreak as a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions were taken to help mitigate the spread of the virus, including social-distancing, quarantines and forced closures of certain types of public places and businesses. Management is unable to quantify the financial and other impacts to the City’s financial position but believes a material impact is reasonably possible. 5(48,5('6833/(0(17$5<,1)250$7,21 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 249,957$ 226,762$ Interest 125,877 128,578 Benefit paid [157,465] [265,000] Changes in assumptions [186,344] 90,918 Net change in total OPEB liability 32,025 181,258 Total OPEB liability - beginning 3,487,302 3,306,044 Total OPEB liability - ending 3,519,327$ 3,487,302$ Covered payroll 25,232,129$ 24,740,225$ Total OPEB liability as a percentage of covered-employee payroll 13.95% 14.10% Actuarially determined contribution 157,465$ 265,000$ Actual contribution 157,465$ 265,000$ Contributions as a percentage of covered payroll 0.62% 1.07% * - Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) OTHER POSTEMPLOYMENT BENEFITS - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 52,863$ 52,380$ Interest 22,667 17,061 Effect of economic/demographic gains or losses [95,243] 75,173 Effect of assumptions changes or inputs 7,614 [6,574] Benefit payments [28,432][30,368] Net change in total OPEB liability [40,531] 107,672 Total OPEB liability - beginning 546,926 439,254 Total OPEB liability - ending 506,395$ 546,926$ Covered payroll 13,991,543$ 13,652,194$ Total OPEB liability as a percentage of covered-employee payroll 3.62% 4.01% Actuarially determined contribution 147,114$ 109,466$ Actual contribution 147,114$ 109,466$ Contributions as a percentage of covered payroll 1.05% 0.80% 73 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) KPERS PENSION PLAN Schedule of the City’s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 City's proportion of the net pension liability 0.764% 2.258% 0.761% 2.180%0.811% 2.191% 0.790% 2.081% 0.796% 2.074% City's proportionate share of the net pension liability 10,027,679$ 16,395,794$ 11,770,699$ 20,251,512$ 11,753,246$ 20,546,882$ 11,014,328$ 20,019,473$ 11,123,112$ 20,993,820$ City's covered-employee payroll 12,931,197$ 10,161,866$ 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% 161.35% 88.83% 188.74% 86.75% 193.96% 78.98% 191.74% 77.43% 193.33% Plan fiduciary net position as a percentage of the total pension liability 71.98% 74.60% 68.55% 69.30% 72.15% 70.99% 74.22% 71.53% 75.02% 71.22% *The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Schedule of the City’s Contributions Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 Contractually required contribution 1,256,217$ 2,527,995$ 1,243,711$ 2,361,273$ 1,179,745$ 1,986,933$ 1,205,334$ 2,181,617$ 1,328,915$ 2,497,473$ Contributions in relation to the contractually required contribution 1,256,217 2,527,995 1,243,711 2,361,273 1,179,745 1,986,933 1,205,334 2,181,617 1,328,915 2,497,473 Contribution deficiency [excess] -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ City's covered-employee payroll 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ 14,948,415$ 11,285,465$ Contributions as a percentage of covered employee payroll 9.48% 23.56% 9.18% 22.29% 8.46% 19.03% 8.39% 20.09% 8.89% 22.13% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 74 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund - To account for the activities of the City's convention center. Business improvement district fund - State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund - To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund - To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund - To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund - To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund - To account for 2.34% of the .75 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund – To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund – To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund - To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund - To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund - To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund - To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund - To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund - To account for donations to the D.A.R.E. program. War memorial maintenance fund - To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund - To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund - To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds - To account for revenue and expenses associated with federal Equitable Sharing Program funds. 75 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS - CONTINUED Homeowners’ assistance fund - To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund – To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund – To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. Cemetery endowment fund - To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund - To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund - To account for donations to be used to celebrate the nation's tricentennial in the year 2076. Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds ASSETS Cash and investments 3,371,618$ 527,536$ 962,774$ 4,861,928$ Receivables Accounts 2,012 --2,012 Total assets 3,373,630$ 527,536$ 962,774$ 4,863,940$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 170,244$ -$23,179$ 193,423$ Total liabilities 170,244 -23,179 193,423 Fund balances: Restricted 570,175 - 939,595 1,509,770 Committed 2,487,479 527,536 - 3,015,015 Assigned 145,732 --145,732 Total fund balances 3,203,386 527,536 939,595 4,670,517 Total liabilities and fund balances 3,373,630$ 527,536$ 962,774$ 4,863,940$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2019 See independent auditor's report on the financial statements. 76 Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds REVENUES Taxes 822,506$ -$ -$ 822,506$ Intergovernmental 1,264,173 - 523,392 1,787,565 Charges for services 486,443 8,027 - 494,470 Licenses and permits 4,500 - - 4,500 Investment revenue 9,262 5,343 14,828 29,433 Donations 90,084 - - 90,084 Miscellaneous 43,956 --43,956 Total revenues 2,720,924 13,370 538,220 3,272,514 EXPENDITURES Current Culture and recreation 1,667,994 - - 1,667,994 Public safety 256,444 - - 256,444 Public health and sanitation 303,950 - - 303,950 Planning and development 396,101 - - 396,101 Miscellaneous - 35 - 35 Debt service Principal retirement - - 185,000 185,000 Interest and other charges - - 47,278 47,278 Capital outlay 1,096,882 --1,096,882 Total expenditures 3,721,371 35 232,278 3,953,684 Excess [deficiency] of revenues over [under] expenditures [1,000,447] 13,335 305,942 [681,170] Other financing sources [uses] Transfers in 1,472,014 --1,472,014 Total other financing sources [uses]1,472,014 --1,472,014 Net change in fund balance 471,567 13,335 305,942 790,844 Fund balance - Beginning of year 2,713,491 514,201 633,653 3,861,345 Prior period adjustment 18,328 --18,328 Fund balance - Beginning of year, restated 2,731,819 514,201 633,653 3,879,673 Fund balance - End of year 3,203,386$ 527,536$ 939,595$ 4,670,517$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS See independent auditor's report on the financial statements. 77 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol ASSETS Cash and investments 262,848$ 4,661$ 28,751$ 352,039$ 234$ Receivables Accounts -2,012 --- Total assets 262,848$ 6,673$ 28,751$ 352,039$ 234$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 62,865$ -$-$3,173$-$ Total liabilities 62,865 --3,173 - Fund balance: Restricted - 6,673 - 348,866 234 Committed 199,983 - 28,751 - - Assigned ----- Total fund balance [deficit]199,983 6,673 28,751 348,866 234 Total liabilities and fund balances 262,848$ 6,673$ 28,751$ 352,039$ 234$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2019 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ ------ 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ -$6,147$ -$22,554$ -$71,803$ -6,147 -22,554 -71,803 186,307 ---- - - 708,563 435,642 1,274 6,493 303,573 -----145,732 186,307 708,563 435,642 1,274 6,493 449,305 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ See independent auditor's report on the financial statements. 7 Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations ASSETS Cash and investments 135,189$ 82$-$ 41,125$ 28,571$ Receivables Accounts ----- Total assets 135,189$ 82$-$41,125$28,571$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable -$-$-$-$458$ Total liabilities ----458 Fund balance: Restricted ----- Committed 135,189 82 - 41,125 28,113 Assigned ----- Total fund balance [deficit]135,189 82 -41,125 28,113 Total liabilities and fund balances 135,189$ 82$-$41,125$28,571$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals 30,730$ 50,141$ 26,141$ 99$ 16,845$ 1,954$ 504,120$ 3,371,618$ -------2,012 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ -$377$-$ -$-$-$2,867$ 170,244$ -377 ----2,867 170,244 - - 26,141 - - 1,954 - 570,175 30,730 49,764 - 99 16,845 - 501,253 2,487,479 -------145,732 30,730 49,764 26,141 99 16,845 1,954 501,253 3,203,386 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ See independent auditor's report on the financial statements. 7 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol Revenues Taxes -$-$-$-$-$ Intergovernmental - - - 227,304 227,304 Charges for services - 83,916 - - - Licenses and permits - - 4,500 - - Investment revenue - - - - - Donations - - - - - Miscellaneous ----- Total Revenues -83,916 4,500 227,304 227,304 Expenditures Current Culture and recreation 663,614 - - - - Public safety - - - - - Public health and sanitation - - - - 227,304 Planning and development - 85,201 - - - Capital outlay ---150,959 - Total Expenditures 663,614 85,201 -150,959 227,304 Excess [deficiency] of revenues over [under] expenditures [663,614] [1,285] 4,500 76,345 - Other financing sources [uses] Transfers in 765,916 ---- Total other financing sources [uses] 765,916 ---- Net change in fund balance 102,302 [1,285] 4,500 76,345 - Fund balance, beginning of year 97,681 7,958 24,251 272,521 234 Prior period adjustment ----- Fund balance, beginning of year, restated 97,681 7,958 24,251 272,521 234 Fund balance, end of year 199,983$ 6,673$ 28,751$ 348,866$ 234$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications -$ 344,976$ 234,765$ 242,765$ -$-$ ----351,254 344,954 ----- - ----- - - - 4,688 27 - 4,234 ----- - ---13,411 -- -344,976 239,453 256,203 351,254 349,188 ----- - -----256,444 ----- - - - 41,767 256,176 - - -533,898 --352,774 - -533,898 41,767 256,176 352,774 256,444 -[188,922]197,686 27 [1,520] 92,744 ------ ------ -[188,922]197,686 27 [1,520] 92,744 186,307 897,485 237,956 1,247 8,013 356,561 ------ 186,307 897,485 237,956 1,247 8,013 356,561 186,307$ 708,563$ 435,642$ 1,274$ 6,493$ 449,305$ See independent auditor's report on the financial statements. Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations Revenues Taxes -$ -$-$-$-$ Intergovernmental - - 25,557 37,800 - Charges for services ----- Licenses and permits ----- Investment revenue ----- Donations ----- Miscellaneous ----15,752 Total Revenues --25,557 37,800 15,752 Expenditures Current Culture and recreation - ---- Public safety ----- Public health and sanitation ----- Planning and development - - - - 12,957 Capital outlay 39,910 -19,341 -- Total Expenditures 39,910 -19,341 -12,957 Excess [deficiency] of revenues over [under] expenditures [39,910] -6,216 37,800 2,795 Other financing sources [uses] Transfers in 68,350 ---- Total other financing sources [uses] 68,350 ---- Net change in fund balance 28,440 -6,216 37,800 2,795 Fund balance, beginning of year 106,749 82 [24,544] 3,325 25,318 Prior period adjustment --18,328 -- Fund balance, beginning of year, restated 106,749 82 [6,216] 3,325 25,318 Fund balance, end of year 135,189$ 82$ -$ 41,125$ 28,113$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals -$-$-$-$-$-$-$ 822,506$ - - - - - - 50,000 1,264,173 - 402,527 - - - - - 486,443 --- ----4,500 313 - - - - - - 9,262 - - - - - - 90,084 90,084 -12,163 --2,630 --43,956 313 414,690 --2,630 -140,084 2,720,924 - 1,004,380 - - - - - 1,667,994 - - - - - - - 256,444 - - - - - - 76,646 303,950 - - - - - - - 396,101 -------1,096,882 -1,004,380 ----76,646 3,721,371 313 [589,690] --2,630 -63,438 [1,000,447] -637,748 -----1,472,014 -637,748 -----1,472,014 313 48,058 --2,630 -63,438 471,567 30,417 1,706 26,141 99 14,215 1,954 437,815 2,713,491 -------18,328 30,417 1,706 26,141 99 14,215 1,954 437,815 2,731,819 30,730$ 49,764$ 26,141$ 99$16,845$ 1,954$ 501,253$3,203,386$ See independent auditor's report on the financial statements. Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Total Cash and investments 519,578$ 2,063$ 5,895$ 527,536$ Total assets 519,578$ 2,063$ 5,895$ 527,536$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$-$-$-$ Total liabilities ---- Fund balances Committed 519,578 2,063 5,895 527,536 Total liabilities and fund balances 519,578$ 2,063$ 5,895$ 527,536$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET December 31, 2019 NONMAJOR PERMANENT FUNDS See independent auditor's report on the financial statements. 82 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 8,027$ -$-$ 8,027$ Investment revenue 5,262 21 60 5,343 Total revenues 13,289 21 60 13,370 Expenditures Miscellaneous 35 --35 Total expenditures 35 --35 Net change in fund balance 13,254 21 60 13,335 Fund balances - beginning of year 506,324 2,042 5,835 514,201 Fund balances - end of year 519,578$ 2,063$ 5,895$ 527,536$ NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES See independent auditor's report on the financial statements. 83 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Investment revenue -$10,000$ 10,000$ (10,000)$ Total revenues -10,000 10,000 (10,000) Expenditures Culture and recreation 663,614 725,000 725,000 61,386 Total expenditures 663,614 725,000 725,000 61,386 Excess [deficiency] of revenues over [under] expenditures [663,614][715,000][715,000]51,386 Other financing sources [uses] Transfers in 765,916 754,496 754,496 11,420 Total other financing sources [uses]765,916 754,496 754,496 11,420 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 102,302 39,496 39,496 62,806 Unreserved fund balance, January 1 97,681 27,647 27,647 70,034 Unreserved fund balance/GAAP fund balance December 31 199,983$ 67,143$ 67,143$ 132,840$ Budgeted Amounts See independent auditor's report on the financial statements. 84 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 83,701$ 90,513$ 90,513$ [6,812]$ Investment revenue - 15 15 [15] Total revenues 83,701 90,528 90,528 [6,827] Expenditures Planning and development 85,201 90,500 90,500 5,299 Total expenditures 85,201 90,500 90,500 5,299 Excess [deficiency] of revenues over [under] expenditures [1,500] 28 28 [1,528] Unreserved fund balance, January 1 6,161 13,303 13,303 [7,142] Unreserved fund balance, December 31 4,661 13,331$ 13,331$ [8,670]$ Reconciliation to GAAP Accounts receivable 2,012 GAAP Fund Balance, December 31 6,673$ Budgeted Amounts See independent auditor's report on the financial statements. 85 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) NEIGHBORHOOD PARK FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Licenses and permits 4,500$ 5,500$ 5,500$ [1,000]$ Investment revenue -50 50 [50] Total revenues 4,500 5,550 5,550 [1,050] Expenditures Capital outlay -10,000 10,000 10,000 Total expenditures -10,000 10,000 10,000 Excess [deficiency] of revenues over [under] expenditures 4,500 [4,450] [4,450] 8,950 Unreserved fund balance, January 1 24,251 32,099 32,099 [7,848] Unreserved fund balance/GAAP fund balance December 31 28,751$ 27,649$ 27,649$ 1,102$ Budgeted Amounts See independent auditor's report on the financial statements. 86 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 213,751$ 13,553$ Investment revenue -100 100 [100] Total revenues 227,304 213,851 213,851 13,453 Expenditures Capital outlay 885 259,000 259,000 258,115 Total expenditures 885 259,000 259,000 258,115 Excess [deficiency] of revenues over [under] expenditures 226,419 [45,149] [45,149] 271,568 Unreserved fund balance, January 1 122,447 109,993 109,993 12,454 Unreserved fund balance/GAAP fund balance December 31 348,866$ 64,844$ 64,844$ 284,022$ Budgeted Amounts See independent auditor's report on the financial statements. 87 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 250,000$ [22,696]$ Total revenues 227,304 213,751 250,000 [22,696] Expenditures Public health and sanitation 227,304 213,751 250,000 22,696 Total expenditures 227,304 213,751 250,000 22,696 Excess [deficiency] of revenues over [under] expenditures ---- Unreserved fund balance, January 1 234 164 234 - Unreserved fund balance/GAAP fund balance December 31 234$ 164$ 234$ -$ Budgeted Amounts See independent auditor's report on the financial statements. 88 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes 344,976$ 354,987$ 354,987$ [10,011]$ Investment revenue -2,000 2,000 [2,000] Total revenues 344,976 356,987 356,987 [12,011] Expenditures Capital outlay 533,898 480,000 555,000 21,102 Total expenditures 533,898 480,000 555,000 21,102 Excess [deficiency] of revenues over [under] expenditures [188,922] [123,013] [198,013] 9,091 Unreserved fund balance, January 1 897,485 878,081 897,485 - Unreserved fund balance/GAAP fund balance December 31 708,563$ 755,068$ 699,472$ 9,091$ Budgeted Amounts See independent auditor's report on the financial statements. 89 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 402,527$ 320,400$ 320,400$ 82,127$ Miscellaneous 12,163 99,800 99,800 [87,637] Total revenues 414,690 420,200 420,200 [5,510] Expenditures Culture and recreation 1,004,380 1,066,349 1,066,349 61,969 Total expenditures 1,004,380 1,066,349 1,066,349 61,969 Excess [deficiency] of revenues over [under] expenditures [589,690][646,149][646,149]56,459 Other financing sources [uses] Transfers in 637,748 665,000 665,000 [27,252] Total other financing sources [uses]637,748 665,000 665,000 [27,252] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 48,058 18,851 18,851 29,207 Unreserved fund balance, January 1 1,706 63,793 63,793 [62,087] Unreserved fund balance/GAAP fund balance December 31 49,764$ 82,644$ 82,644$ [32,880]$ Budgeted Amounts See independent auditor's report on the financial statements. 90 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 2,620,653$ 2,850,000$ 2,850,000$ [229,347]$ Delinquent taxes 43,289 55,000 55,000 [11,711] Motor vehicle taxes 305,502 287,142 287,142 18,360 Special assessments 1,540,285 1,710,000 1,710,000 [169,715] Investment revenue - 2,500 2,500 [2,500] Miscellaneous 94,519 --94,519 Total revenues 4,604,248 4,904,642 4,904,642 [300,394] Expenditures Debt Service Principal retirement 5,413,015 5,729,365 5,729,365 316,350 Interest and other charges 1,536,834 1,589,855 1,589,855 53,021 Total expenditures 6,949,849 7,319,220 7,319,220 369,371 Excess [deficiency] of revenues over [under] expenditures [2,345,601] [2,414,578] [2,414,578] 68,977 Other financing sources [uses] Transfers in 1,632,958 2,000,000 2,000,000 [367,042] Total other financing sources [uses]1,632,958 2,000,000 2,000,000 [367,042] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [712,643] [414,578] [414,578] [298,065] Unreserved fund balance, January 1 1,801,968 942,248 942,248 859,720 Unreserved fund balance, December 31 1,089,325 527,670$ 527,670$ 561,655$ Reconciliation to GAAP Taxes receivable 3,105,131 Deferred revenue [3,052,038] GAAP Fund Balance, December 31 1,142,418$ Budgeted Amounts See independent auditor's report on the financial statements. CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,073,363$ 2,369,000$ 2,369,000$ 704,363$ Investment revenue - 4,000 4,000 [4,000] Miscellaneous 416,369 32,000 32,000 384,369 Total revenues 3,489,732 2,405,000 2,405,000 1,084,732 Expenditures Public works 2,405,461 2,471,998 2,471,998 66,537 Total expenditures 2,405,461 2,471,998 2,471,998 66,537 Excess [deficiency] of revenues over [under] expenditures 1,084,271 [66,998] [66,998]1,151,269 Other financing sources [uses] Transfers [out][640,000][125,000] [125,000][515,000] Total other financing sources [uses][640,000][125,000] [125,000][515,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 444,271 [191,998] [191,998] 636,269 Unreserved fund balance, January 1 4,004,416 3,858,116 3,858,116 146,300 Unreserved fund balance, December 31 4,448,687$ 3,666,118$ 3,666,118$ 782,569$ Budgeted Amounts See independent auditor's report on the financial statements. 92 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 20,135,245$ 20,950,319$ 20,950,319$ [815,074]$ Investment revenue - 25,000 25,000 [25,000] Miscellaneous 4,880 10,000 10,000 [5,120] Total revenues 20,140,125 20,985,319 20,985,319 [845,194] Expenditures Public works 10,990,480 15,007,493 15,007,493 4,017,013 Total expenditures 10,990,480 15,007,493 15,007,493 4,017,013 Excess [deficiency] of revenues over [under] expenditures 9,149,645 5,977,826 5,977,826 3,171,819 Other financing sources [uses] Transfers in - 122,200 122,200 [122,200] Transfers [out][7,790,425][6,800,000][6,800,000][990,425] Total other financing sources [uses][7,790,425][6,677,800][6,677,800][1,112,625] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,359,220 [699,974] [699,974] 2,059,194 Unreserved fund balances, January 1 12,283,191 10,134,124 10,134,124 2,149,067 Unreserved fund balances, December 31 13,642,411$ 9,434,150$ 9,434,150$ 4,208,261$ Budgeted Amounts See independent auditor's report on the financial statements. 93 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,228,431$ 3,450,000$ 3,450,000$ [221,569]$ Investment revenue -3,500 3,500 [3,500] Total revenues 3,228,431 3,453,500 3,453,500 [225,069] Expenditures Public works 2,479,468 3,136,223 3,136,223 656,755 Total expenditures 2,479,468 3,136,223 3,136,223 656,755 Excess [deficiency] of revenues over [under] expenditures 748,963 317,277 317,277 431,686 Other financing sources [uses] Transfers [out][491,500][411,500][411,500][80,000] Total other financing sources [uses][491,500][411,500][411,500][80,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 257,463 [94,223] [94,223] 351,686 Unreserved fund balance, January 1 1,468,134 1,695,957 1,695,957 [227,823] Unreserved fund balances, December 31 1,725,597$ 1,601,734$ 1,601,734$ 123,863$ Budgeted Amounts See independent auditor's report on the financial statements. 94 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 809,636$ 845,997$ 845,997$ [36,361]$ Investment revenue - 350 350 [350] Miscellaneous 97,562 120,000 120,000 [22,438] Total revenues 907,198 966,347 966,347 [59,149] Expenditures Recreation 935,700 955,806 955,806 20,106 Total expenditures 935,700 955,806 955,806 20,106 Excess [deficiency] of revenues over [under] expenditures [28,502]10,541 10,541 [39,043] Other financing sources [uses] Transfers [out]---- Total other financing sources [uses]---- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [28,502] 10,541 10,541 [39,043] Unreserved fund balance, January 1 50,211 128,476 128,476 [78,265] Unreserved fund balances, December 31 21,709$ 139,017$ 139,017$ [117,308]$ Budgeted Amounts See independent auditor's report on the financial statements. 95 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 312,852$ 312,933$ 312,933$ [81]$ Investment revenue - 2,500 2,500 [2,500] Miscellaneous 109 3,000 3,000 [2,891] Total revenues 312,961 318,433 318,433 [5,472] Expenditures General government 336,880 430,418 430,418 93,538 Total expenditures 336,880 430,418 430,418 93,538 Excess [deficiency] of revenues over [under] expenditures [23,919] [111,985] [111,985] 88,066 Unreserved fund balance, January 1 1,086,849 761,583 761,583 325,266 Unreserved fund balances, December 31 1,062,930$ 649,598$ 649,598$ 413,332$ Budgeted Amounts See independent auditor's report on the financial statements. 96 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) HEALTH INSURANCE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 6,055,450$ 7,523,584$ 6,200,000$ [144,550]$ Investment revenue - 5,000 - - Miscellaneous 49,526 25,000 -49,526 Total revenues 6,104,976 7,553,584 6,200,000 [95,024] Expenditures General government 7,028,930 6,747,554 7,050,550 21,620 Total expenditures 7,028,930 6,747,554 7,050,550 21,620 Excess [deficiency] of revenues over [under] expenditures [923,954] 806,030 [850,550] [73,404] Unreserved fund balance, January 1 3,112,407 761,583 3,112,407 - Unreserved fund balances, December 31 2,188,453$ 1,567,613$ 2,261,857$ [73,404]$ Budgeted Amounts See independent auditor's report on the financial statements. 97 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 1,430,533$ -$-$ 1,430,533$ Investment revenue - 40 40 [40] Miscellaneous 3,997 7,500 7,500 [3,503] Total revenues 1,434,530 7,540 7,540 1,426,990 Expenditures General government 1,474,000 1,564,012 1,564,012 90,012 Total expenditures 1,474,000 1,564,012 1,564,012 90,012 Excess [deficiency] of revenues over [under] expenditures [39,470][1,556,472][1,556,472]1,517,002 Other financing sources [uses] Transfers in 140,000 1,633,644 1,633,644 [1,493,644] Total other financing sources [uses]140,000 1,633,644 1,633,644 [1,493,644] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 100,530 77,172 77,172 23,358 Unreserved fund balance, January 1 54,128 1,130,194 1,130,194 [1,076,066] Unreserved fund balance, December 31 154,658$ 1,207,366$ 1,207,366$ [1,052,708]$ Budgeted Amounts See independent auditor's report on the financial statements. 98 99 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund - To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund - To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund - To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. Total Workers' Internal Compensation Health Central Service ASSETS Reserve Insurance Garage Funds Current assets: Cash and investments 1,063,855$ 2,188,454$ 200,144$ 3,452,453$ Inventory and prepaid supplies --127,892 127,892 Total current assets 1,063,855 2,188,454 328,036 3,580,345 Capital assets: Capital assets - - 168,234 168,234 Less: accumulated depreciation --153,601 153,601 Total capital assets --14,633 14,633 Total assets 1,063,855 2,188,454 342,669 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources - - 2,832 2,832 Pension deferred outflows of resources --22,769 22,769 Total deferred outflows of resources --25,601 25,601 Total assets and deferred outflows of resources 1,063,855$ 2,188,454$368,270$3,620,579$ Liabilities: Current liabilities (payable from current assets): Accounts payable 925$ -$ 45,485$ 46,410$ Current portion of compensated absences payable - - 22,917 22,917 Current portion of accrued claims payable 159,754 489,418 -649,172 Total current liabilities (payable from current assets)160,679 489,418 68,402 718,499 Noncurrent liabilities: Compensated absences payable - - 8,529 8,529 Accrued claims payable 151,818 - - 151,818 Net KPERS OPEB obligation - - 10,128 10,128 Net pension liability --156,268 156,268 Total noncurrent liabilities 151,818 -174,925 326,743 Total liabilities 312,497 489,418 243,327 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources - - 1,942 1,942 Pension deferred inflows of resources --7,667 7,667 Total deferred inflows of resources --9,609 9,609 Total liabilities and deferred inflows of resources 312,497$ 489,418$ 252,936$1,054,851$ Net Position Invested in capital assets, net of related debt -$-$ 14,633$ 14,633$ Unrestricted 751,358 1,699,036 100,701 2,551,095 Total net position 751,358$ 1,699,036$115,334$2,565,728$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2019 See independent auditor's report on the financial statements. 100 Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Operating revenues Charges for services 312,852$ 6,055,450$ 1,430,533$ 7,798,835$ Miscellaneous 109 49,526 10,668 60,303 Total operating revenues 312,961 6,104,976 1,441,201 7,859,138 Operating expenses General government 409,674 7,137,367 1,435,290 8,982,331 Depreciation --7,699 7,699 Total operating expenses 409,674 7,137,367 1,442,989 8,990,030 Operating income [loss][96,713] [1,032,391][1,788] [1,130,892] Nonoperating revenues [expenses] Investment revenue - - - - Total other operating revenues [expenses]- - - - Income [loss] before transfers [96,713] [1,032,391][1,788] [1,130,892] Transfers from [to] other funds Transfers in - - 140,000 140,000 Total transfers --140,000 140,000 Change in net position [96,713] [1,032,391] 138,212 [990,892] Net position, January 1 848,071 2,731,427 [22,878] 3,556,620 Net position, December 31 751,358$ 1,699,036$ 115,334$ 2,565,728$ COMBINING STATEMENT OF REVENUES, EXPENSES INTERNAL SERVICE FUND CITY OF SALINA, KANSAS For the Year Ended December 31, 2019 AND CHANGES IN NET POSITION See independent auditor's report on the financial statements. 101 Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Cash flows from operating activities Cash received from customers and users 385,646$ 6,163,888$ 1,430,533$ 7,980,067$ Cash paid to suppliers of goods or services [409,516] [7,137,367] [1,187,563] [8,734,446] Cash paid to employees - - [288,556] [288,556] Other operating receipts 109 49,526 10,668 60,303 Net cash provided by [used in] operating activities [23,761] [923,953] [34,918] [982,632] Cash flows from investing activities Interest received ---- Cash flows from noncapital financing activities Transfers in --140,000 140,000 Net cash provided by [used in] noncapital financing activities --140,000 140,000 Net increase [decrease] in cash and cash equivalents [23,761] [923,953] 105,082 [842,632] Cash and cash equivalents, January 1 1,087,616 3,112,407 95,062 4,295,085 Cash and cash equivalents, December 31 1,063,855$ 2,188,454$200,144$ 3,452,453$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] [96,713]$ [1,032,391]$ [1,788]$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense - - 7,699 7,699 [Increase] decrease in inventory - - [16,406] [16,406] [Increase] decrease in deferred outflows - - 1,085 1,085 Increase [decrease] in accounts payable 158 - [2,120] [1,962] Increase [decrease] in accrued compensated absences - - [27,942] [27,942] Increase [decrease] in net pension liability - - 1,719 1,719 Increase [decrease] in KPERS OPEB liability - - 4,659 4,659 Increase [decrease] in claims payable 72,794 108,438 - 181,232 Increase [decrease] in deferred inflows --[1,824] [1,824] Net cash provided by [used in] operating activities [23,761]$ [923,953]$ [34,918]$ [982,632]$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS (Continued) COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 103 104 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund - To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund - To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund - To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund - To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund - To account for monies held by the police department for use in investigations. Citizenship agency fund - To account for donations received and used for the citizenship fund. Section 125 plan agency fund - To account for monies held for the Section 125 plan. DTF federal forfeiture fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund – To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund – To account for funds being held in escrow for bonds issued by Municipal Court. Special Fire Court Police Section Beechcraft Bail Assessment Insurance Payroll Bond and Investigation 125 DTF DTF Remediation Bond Escrow Proceeds Clearing Restitution Account Citizenship Plan Local Reserve Settlement Escrow Totals ASSETS: Cash and investments 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total assets 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ LIABILITIES: Accounts payable 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total liabilities 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ December 31, 2019 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS See independent auditor's report on the financial statements. Balance Balance December 31, December 31, 2018 Additions Deductions 2019 Cash and investments Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total Assets 312,065$ 448,888$ 490,857$ 270,096$ Accounts Payable Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total liabilities 312,065$ 448,888$ 490,857$ 270,096$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended December 31, 2019 AGENCY FUNDS See independent auditor's report on the financial statements. 106 67$7,67,&$/6(&7,21 2010Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount %Governmental activitiesNet investment in capital assets 113,001$ 96% 109,289$ 93% 112,929$ 94% 116,585$ 90% 115,589$ 90% 130,401$ 122% 124,635$ 108% 129,921$ 105% 144,846$ 109% 151,527$ 110%Restricted 988 1% 1,712 1% 1,082 1% 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2% 1,670 1%Unrestricted3,808 3% 6,333 5% 5,511 5% 11,628 9% 11,413 9% (24,922) -23% (10,505) -9% (8,232) -7% (13,759) -10% (14,839) -11% Total governmental activities net position117,797$100% 117,334$100% 119,522$100% 129,423$100% 127,878$ 100% 106,703$ 100% 115,868$100% 123,701$100% 133,453$ 100% 138,358$ 100%Business-type activitiesNet investment in capital assets 48,078$ 75% 44,227$ 63% 50,857$ 69% 57,103$ 75% 61,721$ 75% 68,107$ 80% 62,427$ 71% 63,316$ 71% 62,368$ 69% 63,301$ 68%Restricted 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,368 1%Unrestricted14,306 22% 24,528 35% 21,450 29% 17,794 23% 19,545 24% 15,610 18% 23,621 27% 24,255 27% 26,503 29% 28,883 31%Total business-type activities net position63,937$ 100% 70,308$ 100% 73,860$ 100% 76,450$ 100% 82,778$ 100% 85,229$ 100% 87,560$ 100% 89,083$ 100% 90,383$ 100% 93,552$ 100%Primary governmentNet investment in capital assets 161,080$ 89% 153,516$ 82% 163,786$ 85% 173,688$ 84% 177,311$ 84% 198,508$ 103% 187,062$ 92% 193,237$ 91% 207,213$ 93% 214,828$ 93%Restricted 2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% 3,878 2% 3,038 1%Unrestricted18,115 10% 30,867 16% 26,961 14% 29,422 14% 30,959 15% (9,312) -5% 13,116 6% 16,023 8% 12,744 6% 14,044 6%Total primary government net position181,736$100% 187,599$100% 193,382$100% 205,873$100% 210,658$ 100% 191,932$ 100% 203,428$100% 212,784$100% 223,835$ 100% 231,910$ 100%Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 20192019201820172013201120162014Schedule 1City of Salina, KansasNet Position by ComponentLast Ten Fiscal Years20152012Fiscal Year(accrual basis of accounting)(in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities: General government 10,845$ 13,614$ 11,278$ 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ Public safety 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 Public works 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 Public health and sanitation 1,365 1,368 1,383 1,369 347 995 1,095 1,126 1,256 1,156 Culture and recreation 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 Planning and development 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 Interest on long term debt 2,256 1,650 1,914 1,953 1,817 1,774 2,971 1,725 2,117 2,169 Total governmental activities expenses 55,128 55,212 53,298 53,221 54,340 52,077 53,918 54,811 59,145 59,479 Business-type activities: Solid waste disposal 3,010 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 Water and sewer 14,050 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,294 Sanitation 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,266 Golf course 817 825 723 768 837 821 792 852 926 888 Total business-type activities expenses 20,138 19,628 20,128 21,955 20,041 16,208 19,977 21,045 20,917 20,319 Total primary government expenses 75,266$ 74,840$ 73,426$ 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 79,798$ Program Revenues Governmental activities: Charges for services General government 5,143$ 6,106$ 6,328$ 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ Public safety 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 Public works 198 262 306 277 255 193 238 348 285 309 Public health and sanitation 37 43 46 34 46 46 44 50 47 46 Culture and recreation 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 Planning and development 144 153 158 161 167 73 140 91 150 104 Operating grants and contibutions 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 Capital grants and contributions - - - - - - 733 - - - Total governmental activities program revenues 15,723 16,377 17,351 16,342 15,900 12,958 15,150 14,642 14,710 14,271 Business-type activities: Charges for services Solid waste disposal 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 Water and sewer 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,255 Sanitation 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,276 Golf course 736 636 783 719 811 820 789 798 756 810 Operating grants and contributions - 202 - - - - - - - - Capital grants and contributions -3,804 274 -115 ---- - Total business-type activities program revenues 22,419 27,784 25,755 24,309 25,245 24,927 25,657 26,703 27,061 27,423 Total primary government program revenues 38,142$ 44,161$ 43,106$ 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,694$ Net (Expense) Revenue Governmental activities (39,405)$ (38,835)$ (35,947)$ (36,879)$ (38,440)$ (39,119)$ (38,768)$ (40,169)$ (39,800)$ (45,208)$ Business-type activities 2,281 8,156 5,627 2,354 5,204 8,719 5,680 5,658 6,143 7,103 Total primary government net expense (37,124)$ (30,679)$ (30,320)$ (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$(33,657)$(38,105)$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 7,803$ 7,783$ 8,272$ 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ Property taxes, debt service 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 Motor vehicle taxes 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 Sales tax, general purpose 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 Selective sales tax 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 Investment revenues 81 77 66 67 98 86 148 92 183 670 Miscellaneous 565 872 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 Transfers, net 92 199 30 999 787 3,819 3,600 4,309 4,831 4,781 Total governmental activities 33,440 35,097 35,481 45,748 38,569 43,448 47,851 48,002 48,034 50,111 Business-type activities: Investment revenues 67 84 79 49 51 56 78 129 233 - Miscellaneous 341 330 434 279 97 - - 103 153 846 Reimbursements 180 132 79 - Transfers, net (92)(199)(30)(950)-(3,781)(3,581) (4,367) (4,831) (4,781) Total business-type activities 316 215 483 (622)328 (3,593) (3,424) (4,135) (4,445) (3,935) Total primary government 33,756$ 35,312$ 35,964$ 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ Change in Net Position Governmental activities (5,965)$ (3,738)$ (466)$ 8,869$ 129$ 4,329$ 9,083$ 7,833$ 8,233 4,902 Business-type activities 2,597 8,371 6,110 1,732 5,532 5,126 2,256 1,523 1,698 3,169 Total primary government (3,368)$ 4,633$ 5,644$ 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 9,931$ 8,071$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Fiscal Year Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 2010 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved 99$ -$ -$-$-$-$-$-$-$-$ Nonspendable - 90 116 81 107 111 131 153 152 212 Restricted ------ -- -- Committed ------ -- -- Assigned - 293 540 331 239 199 136 214 340 274 Unreserved/unassigned 3,518 3,454 3,172 3,138 3,908 4,530 4,765 6,516 6,251 8,821 Total general fund 3,617 3,837$ 3,828$ 3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ Restatement 156 Restated fund balance 3,773$ All other governmental funds Reserved 6,413$ -$ -$-$-$-$-$-$-$-$ Nonspendable - - -- -- -- -- Restricted - 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 Committed - 127 (516) 7,486 9,886 8,695 14,284 10,072 7,325 8,086 Assigned - 4,323 4,087 3,146 1,280 619 1,043 641 1,227 963 Unreserved/unassigned (1,130) - - - - (10,537) (6,823) (28)(852)(7,804) Total all other governmental funds 5,283$ 8,061$ 6,890$ 14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Source: City of Salina Comprehensive Annual Financial Reports, 2010-2019 2011 (Note 1) Fiscal Year Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenues Taxes (see Schedule 5) 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Intergovernmental 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 Special assessments 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 Licenses and permits 11 6 8 9 7 10 7 6 3 4 Charges for services 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 Investment revenue 64 69 47 40 59 47 142 79 157 670 Reimbursements 70 32 36 9,015 123 491 1,406 - - - Donations 241 83 141 111 238 90 Miscellaneous 448 599 537 810 799 1,853 4,315 1,851 884 1545 Total revenues 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 58,774 Expenditures General government 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 Public safety 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 23,692 Public works 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 Public health and sanitation 1,332 1,330 1,343 1,344 319 982 1,078 1,097 1,236 1,121 Culture and recreation 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 Planning and development 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 Miscellaneous 32 - - - - - - - - - Capital outlay 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 Debt service Principal 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 Interest 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 Deposit to escrow 107 -92 ------- Total expenditures 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 78,262 Other financing sources (uses) Bonds and notes issued 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 Bond and note premium 47 23 60 185 302 369 1,503 95 70 443 Transfers in 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 Transfers out (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) Issuance costs - - - - - - - - - Other -156 - - - - --- - Total other financing sources (uses)7,173 9,046 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16,174 Net change in fund balance (11,898)$2,803$ 574$ 6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ Debt service as a percentage of non-capital expenditures 21% 17% 28% 18% 18% 20% 50% 16% 37% 28% Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Real estate 9,756$ 10,288$ 10,466$ 10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ Delinquent 278 274 245 248 235 279 246 210 276 190 Motor vehicle 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 General sales 11,117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 Selective sales 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7,240 6,975 Total taxes 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Assessed ValueFiscal (Budget) Year Real Estate Personal Property State AssessedTotal, Excluding Motor Vehicles Tax RateMotor Vehicle (Note 1)Total, Taxable Assessed ValueEstimated Total Market Value (Note 2)Assessed Value to Est. Market Value2010 358,979,211$ 24,760,806$ 13,730,609$ 397,470,626$ 25.855 50,330,252$ 447,800,878$ 2,893,359,541$ 15.482011 367,750,803$ 19,918,188$ 14,685,585$ 402,354,576$ 26.022 47,406,062$ 449,760,638$ 2,869,531,746$ 15.672012369,416,422$ 18,654,394$ 15,779,466$ 403,850,282$ 26.272 47,553,744$ 451,404,026$ 2,884,188,981$ 15.652013370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,889,385,914$ 15.712014376,131,346$ 13,652,885$ 17,670,147$ 407,454,378$ 27.080 48,865,900$ 456,320,278$ 2,917,267,724$ 15.642015381,087,426$ 12,607,815$ 18,984,453$ 412,679,694$ 27.311 50,350,566$ 463,030,260$ 2,957,531,741$ 15.662016389,872,825$ 11,653,719$ 19,323,055$ 420,849,599$ 27.603 51,833,505$ 472,683,104$ 3,046,949,034$ 15.512017399,918,216$ 10,900,308$ 19,671,685$ 430,490,209$ 27.311 50,970,796$ 481,461,005$ 3,097,885,103$ 15.542018403,835,383$ 10,130,718$ 20,485,144$ 434,451,245$ 26.129 53,336,677$ 487,787,922$ 3,150,409,123$ 15.482019421,108,311$ 11,173,863$ 22,113,195$ 454,395,369$ 28.394 54,687,311$ 509,082,680$ 3,294,115,685$ 15.45Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort.Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value.Source: Saline County ClerkNote 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value.Schedule 6City of Salina, KansasAssessed and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years112 City of Salina Saline County USD 305 (2) Other (1)Fiscal (Budget) YearOperating MillageDebt Service MillageTotal City MillageOperating MillageDebt Service MillageTotal County MillageOperating MillageDebt Service MillageTotal USD Millage Other2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.0552011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.4982012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.6572013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.7972014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.8792015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.0372016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.9992017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.1532018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.1402019 22.285 6.109 28.394 38.437 38.437 46.776 10.746 57.522 13.988 138.341Source: Saline County Treasurer(2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered bythese jurisdictions.Schedule 7City of Salina, KansasDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(rate per $1,000 of assessed value)(1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas StateExtension District #3.Total Taxpayer Type of Business Assessed Valuation% of Total RankAssessed Valuation% of Total Valuation RankEvergy (Westar Energy (Western Resources) Utility 5,191,056$ 1.55% 4 13,682,027$ 3.01% 1SFC Global Supply Chain, Inc. (Schwan's) Pizza Manufacturing 10,144,446 3.03% 1 6,855,966 1.51% 2Kansas Gas Service Utility 3,449,876 1.03% 7 4,415,353 0.97% 3RAF Salina LLC Retail Shopping Mall 8,704,250 2.60% 2 4,296,499 0.95% 4S&B Motels Motel - 3,774,927 0.83% 5Central Mall Realty Holding LLC Regional Shopping Center - 2,868,321 0.63% 6Union Pacific Railroad - 2,570,668 0.57% 7Menard Inc. Home Improvement - 2,465,098 0.54% 8Individual Residential - 2,440,724 0.54% 9Sams Real Estate Business Trust/Walmart Discount Retail Stores - 2,286,508 0.50% 10Wal-mart Real Estate Business Trust Discount Retail Stores 3,913,855 1.17% 5 -Great Plains Manufacturing Manufacturing 2,526,984 0.75% 10 -Gateway Properties Shopping Mall (Midstate) 3,556,009 1.06% 6 -Southwestern Bell Telephone Utility 3,455,419 1.03% 8 -Sunflower Bank Banking Institution 2,749,200 0.82% 9 -Salina Regional Health Center Hospital and Medical Offices 5,584,461 1.67% 3 -Combined Valuation of the Ten Largest Taxpayers 49,275,556$ 45,656,091$ City Valuation335,262,182$ 454,395,369$ Percent of Total City Assessed Valuation14.70% 10.05%Source: Saline County Clerk's Office or recent OSSchedule 8City of Salina, KansasPrincipal Property TaxpayersCurrent Year and Ten Years Ago2010 (2009 Assessed Value) 2019 (2018 Assessed Value) Fiscal (Budget) Year Taxes Levied for the fiscal year Amount Percentage Delinquent Collections (1) Amount Percentage of levy 2010 10,276,905$ 9,704,937$ 94.4% 278,656$ 9,983,593$ 97.1% 2011 10,415,491$ 10,287,770$ 98.8% 273,843$ 10,561,613$ 101.4% 2012 10,570,420$ 10,411,299$ 98.5% 245,086$ 10,656,385$ 100.8% 2013 10,576,448$ 10,145,404$ 95.9% 248,184$ 10,393,588$ 98.3% 2014 10,908,147$ 10,776,688$ 98.8% 398,820$ 11,175,508$ 102.5% 2015 11,316,065$ 10,460,246$ 92.4% 617,496$ 11,077,742$ 97.9% 2016 11,740,993$ 10,972,299$ 93.5% 245,577$ 11,217,876$ 95.5% 2017 11,254,398$ 11,239,051$ 99.9% 209,950$ 11,449,001$ 101.7% 2018 11,260,358$ 10,803,591$ 95.9% 276,340$ 11,079,931$ 98.4% 2019 12,201,319$ 12,028,761$ 98.6% 376,578$ 12,405,339$ 101.7% Source: Saline County Treasurer's Office (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Current Year Tax Distributions Total Tax Distributions Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019City Direct Tax RateGeneral 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%Special purpose 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.75% 0.75% 0.75%County-wide Tax Rate1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Portion of County-wide tax allocated to City (July Percentage)61.58% 63.34% 61.72% 60.86% 60.23% 60.28% 60.28% 60.28% 59.85% 60.33%Source: Kansas Department of RevenueSchedule 10City of Salina, KansasDirect Sales Rate by Taxing EntityLast Ten Fiscal YearsIn addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016.Fiscal Year 2018 2019# Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts WaterRate Class Billed Sold Billed Sold Billed SoldBilled Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential 17,838 1,127,864 17,899 1,194,629 17,893 1,225,931 17,966 989,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 18,130 963,387 18,155 864,810 Commercial 1,568 350,633 1,574 372,499 1,565 38,547 1,579 348,968 1,599 353,675 1,600 350,767 1,603 345,232 1,606 345,250 1,614 340,960 1,607 352,051 Industrial 44 183,166 44 180,277 42 174,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 Government 85 42,714 97 55,910 99 54,618 99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 Apartment 172 71,121 168 72,562 169 70,263 168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 Schools 85 46,386 85 53,679 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 Industrial special 1 44,457 1 44,051 1 40,448 1 20,439 - - - - - - - - - - - - Consumed in production 17 32,604 13 22,728 12 19,266 12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 Rural water 1 23,854 1 28,621 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 Hospitals 12 18,503 10 15,674 10 17,896 9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 Religious/non profit 39 5,569 38 5,690 38 5,399 37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 Other taxable deductions - - - 699 - - - - - - - - - - - - - - - - Engineering studies 8 5,266 7 3,754 8 6,104 8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 Providing taxable service 2 5,494 2 4,827 2 6,118 2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 Sale of component parts 8 5,851 8 5,454 8 5,726 6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 Fire hydrant 3 2,424 3 1,389 4 2,533 3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 Industrial consumed in production 3 4,083 3 3,260 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 Sales of farm equipment 1 213 1 56 1 83 1 107 1 48 1 53 1 54 1 104 1 56 1 124 19,887 1,970,202 19,954 2,065,759 19,937 1,754,027 20,018 1,793,771 20,111 1,801,577 20,153 1,779,999 20,193 1,717,766 20,192 1,753,343 20,196 1,734,098 20,210 1,621,853 Water Rate Schedule:Monthly meter charge (5/8") 4.51$ $4.60 $4.74 $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 $5.94Commodity charge (per 000 gal.):0 - 2000 gal. 2.55$ $3.77 $3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 $5.132001 - 10,000 galOver 10,000 gal.Excess use charge 5.10$ $7.54 $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 $10.26Wastewater Rate Schedule:Monthly base charge 6.42$ $6.57 $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 $8.08Unit cost (per 000 gal.): 3.08$ $4.48 $4.61 $4.79 $4.94 $5.01 $5.19 $5.29 $5.51 $5.70Water sold is expressed in thousands of gallons.Number of Accounts billed is the annual number of billings for each class divided by 12.Monthly meter charge increases with the size of the meter.Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption.2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rateSource: City of Salina Water Customer Accounting Office.2012Schedule 11City of Salina, KansasWater Sales by Class of CustomerLast Ten Fiscal Years2011 2014 201720162010 2013 2015 Fiscal YearGeneral Obligation Bonds Loans Payable Capital Lease Temporary NotesGeneral Obligation BondsWater Revenue Bonds Loans PayableTemporary NotesTotal Primary GovernmentPercentage of Personal Income Per Capita2010 53,120,952$-$-$ 2,500,000$ 8,614,576$ 1,580,000$ -$ -$ 65,815,528$ 3.8% 1,425.20$ 2011 55,225,670$-$-$ 3,400,000$ 7,417,907$ 16,193,925$-$ -$ 82,237,502$ 4.3% 1,723.80$ 2012 49,109,575$-$-$ 1,485,000$ 9,613,926$ 15,850,228$-$ -$ 76,058,729$ 3.8% 1,583.07$ 2013 49,631,797$-$-$ 3,800,000$ 8,519,799$ 15,226,532$-$ -$ 77,178,128$ 3.7% 1,613.05$ 2014 50,033,555$-$ 176,235$ 5,000,000$ 9,587,351$ 14,592,836$ 6,208,102$ -$ 85,598,079$ 4.1% 1,788.25$ 2015 50,840,632$-$ 479,366$ 5,995,000$ 8,539,773$ 13,949,139$ 5,753,620$ -$ 85,557,530$ 4.1% 1,789.42$ 2016 51,816,399$ 12,157,127$ 321,174$ 11,505,000$ 7,640,381$ 13,285,443$ 7,432,024$ -$ 104,157,548$ 5.0% 2,200.39$ 2017 55,994,305$ 12,171,090$ 157,868$ 6,811,742$ 6,520,433$ 12,606,747$ 8,862,810$ -$ 103,124,995$ 4.9% 2,194.43$ 2018 51,968,310$ 12,185,053$ -$ 18,123,505$ 5,282,578$ 11,898,051$ 10,632,351$ -$ 110,089,848$ 4.9% 2,342.64$ 2019 54,607,702$ 12,640,000$ -$ 11,170,000$ 4,102,298$ 10,330,000$ 46,354,852$ -$ 139,204,852$ 6.0% 2,979.81$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019Governmental Activities Business-Type ActivitiesSchedule 12City of Salina, KansasRatio of Outstanding Debt by TypeLast Ten Fiscal Years Fiscal YearGeneral Obligation Bonds Capital LeaseTemporary Notes TotalLess Debt Service FundNet General Bonded DebtPercentage of Actual Taxable Value of Property Per Capita2010 61,735,528$-$ 2,500,000$ 64,235,528$ 571,873$ 63,663,655$ 14.2% 1,378.60$2011 62,443,577$-$ 3,400,000$ 65,843,577$ 1,236,026$ 64,607,551$ 14.4% 1,354.26$2012 58,723,501$-$ 1,485,000$ 60,208,501$ 582,412$ 59,626,089$ 13.2% 1,241.05$2013 58,151,596$-$ 3,800,000$ 61,951,596$ 707,763$ 61,243,833$ 13.5% 1,280.02$2014 59,620,906$ 176,235$ 5,000,000$ 64,797,141$ 407,864$ 64,389,277$ 14.1% 1,345.17$2015 59,380,405$ 479,366$ 5,995,000$ 65,854,771$ 745,339$ 65,109,432$ 14.1% 1,361.75$2016 59,456,780$ 321,174$ 11,505,000$ 71,282,954$ 1,248,914$ 70,034,040$ 14.8% 1,479.51$2017 62,514,738$ 157,868$ 6,811,742$ 69,484,348$ 1,509,863$ 67,974,485$ 14.1% 1,446.45$2018 57,250,888$-$ 18,123,505$ 75,374,393$ 1,851,358$ 73,523,035$ 15.1% 1,564.52$2019 58,710,000$-$ 11,170,000$ 69,880,000$ 1,851,358$ 68,028,642$ 13.4% 1,456.22$Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019General Bonded Debt OutstandingSchedule 13City of Salina, KansasRatio of Net General Bonded Debt OutstandingLast Ten Fiscal Years City of Salina, Kansas Direct and Overlapping Governmental Activities Debt Jurisdiction Net General Obligation Bonded Debt Outstanding Percentage Applicable to City of Salina Amount Applicable to the City of Salina Direct: City of Salina 73,523,035$ 100.00%73,523,035$ Overlapping: Salina Airport Authority 20,175,000 100.00% 20,175,000 Saline County 220,693 73.98% 163,268 USD 305 109,280,000 93.20%101,854,179 Total Overlapping Debt 129,675,693 122,192,447 Total Direct and Overlapping Debt 203,198,728$ 195,715,482$ Per Capita Direct and Overlapping debt 4,093.35$ Source: Saline County Clerk Schedule 14 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. As of December 31, 2019 Assessed Valuation 509,082,680$ Debt Limit (30% of Assessed Value) 152,724,804 Debt applicable to limit:Total Bonded Debt 118,785,263$ Less GO Debt Attributable to Exempt Purposes (4,116,514) Less Revenue Bonds (11,122,175) Less Capital Leases -Less Loans Payable (34,738,703) Less Fund Balance designated for Debt Service (1,142,418) Total Debt Applicable to Limitation 67,665,453$ Legal debt margin 85,059,351$ 2010201120122013201420152016201720182019Debt Limit 134,340,263$ 134,928,191$ 135,421,208$ 136,196,966$ 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 152,724,804Total net debt applicable to limit 58,411,185 57,747,032 49,309,445 52,724,034 54,625,691 56,090,293 62,072,485 61,296,184 68,240,457$ 67,665,453$Legal debt margin 75,929,078$ 77,181,159$ 86,111,763$ 83,472,932$ 82,270,392$ 82,818,785$ 79,732,446$ 80,704,353$ 78,095,920$85,059,351$Total net debt applicable to the limit as a percentage of debt limit43% 43% 36% 39% 40% 40% 44% 43% 47% 44%Last Ten Fiscal YearsFiscal YearLegal Debt Margin Calculation for 2019Schedule 15City of Salina, KansasLegal Debt Margin Utility Service Less Operating Net Available Debt Service Fiscal Year Charges Expenses Revenue Principal Interest Coverage 2010 16,565,880$ 11,803,594$ 4,762,286$ 740,000$ 91,450$ 5.73 2011 17,976,508$ 11,905,114$ 6,071,394$ 1,580,000$ 496,760$2.92 2012 19,163,426$ 12,222,431$ 6,940,995$ 340,000$ 596,992$7.41 2013 17,974,089$ 13,373,088$ 4,601,001$ 620,000$ 590,191$3.80 2014 18,964,164$ 12,112,288$ 6,851,876$ 630,000$ 577,791$5.67 2015 19,139,612$ 9,859,974$ 9,279,638$ 640,000$ 565,191$7.70 2016 19,389,348$ 11,800,473$ 7,588,875$ 660,000$ 549,191$6.28 2017 19,958,862$ 13,148,035$ 6,810,827$ 675,000$ 529,391$5.65 2018 20,382,469$ 12,973,621$ 7,408,848$ 705,000$ 509,141$6.10 2019 20,842,606$ 13,269,741$ 7,572,865$ 725,000$ 487,991$6.24 Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 City of Salina Debt Service Schedules Water/Sewer Revenue Bonds Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Debt Service Fiscal Year PopulationPer Capita Personal Income (Saline County)Personal Income, Salina (interpolated)Unemployment RateLabor Force, City of SalinaUSD 305 HeadcountPercentage Free and Reduced LunchCity .5 cent sales taxPer Capita .5 cent sales TaxAs a % of per capita personal income2010 46,180 37,880$ 1,749,298,400$ 6.7% 26,379 7,346 57.8% 4,803,553$ 104.02$ 0.275%2011 47,707 40,512$ 1,932,705,984$ 6.7% 26,258 7,289 58.7% 5,076,751$ 106.42$ 0.263%2012 48,045 41,762$ 2,006,455,290$ 6.3% 26,185 7,305 59.1% 5,241,205$ 109.09$ 0.261%2013 47,846 43,078$ 2,061,109,988$ 5.1% 26,441 7,305 60.7% 5,326,723$ 111.33$ 0.258%2014 47,867 43,736$ 2,093,511,112$ 5.3% 26,303 7,388 61.3% 5,555,601$ 116.06$ 0.265%2015 47,813 44,065$ 2,106,879,845$ 3.9% 26,170 7,369 61.8% 5,670,040$ 118.59$ 0.269%2016 47,336 44,230$ 2,093,647,612$ 3.3% 27,684 7,386 68.7% 5,727,260$ 120.99$ 0.274%2017 46,994 44,732$ 2,102,135,608$ 2.7% 27,684 7,176 62.1% 5,755,869$ 122.48$ 0.274%2018 46,994 47,945$ 2,253,127,330$ 3.3% 30,174 7,180 61.7% 5,770,174$ 122.79$ 0.256%2019 46,716 49,983$ 2,335,005,828$ 2.9% 30,094 7,245 59.2% 5,968,961$ 127.77$ 0.256%Sources:Increase in per capita Sales Tax (10 years) 22.8%Population: Kansas Division of the Budget. Increase in per capita Personal Income 32.0%Personal income for Salina is derived from the population and per capita personal income for Saline CountyPer Capita Personal income as reported by the Bureau of Economic Analysis2019 Per Capita Personal Income staff projection2010-2019 Employment City of SalinaUSD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget DocumentEmployment: Kansas Department of LaborSchedule 17City of Salina, KansasDemographic and Economic StatisticsLast Ten Fiscal YearsFree and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2018-2019 school year is reported as 2018. Employer Type of Business Employees RankPercentage of Labor Force Employees RankPercentage of Labor ForceSalina Regional Health Center Health Care 2,093 2 7.9% 1,875 1 6.2%Schwan's Global Supply Chain Frozen Pizza Manufacturing 1,850 1 7.0% 1,700 2 5.6%Unified School District No 305 Public School System 935 3 3.5% 1,500 3 5.0%Great Plains Manufacturing Agricultrual & Landscaping Equipment 650 5 2.5% 1,100 4 3.7%Exide Technologies Automotive Battery Manufacturer 800 4 3.0% 600 5 2.0%City of Salina City Government 493 7 1.9% 425 6 1.4%Salina Vortex Manufacturing - 375 7 1.2%REV Group Manufacturing - 300 8 1.0%Walmart Retail - 250 9 0.8%Signify Fluorescent Lamps 600 6 2.3% 190 10 0.6%Raytheon Aircraft Aircraft Manufacturing 357 8 1.4% -Eldorado National Busses/Recreational Vehicle 255 9 1.0% -OCCK Disability Services 263 10 1.0% -Total8,296 31.4% 8,315 27.6%Source: Salina Chamber of CommerceSchedule 18City of Salina, KansasPrincipal EmployersCurrent Year and Nine Years Ago2010 2019 APPENDIX D 2020 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2020 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. Unaudited Revenues, Expenditures and Fund Balances Fiscal Year Ending December 31, 2020 City of Salina, Kansas (Non-GAAP Basis) FUND NAME Fund Number BEG. BALANCE DEBITS CREDITS NET CHANGE END BALANCE Outstanding Encumbrances Unencumbered Cash Balance 12/31/20 General 100 8,095,315.44 45,805,432.68 40,341,804.07 5,463,628.61 13,558,944.05 244,434.00 13,314,510.05 Sales Tax Capital 210 2,712,288.60 10,370,299.53 6,085,679.47 4,284,620.06 6,996,908.66 1,109,312.61 5,887,596.05 Gas Tax 270 1,910,306.87 2,427,792.92 2,220,745.39 207,047.53 2,117,354.40 632,092.01 1,485,262.39 Sanitation 300 1,754,760.80 3,402,091.83 2,981,808.41 420,283.42 2,175,044.22 - 2,175,044.22 Solid Waste 320 4,567,293.38 3,380,769.04 2,320,622.91 1,060,146.13 5,627,439.51 153,796.23 5,473,643.28 Golf 340 25,487.73 863,947.99 844,008.87 19,939.12 45,426.85 - 45,426.85 Water/Wastewater 370 13,271,169.89 23,298,490.59 18,082,897.57 5,215,593.02 18,486,762.91 142,638.80 18,344,124.11 Debt Service 500 1,089,324.32 6,820,952.27 6,244,676.69 576,275.58 1,665,599.90 - 1,665,599.90 Water/Wastewater Debt Service 510 655,428.71 - - - 655,428.71 - 655,428.71 Water/wastewater Capital Reserve 735 11,144,651.26 250,000.00 586,202.51 (336,202.51) 10,808,448.75 292,472.48 10,515,976.27 Solid Waste Reserve 750 1,439,120.33 6,000.00 63,907.25 (57,907.25) 1,381,213.08 - 1,381,213.08 Total 46,665,147.33 96,625,776.85 79,772,353.14 16,853,423.71 63,518,571.04 2,574,746.13 60,943,824.91 Source: City of Salina EXHIBITA CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL Re: General Obligation Internal Improvement Bonds, Series 2021-A; General Obligation Te mporary Notes, Series 2021-1 The undersigned is the duly acting Director of Finance of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule J 5c2-12(b)( 1) 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: Director of Finance OFFICIAL STATEMENT 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, (3) the Bonds are designated as “qualified tax-exempt obligations” within the meaning of Code Section 265(b)(3); and (4) the Notes have not been designated as “qualified tax-exempt obligations” within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. New Issues Moody’s Ratings: Bonds- “Aa3” Book-Entry Only Notes- “MIG1” CITY OF SALINA, KANSAS $5,230,000 $7,645,000 GENERAL OBLIGATION TEMPORARY NOTES GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-1 SERIES 2021-A Dated: Date of Delivery Due: As Shown Herein The General Obligation Temporary Notes, Series 2021-1 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 2021-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, 2022 (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, 2021. This Official Statement is dated April 12, 2021. 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 SCHEDULES $5,230,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 Base CUSIP(2) Maturity Amount Rate Yield 794744 05-01-22 $5,230,000 2.000% 0.180% DU3 The Notes are not be subject to redemption prior to maturity. $7,645,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A SERIAL BONDS Base CUSIP(1) Maturity Amount Rate Yield 794744 10-01-22 $225,000 4.000% 0.200% DV1 10-01-23 320,000 4.000 0.300 DW9 10-01-24 335,000 4.500 0.350 DX7 10-01-25 350,000 4.500 0.480 DY5 10-01-26 365,000 4.500 0.600 DZ2 10-01-27 380,000 4.500 0.800 EA6 10-01-28 395,000 4.500 0.900 EB4 10-01-29(2)415,000 2.000 1.100 EC2 10-01-30(2)425,000 2.000 1.250 ED0 10-01-31(2)430,000 2.000 1.350 EE8 10-01-32(2)440,000 2.000 1.450 EF5 10-01-33(2)445,000 2.000 1.500 EG3 10-01-34(2)460,000 1.625 1.600 EH1 10-01-35(2)470,000 1.625 1.650 EJ7 10-01-36(2)475,000 1.750 1.700 EK4 10-01-37(2)330,000 2.000 1.800 EL2 10-01-38(2)335,000 2.000 1.850 EM0 10-01-39(2)345,000 2.000 1.900 EN8 10-01-40(2)350,000 2.000 2.000 EP3 10-01-41(2)355,000 2.000 2.030 EQ1 (1)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 ofthe 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. (2) At the option of the City, Bonds maturing on October 1, 2029 and thereafter, will be subject to redemption and payment priorto their Stated Maturity on October 1, 2028, 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 206 300 West Ash P. O. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Melissa Rose Hodges, Mayor Trent W. Davis, M.D., Vice Mayor Mike Hoppock, Commissioner Rod Franz, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Director of Finance Cheryl Mermis, Deputy 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 ......................................................................................................................................... 5 THE DEPOSITORY TRUST COMPANY ................................................................................................... 10 THE FINANCING PLAN ......................................................................................................................... 12 SOURCES AND USES OF FUNDS .......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS ......................................................................... 13 LEGAL MATTERS ................................................................................................................................. 16 TAX MATTERS ..................................................................................................................................... 16 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR .......................................................................................................................... 18 UNDERWRITING ................................................................................................................................. 18 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 19 CONTINUING DISCLOSURE ................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 19 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY .............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY ........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY ..................................................................... A-6 DEBT SUMMARY OF THE CITY ....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................................... A-14 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2019 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2020 --- 1 OFFICIAL STATEMENT CITY OF SALINA, KANSAS $5,230,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 $7,645,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A INTRODUCTORY STATEMENT General 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 $5,230,000 General Obligation Temporary Notes, Series 2021-1 (the “Notes”), and its $7,645,000 General Obligation Internal Improvement Bonds, Series 2021-A (the “Bonds”, and together with the Notes, the “Securities”). The Notes are being issued to provide funds to finance certain public improvements within the City. The Bonds are being issued to provide funds to permanently 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 Securities 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 provided by the Issuer 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. Stifel, Nicolaus & Company, the Municipal Advisor, has assisted the Issuer with the preparation of this Official Statement, but has not independently verified the factual and financial information contained herein. 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, or the Securities may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. 2 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution, particularly Article 12 § 5 thereof, 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. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 12- 2104, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the “Note Resolution”). Security The Notes shall be general obligations of the City, payable as to both principal and interest from 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 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 without option of prior redemption and payment. 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. The Notes shall not be subject to optional redemption and payment prior to their Stated Maturity. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the “Note Registrar” and “Note Paying Agent”) has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or 3 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, if any, 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. 4 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-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through 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 Notes being issued to any Owner other than 5 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)(1) 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. 12-6a01 et seq., and K.S.A. 12-1736 et seq., 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 in part from special assessments levied upon the property benefited by the construction of the Improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable] from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. 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 6 Bonds as the same become due. Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes and/or assessments shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes 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 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, 2029 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2028, 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 7 Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the “Bond Registrar” and “Bond Paying Agent”) has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall 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. 8 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. “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.” 9 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 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 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)(1) 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 10 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 (“DTC”), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with DTC. 2. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+”. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 11 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to the Paying Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. 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”)and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Ordinance/ Resolution Authority Principal Amount Great Plains Manufacturing Center Convention Hall HVAC Tony’s Pizza Event Center Res. 21-7931 K.S.A. 12-1736 162,431.52 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,620,001.91 Smoky Hill River Renewal Ord. 17-10885 Article 12, §5 of the Constitution of the State of Kansas 1,518,751.79 North 9th Street Bridge Ord. 02-10071; Res. No. 19-7677 K.S.A. 12-685 et seq. 1,928,814.78 Total: $5,230,000.00 The Bond Projects Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (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 Ordinance/ Resolution Authority Principal Amount Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. 12-6a01 et seq. $499,727.58 Police Training Facility Res. 19-7743 K.S.A. 12-1736 et seq. 5,770,000.01 Stone Lake 2 Res. 19-7750 K.S.A. 12-6a01 et seq. 443,342.44 9 South Res. 19-7749 K.S.A. 12-6a01 et seq. 828,865.54 Tony’s Pizza Event Center Basketball Floor Replacement Res. 21-7932 K.S.A. 12-1736 et seq. 103,064.42 Total: $7,645,000.00 13 SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Notes Bonds Sources of Funds: Principal Amount $5,230,000.00 $7,645,000.00 Net Original Issue Premium 95,499.80 525,799.90 Remaining Temporary Note Proceeds - 135,238.13 Prepaid Special Assessments -. 34,062.67 Total Sources of Funds $5,325,499.80 $8,340,100.70 Uses of Funds: Deposit to Improvement Fund - Improvements $5,194,745.00 - Deposit to Improvement Fund – Bid Premium 92,048.00 - Redemption of Temporary Notes - $7,120,891.66 Additional Project Costs - 1,073,124.59 Underwriter’s Discount 3,451.80 61,694.77 Cost of Issuance 35,255.00 84,389.68 Total Application of Funds $8,340,100.70 $5,325,499.80 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 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. 14 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 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 $1.502 billion in calendar year 2019 and KP&F had an UAAL of approximately $949 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under “TAX MATTERS” assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. 15 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. 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. 16 COVID-19 On March 11, 2020, the World Health Organization proclaimed the Coronavirus (COVID-19) to be a pandemic. In an effort to lessen the risk of transmission of COVID-19, the United States government, state and local governments and private industries have taken measures to limit social interactions in an effort to limit the spread of COVID-19, affecting business activities and impacting global, state and local commerce and financial markets. State and local governmental authorities continue efforts to contain and limit the spread of COVID-19. As of the date hereof, the Issuer has not experienced material adverse changes relative to its adopted budget with regard to expenditures or receipt of revenues. However, future revenue collections, including property tax collections that are essential to repayment of the Bonds, may deviate from historical or anticipated levels. The emergence of COVID-19 and the spread thereof continues to be an emerging and evolving issue. The Issuer is not able to predict and makes no representations as to the long term economic impact of the COVID-19 pandemic on the Issuer. 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. 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 Bonds. The Bonds are “qualified tax-exempt obligations” within the meaning of Code § 265(b)(3). 17 Bank Qualification – The Notes. The Notes have not been designated as “qualified tax-exempt obligations” for purposes of Code §265(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel’s opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount (“OID”) is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is 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, 2022 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. 18 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 “MIG1” 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, but has not independently verified the factual and financial information contained herein. The Municipal Advisor has also assisted the City 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 TD Securities, New York New York (the “Notes Underwriter”) at a price equal to the principal amount of the Notes, plus original issue premium of $95,499.80, less an underwriting discount of $3,451.80. The Bonds are being purchased by The Baker Group, Babylon, New York (the “Bonds Underwriter”) at a price equal to the par amount of the Bonds, plus a net original issue premium of $525,799.90, less an underwriting discount of $61,694.77. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the “Underwriters”. 19 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, 2020. In the Bond Resolution and the 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: On September 28, 2020, the Issuer entered into a Loan Agreement with the Kansas Department of Health and Environment to finance improvements to the City’s water distribution system. The Ordinance authorizing the Issuer’s execution of the Loan Agreement was published on October 1, 2020. On October 16, 2020, the Issuer filed an event notice related to such Loan Agreement. 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 A-1 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2020 Estimated Actual Valuation (1) $ 3,326,521,997 2020 Assessed Valuation $ 510,951,650 Outstanding General Obligation Bonds (2) $ 72,975,000 Population (2019 U.S. Census Bureau Estimate) 46,550 General Obligation Debt Per Capita $ 1,568 Ratio of General Obligation Debt to Estimated Actual Valuation 2.19% Ratio of General Obligation Debt to Estimated Assessed Valuation 14.28% Outstanding Temporary Notes (3) $ 12,280,000 Outstanding State Loans (4) $ 47,041,138 Outstanding Lease Purchase Obligations $ 583,725 Outstanding Utility System Revenue Bonds $ 9,615,000 Outstanding Special Obligation Revenue Bonds $ 22,400,000 Overlapping General Obligation Debt (5) $ 116,258,272 Direct and Overlapping General Obligation Debt (6) $ 248,554,410 Direct and Overlapping General Obligation Debt Per Capita $ 5,340 Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 7.47% Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation 48.65% _________________ (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 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-2 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 2019 U.S. Census Bureau estimate of 46,550. The City is the county seat for Saline County which had an estimated 2019 U.S. Census Bureau population of 54,224. 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: Name Title Term Expires Melissa Rose Hodges Mayor 2022 Trent W. Davis, M.D. Vice Mayor 2024 Rod Franz Commissioner 2022 Michael L. Hoppock Commissioner 2022 Karl F. Ryan Commissioner 2024 Population 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. U.S. Census Year Bureau Population 2019 46,550 2018 46,716 2017 46,994 2016 47,336 2015 47,813 A-3 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 7,000. 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 I-70 and I-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-4 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 December 31, 2019, KPERS serves approximately 325,000 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-5 (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 8.61% of the employee’s gross salary for calendar year 2020. The Issuer’s contribution is projected to change to 8.87% of gross compensation for calendar year 2021. 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, 2019 (the “2019 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 2019. The amount of the UAAL in 2019 changed from the previous year’s amount due to the factors discussed in the 2019 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 2019 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 2019 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 2019 Valuation Report sets the employer contribution rate for the period beginning January 1, 2022, for the KPERS Local Group, and KPERS’ actuaries identified that an employer contribution rate of 8.90% 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 2019 Valuation Report. The statutory contribution rate of employers currently equals the 2019 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 2019 Valuation Report, KP&F carried an UAAL of approximately $949 million at the end of 2019. 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, 2020, the Issuer contributes 21.93% of employees’ gross compensation. Beginning January 1, 2021, the Issuer’s contribution is projected to change to 22.80% of gross compensation for calendar year 2021. 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-6 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 2020 according to Kansas Department of Revenue. 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 2020 to be 25,446 persons. The estimated median household income for the City in 2019 was $50,490, and owner-occupied housing rates in the City were 64.4%. 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-7 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Schwan’s Company is building a new 400,000 square foot expansion at the existing manufacturing facility. The project is expected to bring 225 new jobs by 2023. 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 I-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2020, the Salina Air Traffic Control Tower logged over 60,000 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 2.295 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2020 and 118,268 as of January 2021. The Airport and Airport Industrial Center is home for over 125 businesses and organizations. 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, Salina Community Economic Development Organization, 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 2019 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 41 percent of the total economic activity in Saline County during 2017. A-8 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. Estimated Name Product/Business Employment Salina Regional Health Center Healthcare 1,875 Unified School District No. 305 School System 1,500 Schwan’s Global Supply Chain, Inc. Manufacturing 1,200 Great Plains Manufacturing Agricultural & Landscaping Equipment 1,200 Exide Technologies Battery Manufacturer 700 City of Salina City Government 425 Salina Vortex Manufacturing 385 Saline County Local Government 325 Walmart Discount Retail 250 REV Group Manufacturing 175 Source: Salina Chamber of Commerce Income The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Saline State of Year County Kansas 2019 N/A $53,453 2018 49,983 51,474 2017 47,831 48,869 2016 46,084 47,510 2015 44,542 47,386 Source: Kansas Statistical Abstract Labor Force 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 2020 (Dec) 25,446 24,563 883 3.5% 2019 25,643 24,847 796 3.1 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 A-9 State of Kansas: Total Unemployment Year Labor Force Employed Unemployed Rate 2020 (Dec) 1,507,057 1,449,369 57,688 3.8% 2019 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 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City’s outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturity Outstanding 07-15-11 2011-A Internal Improvements $6,565,000 10-01-21 $375,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 815,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 2,660,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 4,305,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 5,160,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 5,505,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 11,785,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 8,350,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 1,865,000 04-24-19 2019-A Improvements 11,090,000 10-01-39 10,850,000 04-29-20 2020-A Improvements 5,210,000 10-01-35 5,210,000 11-30-20 2020-B Refunding 8,450,000 10-01-36 8,450,000 04-29-21 2021-A Improvements 7,645,000 10-01-41 7,645,000 Total $72,975,000 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. Temporary Notes: Series Date Issued Final Maturity Date Original Note Amount Amount Outstanding 2020-1 04-29-20 05-01-21 $7,050,000 $7,050,000* 2021-1 04-29-21 05-01-22 5,230,000 5,230,000 $12,280,000 *To be redeemed with proceeds from the Bonds and other available funds. A-10 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 Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $9,615,000 Lease Obligations (as of December 31, 2020): 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 Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $18,080,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $22,400,000 State Loans The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment (“KDHE”) revolving loan fund program. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. Regardless of the intended source of repayment, the loans are ultimately secured by the City’s ability to levy unlimited ad valorem property taxes. Project Number Purpose Year Originated Final Payment Date Original Amount Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $ 5,857,668 KDHE 2917 Water 2019 02-01-40 32,000,000 30,727,444 KDHE 2957 Water 2019 02-01-40 4,250,000 4,080,989 KDHE 2998 Water 2019 02-01-40 4,250,000 4,250,000 KDHE 2050 Sewer 2020 03-01-35 2,250,000 2,125,037 $47,041,138 *Construction on this project is in progress. The outstanding principal amounts are expected to increase as the Issuer draws additional proceeds to fund construction. Item Year Issued Original Amount Final Year Amount Outstanding HVAC System 2012 $1,100,000 2027 $583,725 A-11 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. *As of February 2021 Annual Debt Payments 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. *Excludes payments made prior to the closing date of the Bonds. Amount Estimated Share of the City Jurisdiction Outstanding* Amount Percentage Salina Airport Authority $ 20,175,000 $ 18,750,000 100.00% Saline County 216,812 627,786 73.88 Unified School District No. 305 631,812 104,270,000 93.07 $116,258,272 Existing Bonds Series 2021-A Bonds Year Principal Interest Principal Interest Total 2021 $5,545,000 $997,026 - - $6,542,026 2022 5,705,000 1,803,571 $225,000 $291,200 8,024,771 2023 5,575,000 1,589,201 320,000 195,750 7,679,951 2024 5,390,000 1,379,556 335,000 182,950 7,287,506 2025 5,085,000 1,233,431 350,000 167,875 6,836,306 2026 4,380,000 1,090,661 365,000 152,125 5,987,786 2027 4,155,000 963,778 380,000 135,700 5,634,478 2028 3,865,000 846,594 395,000 118,600 5,225,194 2029 3,595,000 735,686 415,000 100,825 4,846,511 2030 3,135,000 636,324 425,000 92,525 4,288,849 2031 3,055,000 547,121 430,000 84,025 4,116,146 2032 2,975,000 458,676 440,000 75,425 3,949,101 2033 2,960,000 373,662 445,000 66,625 3,845,287 2034 2,780,000 288,206 460,000 57,725 3,585,931 2035 2,565,000 208,363 470,000 50,250 3,293,613 2036 1,860,000 136,075 475,000 42,613 2,513,688 2037 1,240,000 83,175 330,000 34,300 1,687,475 2038 725,000 43,950 335,000 27,700 1,131,650 2039 740,000 22,200 345,000 21,000 1,128,200 2040 - - 350,000 14,100 364,100 2041 - - 355,000 7,100 362,100 $65,330,000 $13,437,258 $7,645,000 $1,918,413 $88,330,669 A-12 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2020 $65,330,000 12.79% 1.96% 46,550 $1,403.44 2019 58,170,000 11.53 1.78 46,550 $1,261.22 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 $7,000,000 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. 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 the contamination. A remedial investigation and feasibility study (RI/FS) was undertaken to determine the extent and severity of the contamination and to determine the best method of remediation. Based on the RI/FS, the Kansas Department of Health and Environment (KDHE) issued a Corrective Action Decision (CAD) on July 29, 2019. The Salina Public Entities and the U.S. Department of Justice (DOJ) reached a settlement of the litigation ultimately documented in the form of a Consent Decree filed in U.S. District Court on November 23, 2020. Pursuant to the Consent Decree, the Salina Public Entities assumed responsibility for the Response Action in the CAD in exchange for a $65.9 million lump sum settlement payment by the United States to the Salina Public Entities. The settlement payment was received by the City on behalf of the Salina Public Entities in February 2021. The Salina Public Entities currently expect that the settlement payment will be sufficient to complete the Response Action required by the CAD. Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. A-13 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 September 20 if the City must conduct a public hearing to levy taxes in excess of its revenue neutral rate 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. In 2021, the Kansas Legislature passed legislation (the “Revenue Neutral Tax Act”) that repeals the “tax lid” (formerly K.S.A. 79-2925c) and provides that, beginning January 1, 2021, a taxing subdivision (which includes any political subdivision of the State that levies an ad valorem property tax, including the City) is not authorized to levy a property tax rate in excess of its revenue neutral rate without first providing notice, holding a public hearing, and authorizing such property tax rate by majority vote of its governing body. The revenue neutral rate means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year using the current tax year’s total assessed valuation. The Revenue Neutral Tax Act provides that by June 15 of every year, each county clerk shall calculate the revenue neutral rate for each taxing subdivision in their respective county. If a taxing subdivision desires to levy a tax rate in excess of its revenue neutral rate, it must first publish notice of a public hearing and notify the county clerk of the taxing subdivision’s intent to exceed the revenue neutral rate. The county clerk is required to provide notice of the public hearing to each taxpayer with property in the taxing subdivision, along with following information concerning the taxing subdivision: (1) the revenue neutral rate, (2) the proposed property tax revenue needed to fund the proposed budget, (3) the proposed tax rate based on the proposed budget, (4) the tax rate and property tax of each taxing subdivision on the taxpayer’s property from the previous year’s tax statement, (5) the appraised value and assessed value of the taxpayer’s property, (6) estimates of the tax for the current tax year on the taxpayer’s property based on the revenue neutral rate of each taxing subdivision and any proposed tax rates that exceed the revenue neutral rates, (7) the difference between the estimates of tax based on the proposed tax rate and the revenue neutral rate. The public hearing regarding exceeding the revenue neutral rate is to he held between August 10 and September 10, and can be held in conjunction with the taxing subdivision’s budget hearing. A-14 If multiple taxing subdivisions within the county are required to hold a public hearing, the notices to the taxpayer can be combined into a single notice. After the public hearing, the taxing subdivision can approve exceeding the revenue neutral rate by a majority vote of its governing body, and the amount of tax to be levied must be certified to the county clerk by September 20. The taxing subdivision’s adopted budget shall not result in a tax rate in excess of its proposed rate stated in the notice provided to the taxpayers. If a taxing subdivision fails to comply with the requirements of the Revenue Neutral Tax Act, it shall refund to the taxpayers any property taxes over collected based on the amount of the levy that was in excess of the revenue neutral rate. The City cannot predict the impact of the Revenue Neutral Tax Act on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. 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, 2019 is attached hereto as APPENDIX C. The unaudited financial statements of the City for the Fiscal Year ended December 31, 2020 are attached hereto as APPENDIX D. There can be no guarantee that the information included in such unaudited financial statements will not materially change when subject to audit. 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. A-15 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: 2016 2017 2018 2019 Property Taxes $9,217,596 $10,115,784 $9,743,497 $10,801,226 Sales Tax 12,780,891 12,906,032 32,900 13,418,742 Other Taxes 6,347,717 5,215,264 5,444,880 5,086,492 Intergovernmental 1,301,106 1,133,310 1,144,717 1,351,967 Charges for Services 6,472,698 6,153,450 6,366,094 5,816,485 Investment Revenue 102,045 3,336 45,477 613,249 Miscellaneous 507,330 1,709,491 452,916 609,676 Total Revenues $36,729,383 $37,236,667 $36,490,207 $37,778,837 Expenditures: General Government $5,422,010 $5,423,241 $5,648,579 $4,581,505 Public Safety 21,664,398 21,628,730 22,952,925 23,692,445 Public Works 5,066,426 5,328,315 5,350,056 5,473,414 Public Health and Sanitation 703,606 749,656 793,780 816,636 Culture and Recreation 4,147,736 4,424,221 4,494,713 4,379,441 Planning and Development 980,950 752,825 766,471 836,690 Capital Outlay 1,098,587 896,026 860,115 985,861 Total Expenditures $39,083,713 $39,203,014 $40,866,639 $40,765,992 Revenues Over (Under) $(2,354,330) $(1,966,347) $(4,376,432) $(2,987,155) Other Sources (Uses) 2,546,500 3,816,500 4,236,500 5,551,752 Net Change in Fund Balance 192,170 1,850,153 $(139,932) 2,564,597 Fund Balance January 1 $4,840,186 $5,032,356 $6,882,509 $6,742,577 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $5,032,356 $6,882,509 $6,742,577 $9,307,174 Assessed Valuation According to the Saline County Clerk’s Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Property* Utilities Vehicle Valuation 2020 $423,573,121 $9,353,057 $23,436,340 $54,589,132 $510,951,650 2019 421,108,311 11,245,813 22,113,195 54,687,311 509,154,630 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 *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. A-16 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. Residential Real Estate Estimated Year Equalization Ratio Actual Value 2020 N/A $3,326,521,997 2019 11.44% 3,294,115,685 2018 11.17 3,150,409,123 2017 11.04 3,097,885,103 2016 11.36 3,046,949,034 2015 11.28 2,968,008,193 Special Assessments 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. 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. A-17 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 % 2020* 30.650 $15,311,674 $8,762,996 56.9% $8,552,180 56.9% 2019 29.720 14,949,484 14,538,092 97.2 14,732,831 98.6 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 *Represents collections through December 31, 2020. Tax Levies Nov 2016 Levy Nov 2017 Levy Nov 2018 Levy Nov 2019 Levy Nov 2020 Levy City of Salina 27.603 26.129 28.394 29.720 30.650 Salina Library 5.893 5.989 6.014 5.913 5.880 State Education & Other 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 55.743 56.501 57.522 55.508 55.454 Airport Authority 4.396 4.225 4.998 4.447 5.037 Central Kansas Extension District 1.510 1.475 1.476 1.198 1.206 Saline County 37.508 37.321 38.437 41.097 40.606 Total 134.153 133.140 138.341 139.383 140.333 A-18 Largest Taxpayers According to the Saline County Clerk’s Office, the following table lists the largest taxpayers in the City, their November 2020 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 $19,659,775 3.85% SFC Global Supply Chain Inc Manufacturing 5,927,488 1.16 Kansas Gas Service Utility 5,415,618 1.06 RAF Salina LLC Retail Shopping Center 4,680,507 0.92 S&B Motels Inc Motel 3,010,427 0.59 Central Mall Realty Holding LLC Retail Shopping Center 2.851,701 0.56 Union Pacific Railroad Co. Railroad 2,565,902 0.50 Menard Inc. Home Improvement Store 2,427,090 0.48 Individual Residential 2,367,201 0.46 Sam’s Real Estate Business Trust/Walmart Discount Store 2,195,047 0.43 Total $51,100,756 10.00% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Year Value 2021* $830,841 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 *Through January 2021 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. Except as set forth below, 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 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”). The 2016 sales tax replaced an existing sales tax of .40%. A-19 In November of 2020, the voters of Saline County approved an additional 0.5% countywide local option sales tax, the revenues derived from which are dedicated to paying the costs of a new Criminal Justice Complex, such sales tax shall terminate when all costs associated with the Criminal Justice Complex project have been paid, including the retirement of any bonds issued therefor (the “2020 Sales Tax”). No portion of the revenues derived from the 2020 Sales Tax will be distributed to the City. The total sales tax for goods and services in the City is 9.25%, which consists of 6.5% imposed by the State, 1.5% 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. City’s Portion of Citywide 1% Countywide Local Option Local Option Year Sales & Use Tax Receipts Sales & Use Tax Receipts 2021(1) $2,752,128 $1,415,232 2020 15,160,656 7,756,909 2019 14,922,405 7,608,604 2018 14,632,584 7,415,804 2017 14,404,702 7,368,869 2016 10,458,630 7,312,618 2015 10,372,573 7,376,708 (1) As of February 2021 (2) Collections 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. 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. A-20 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 11.5% Commercial and Industrial- Real Property 25.0 Agricultural Land (1) 30.0 Agricultural Improvements 25.0 Vacant Lots 12.0 Not-for-Profit (2) 12.0 All Other 30.0 Personal Property: (3) Mobile Homes 11.5% Mineral Leaseholds (large) 30.0 Mineral Leaseholds (small) 25.0 Commercial & Industrial Machinery & Equipment 25.0 All Other 30.0 Utilities: Railroads federally mandated rate All Other Public Utilities 33.0% Motor Vehicles: 20.0% Property Exempt: Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans’ organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. A-21 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 2019 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.44%, and commercial and industrial property was 24.25%. APPENDIX B Form of Continuing Disclosure Undertaking Gilmore & Bell, P.C. 04/12/2021 CONTINUING DISCLOSURE UNDERTAKING $7,645,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-I DATED APRIL 29, 2021 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2021 (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, 2021, 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)(1) 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. 2 “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 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 Issuer’s Fiscal Year, commencing with the Fiscal Year ending December 31, 2020, 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. 3 (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, 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 4 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 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 5 change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this 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.] 600596.20217\CDU-SALINA 2021-A, 2021-1 S-1 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 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 APPENDIX C December 31, 2019 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, 2019, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. COMPREHENSIVE ANNUAL FINANCIAL REPORT 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box 736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2019 Prepared by Department of Finance and Administration of City of Salina, Kansas CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal i - iv Organizational Chart v List of Principal Officials vi FINANCIAL SECTION Independent Auditor’s Report 1 - 3 Management's Discussion and Analysis 4 - 15 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements Balance Sheet - Governmental Funds 18 Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities 19 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 20 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities 21 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund 22 Tourism and Convention Fund 23 Special Gas Fund 24 Sales Tax Capital Fund 25 Statement of Net Position - Proprietary Funds 26 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 27 Statement of Cash Flows - Proprietary Funds 28 - 29 Statement of Assets and Liabilities - Agency Funds 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Notes to the Basic Financial Statements 31 - 70 Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 71 Other Postemployment Benefits - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 72 KPERS Pension Plan Schedule of City’s Proportionate Share of the Net Pension Liability 73 Schedule of City Contributions 73 Combining Statements and Individual Fund Schedules Combining Statements - Nonmajor Funds Fund Descriptions 74 - 75 Combining Balance Sheet - Nonmajor Governmental Funds 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 77 Combining Balance Sheet - Nonmajor Special Revenue Funds 78 - 79 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds 80 - 81 Combining Balance Sheet - Nonmajor Permanent Funds 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Permanent Funds 83 Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund 84 Business Improvement District Fund 85 Neighborhood Park Fund 86 Special Parks and Recreation Fund 87 Special Alcohol Fund 88 Sales Tax Economic Development Fund 89 Arts & Humanities Fund 90 Debt Service Fund 91 Solid Waste Disposal Fund 92 Water and Sewer Fund 93 Sanitation Fund 94 Golf Course Fund 95 Workers’ Compensation Reserve Fund 96 Health Insurance Fund 97 Central Garage Fund 98 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2019 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED Internal Service Fund Descriptions 99 Combining Statement of Net Position - Internal Service Funds 100 Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds 101 Combining Statement of Cash Flows - Internal Service Funds 102 - 103 Fiduciary Fund Descriptions - Agency Funds 104 Combining Balance Sheet - Agency Funds 105 Combining Statement of Changes in Assets and Liabilities - Agency Funds 106 Schedule STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years 1 107 Changes in Net Position - Last Ten Fiscal Years 2 108 Fund Balances, Governmental Fund - Last Ten Fiscal Years 3 109 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 4 110 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years 5 111 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 6 112 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years 7 113 Principal Property Taxpayers 8 114 Property Tax Levies and Distributions 9 115 Direct Sales Rate by Taxing Entity 10 116 Water Sales by Class of Customer 11 117 Ratio of Outstanding Debt by Type 12 118 Ratio of Net General Bonded Debt Outstanding 13 119 Direct and Overlapping Governmental Activities Debt 14 120 Legal Debt Margin 15 121 Pledged Revenue Coverage 16 122 Demographic and Economic Statistics 17 123 Principal Employers 18 124 INTRODUCTORY SECTION DEPARTMENT OF FINANCE TELEPHONE (785) 309-5735 AND ADMINISTRATION FAX (785) 309-5738 300 West Ash, P.O. Box 736 TDD (785) 309-5747 Salina, Kansas 67402-0736 Website: www.salina-ks.gov June 30, 2020 To the Citizens of the City of Salina, Kansas: The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2019, is hereby submitted. The City’s Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City’s accounting system and budgetary controls, and a brief discussion of the City’s economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor’s report, Management’s discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management’s Discussion and Analysis (MD&A) which immediately follows the independent auditor’s report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City’s comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2019 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to ensure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and i transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920.The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The population of the City reported by the 2010 decennial census was 47,707. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown core of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, ElDorado National, and Schwan’s Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to “trade pull factor.” According to the Kansas Department of Revenue’s Annual City Trade Pull Factor report, Salina had a pull of factor of 1.47 in 2019. The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2019. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2018 as compared to 2016. In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2019 the Alley Entertainment Center opened for business and the majority of the City’s Downtown Streetscape project was completed. The new downtown hotel began construction in 2019 and is anticipated to open in July 2020. Other major projects that were on going included gutter and paving on North 9th Street, South Well Field improvements, continued improvements to the water distribution system and preliminary design on the Smoky Hill River Renewal and construction of the Police Training Center project. ii The City continues to address fiduciary pressures generated by a recessionary economy and the more recent financial impacts of the Covid-19 pandemic. General adjustments to the pay plan for cost of living changes at a rate of 2.0% were implemented in 2019. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of “routine” capital—including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: *2019 2020 2021 2022 2023 Sales tax $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 4,395,000 $ 4,250,000 Water & wastewater fund ---- 2,000,000 2,000,000 2,000,000 General obligation bonds 5,225,000 19,700,000 ---- Revenue Bonds/Loans 11,255,000 6,000,000 28,000,000 -- Other sources 785,800 -------- $ 21,645,800 $ 30,085,000 $34,390,000 $6,395,000 $ 6,250,000 Major projects budgeted in 2019 included a Landfill Cell Construction and the implementation of automated Sanitation collection. The Landfill project was completed; however, the Sanitation project has been delayed until late 2020 or early 2021. The significant increases in 2020 and 2021 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project and Wastewater Treatment Plant respectively. Due to uncertain Sales Tax recovery post Covid-19, the River Renewal project has been delayed. No major projects have been planned for 2022 and 2023 until financial resources for those years can be further evaluated. *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning iii 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Ensure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the GordonCPA auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. Sincerely, Michael D. Schrage City Manager iv &LW\RI6DOLQD CITIZENS CITY COMMISSION Mike Hoppock, Mayor Melissa Hodges Trent Davis Karl Ryan Rod Franz City Manager Michael Schrage Deputy City Manager Jacob Wood Development Services Lauren Driscoll Risk Management Legal Services Clark Mize & Linville Chartered* Greg Bengtson Computer Technology vacant Police Brad Nelson Fire Kevin Royse Public Works Jim Kowach Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Fire Administration Fire Suppression Fire Prevention EMS Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Administration Patrol Division Support Division Investigative Division Finance/Administration Debbie Pack City Clerk Water Customer Accounting Finance Smoky Hill Museum Arts & Humanities Brad Anderson Human Resources Natalie Fischer P/OrgCharts/Organizational Chart-Public-2020 Parks & Recreation Chris Cotten Utilities Martha Tasker Municipal Court Building Services Neighborhood Services Planning & Zoning Community Relations Parks Division Recreation Division Golf Course Facility Maintenance Animal Services Bicentennial Center Continuous Process Improvement Scott Gardner * Contract Position v vi City of Salina, Kansas List of Principal Officials City Commission Mike Hoppock, Mayor Melissa Rose Hodges, Vice Mayor Trent Davis, Commissioner Karl Ryan, Commissioner Rod Franz, Commissioner City Executive Staff Michael Schrage, City Manager Jacob Wood, Deputy City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotten, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities Scott Gardner, Continuous Process Improvement ),1$1&,$/ SECTION 1 INDEPENDENT AUDITOR’S REPORT Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 4% and 1%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $46,899,592 as of December 31, 2019 and total revenues of $2,432,958 for the year then ended, and the Housing Authority of the City of Salina, which statements reflect total assets and deferred outflows of resources of $7,393,221 as of June 30, 2019 and total revenues of $2,620,347 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina, is based solely on the reports of the other auditors. 2 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2019, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2018, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2019, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. The financial statements of the City of Salina, Kansas, as of December 31, 2018, were audited by other auditors whose report dated September 29, 2019, expressed an unmodified opinion on those statements. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15, the other postemployment benefit schedules on page 71 and 72, the schedule of the City’s proportionate share of the net pension liability on page 73, and the schedule of City contributions on page 73 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 3 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Gordon CPA LLC Certified Public Accountant Lawrence, Kansas June 30, 2020 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 This section of the report contains an overview and analysis of the City of Salina’s financial statements for the fiscal year ended December 31, 2019. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City’s financial condition. Financial Highlights On an accrual basis, the City’s government-wide net position increased $8.1 million from current operations with net position increases of $4.9 million and $3.2 million in governmental activities and business-type activities, respectively. At the close of 2019, the City’s governmental funds reported combined ending fund balances of $15.8 million, a decrease of $3.3 million from the prior year. This primarily resulted capital project expenditures in the Capital Projects Fund. The General Fund balance increased $2.6 million over the prior year. At the close of 2019, the City’s enterprise funds reported a combined ending Net Position of $93.6 million, an increase of $3.2 million over prior year. Positive performance was shared by the Water and Sewer Fund, the Sanitation Fund, and the Golf Fund, with the Water and Sewer Fund providing the bulk of the change ($2.7 million). The Solid Waste Disposal Fund saw a negative performance as a result of additional costs related to the opening of the Drive Thru Recycling Center. Revenues from governmental activities decreased by $7.0 million from the prior year and revenues from business type activities increased $.7 million from the prior year. Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader’s understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City’s operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City’s assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City’s overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City’s financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long-term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an “Other Governmental Funds” column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City’s financial statements. 5 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund’s budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City’s operations and economy. The City as a Whole This section will identify, discuss, and analyze significant differences and trends that will enhance the reader’s understanding of the City’s financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($37.2 million) of the City’s revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services remained flat from the prior year with the sanitation fund increasing $319K (10.0%), water and sewer fund increasing $306K (1.5%) and governmental activities decreasing $700K in public safety. The increase in charges for services in the sanitation fund and the increase in the water and sewer fund are a result of an increase in user fees. Sales taxes are the next largest component of the revenue mix, providing 25.7% ($22.7 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1% sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. The City is affected by the formula used to distribute the County-wide sales tax among participating jurisdictions (only Cities and the County participate, School and other special districts do not). The formula is based, in part, on the property tax efforts of each jurisdiction. As the portion of the overlapping levy attributable to the City of Salina changes so does the City’s allocated portion of the County-wide sales tax. This change is recognized bi-annually and can affect the overall allocation of the City’s portion of the County-wide sales tax. In 2019, this allocation increased slightly which did not have a significant impact on the tax revenues. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax was to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 15.6% ($13.8 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by 4.0%. The total City mill levy increased by 8.6%. The overlapping levy increased in 2019 by 3.3%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $9.3 million from its peak of $39.7 million in 2007. At the 2019 tax rate, this exemption is equivalent to over $857K in annual lost revenue. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Motor vehicle value increased 4.6%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year 2019 2018 Change Real Estate and Personal Property Assessed Valuation 454,395,369$434,451,245$19,944,124$ City Mill Levy ($ per $1,000) Operating (General Fund)22.285 20.339 1.946 Debt Service 6.109 5.79 0.319 Total City Rate 28.394 26.129 2.265 Total Overlapping Levy 138.341 133.14 5.201 Percent of Total Taxes Collected 97.4% 95.9% 1.5% Ratio of Total Taxes (including delinquent collections) to Taxes Levied 98.6% 98.4% 0.2% Motor Vehicle Valuation 54,687,311$ 53,336,677$ 1,350,634$ Comparative Property Values and Tax Levy Rates The unemployment rate in Salina decreased slightly from 3.3% at the end of 2018 to 2.9% at the end of 2019, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force decreased slightly to 30,094 from 30,174 in 2018. In 2019, the top ten property taxpayers accounted for 10.05% of total assessed value. This is less concentrated than ten years ago (at 14.70%). Statement of Net Position Net position may, over time, provide an indicator of a government’s financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $231.9 million at December 31, 2019. This represents an increase in net assets of $8.1 million over 2018. A comparative Condensed Statement of Net Position at December 31, 2019 and 2018: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 2019 2018 2019 2018 2019 % of Total 2018 % of Total 2019-2018 change Cash and investments 31,406$ 34,302$ 34,957$ 32,140$ 66,363$ 16% 66,442$ 17% (79)$ Other current assets 17,201 16,774 2,512 2,630 19,713 5% 19,404 5% 309 Noncurrent (capital) assets 222,258 210,515 101,079 90,181 323,337 79%300,696 78%22,641 Total assets 270,865 261,591 138,548 124,951 409,413 100%386,542 100%22,871 Total deferred outflows of resources 5,073 5,527 546 802 5,619 100%6,329 100%(710) Total assets and deferred outflows of resources 275,939 267,118 139,094 125,753 415,033 392,871 22,162 Current liabilities 23,971 28,623 3,579 3,814 27,550 16% 32,437 21% (4,887) Noncurrent liabilities 98,696 90,931 41,765 31,332 140,461 84%122,263 79%18,198 Total liabilities 122,667 119,554 45,344 35,146 168,011 100%154,700 100%13,311 Total deferred inflow s of resources 14,913 14,113 198 224 15,112 14,337 775 Net position: Net investment in capital assets 151,527 144,845 63,301 62,368 214,828 92% 207,213 93% 7,615 Restricted for permanent funds 528 514 - - 528 0% 514 0% 14 Restricted for debt service 1,142 1,851 1,368 1,512 2,510 1% 3,363 2% (853) Unrestricted (14,839) (13,759) 28,883 26,503 14,044 6%12,744 6%1,300 Total net position 138,359 133,451 93,552 90,383 231,910 100%223,834 100%8,076 Percent of total net position 60% 60% 40% 40% 100%100% Cash and investments as a percentage of current liabilities 131% 120% 977% 843% 241%205% Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-Type Activities Total Primary Government The largest segment of the City’s net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City’s obligations to citizens and creditors. In 2019, the amount of net investment in capital assets increased by $7.6 million. Amount restricted for debt service decreased by $853 thousand. Unrestricted increased by $1.3 million. Outside of these changes, 2019 resulted in a $8.1 million increase to the net position. Total liabilities increased in governmental activities and increased in business-type activities. In governmental activities, current liabilities decreased, and non-current liabilities increased primarily due to an increase general obligation bonds. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Statement of Activities A Condensed Statement of Activities is shown below: 2019 2018 2019 2018 2019 % 2018 % 2019-2018 Change Program Revenues: Charges for Services 9,730$ 10,411$ 27,423$ 27,061$37,153$ 42% 37,472$ 43% (319)$ Operating Grants and Contributions 4,540 4,300 - - 4,540 5% 4,300 5% 240 Capital Grants and Contributions - 4,635 - - - 0% 4,635 0% (4,635) General Revenues: Property Taxes 13,774 12,508 - - 13,774 16% 12,508 15% 1,266 Sales Taxes 22,742 22,209 - - 22,742 26% 22,209 25% 533 Other Taxes 6,975 7,240 - - 6,975 8% 7,240 8% (265) Investment Revenue 670 183 - 233 670 1% 416 0% 254 Other Miscellaneous 1,168 1,062 847 153 2,015 2%1,215 2%800 Total Revenues:59,599 62,548 28,269 27,447 87,869 100%89,995 100%(2,126) Expenses: General Government 10,866 12,013 - - 10,866 14% 12,013 15% (1,147) Public Safety 25,358 23,892 - - 25,358 32% 23,892 30% 1,466 Public Works 10,528 10,458 - - 10,528 13% 10,458 13% 70 Public Health and Sanitation 1,156 1,256 - - 1,156 1% 1,256 2% (100) Culture and Recreation 6,879 7,040 - - 6,879 9% 7,040 9% (161) Planning and Development 2,522 2,369 - - 2,522 3% 2,369 3% 153 Solid Waste Disposal - - 2,871 2,382 2,871 4% 2,382 3% 489 Water and Sewer - - 14,294 15,190 14,294 18% 15,190 19% (896) Sanitation - - 2,266 2,419 2,266 3% 2,419 3% (153) Golf Course - - 888 926 888 1% 926 1% (38) Interest on Long Term Debt 2,169 2,117 - - 2,169 3%2,117 3%52 Total Expenses 59,479 59,145 20,319 20,917 79,798 100%80,062 100%(264) Increase in net assets before transfers 121 3,403 7,950 6,530 8,071 9,933 (1,862) Transfers and other extraordinary items 4,782 4,831 (4,782) (4,832) - (1) 1 Change in Net Position 4,902 8,234 3,169 1,698 8,071 9,932 (1,861) Net Position January 1 133,452 123,701 90,383 89,083 223,835 212,784 11,051 Prior Period Adjustment 4 1,518 -(398)4 1,120 (1,116) Net Position January 1, restated 133,456 125,219 90,383 88,685 223,839 213,904 9,935 Net Position December 31 138,359$133,453$93,552$90,383$231,910$223,836$8,074$ Condensed Statement of Activities For the Year Ended December 31 Governmental Activities Business-Type Activities Total Primary Government (In $000) 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Governmental Activities. Charges for services attributable to governmental activities totaled $9.7 million, and operating grants for those purposes were $4.5 million. Charges for services decreased slightly and capital grants increased from the prior year, while operating grants decreased. The balance was funded by general revenues. Sales taxes accounted for $22.7 million of general revenues, with property taxes providing $13.8 million. The net position increased by $4.9 million as a result of governmental activities. This increase was primarily related to the increase in sales and other taxes. Total expenses for governmental activities for the year ending December 31, 2019 were $59.5 million compared to $59.1 million in 2018. Governmental activities represent 75%of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 32% of the total. Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $20.3 million, or 24% of the City’s total expenses. The majority of this expense ($14.3 million) is attributable to water and sewer operations, with the other activities costing a combined total of $6.0 million. Net position increased by $3.2 million. This increase was primarily related to the increase in water and sewer fund revenues and a decrease in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2019 and December 31, 2018. Fund 2019 2018 Change General 9,307$ 6,743$ 2,564$ Tourism and Convention 451 458 (7) Special Gas 2,191 1,532 659 Sales Tax Capital 2,406 1,984 422 Schilling Capital Improvement 1,949 2,136 (187) Debt Service 1,142 1,851 (709) Capital Projects (7,652) (694) (6,958) SFH QalicB 1,310 1,218 92 Other Governmental Funds 4,671 3,861 810 15,776$19,089$ (3,313)$ Governmental Fund Balances as of December 31, (in 000's) Total governmental fund balances decreased by $3.3 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund decrease was largely the result of the use of funds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2019 and 2018. Fund 2019 2018 Change Revenues (Including Other Financing Sources) General 44,228$ 41,532$ 2,696$ Tourism and Convention 1,889 1,795 94 Special Gas 2,027 1,653 374 Sales Tax Capital 8,501 8,225 276 Schilling Capital Improvement 21 15 6 Debt Service 6,241 6,602 (361) Capital Projects 11,871 13,555 (1,684) SFH QalicB 499 504 (5) Other Governmental Funds 4,745 4,161 584 Total Revenues 80,021 78,042 1,979 Less Other Sources (21,247)(21,622)375 Revenues, net of other sources 58,774$ 56,420$ 2,354$ Expenditures (Including Other Finacing Uses) General 41,664$ 41,672$ (8)$ Tourism and Convention 1,896 1,550 346 Special Gas 1,368 1,203 165 Sales Tax Capital 8,060 8,324 (264) Schilling Capital Improvement 208 904 (696) Debt Service 6,950 6,955 (5) Capital Projects 18,830 15,144 3,686 SFH QalicB 407 1,001 (594) Other Governmental Funds 3,954 4,653 (699) Total Expenditures 83,335 81,406 1,929 Less Other Uses (5,073) (4,186) (887) Expenditures, net of other uses 78,262$ 77,220$ 1,042$ Total revenues, including other sources, were up $2.4 million compared to 2018, with the General Fund showing the largest increase between the two years, which was $2.7 million. Total expenditures increased $1.9 million over 2018. The majority of that increase was in the Capital Projects Fund as a result of increased spending on projects, specifically the Downtown Streetscape and Police Training Facility projects. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: 2019 2018 Change 2019 2018 Change Current Assets 7,073$ 6,569$ 504$ 28,307$ 26,338$ 1,969$ Capital Assets 1,497 2,350 (853) 97,956 86,535 11,421 Deferred Outflows 67 72 (5)371 610 (239) Total Assets and deferred outflows 8,636$ 8,991$ (355)$ 126,634$ 113,483$ 13,151$ Current Liabilities 103$ 461$ (358)$ 3,273$ 3,183$ 90$ Noncurrent Liabilities 2,865 2,847 18 38,016 27,576 10,440 Deferred Inflows 28 30 (2)126 144 (18) Total Liabilities 2,995$ 3,338$ (343)$ 41,415$ 30,903$ 10,512$ Net investment in capital assets 1,107$ 1,570$ (463)$ 60,568$ 59,502$ 1,066$ Restricted - - - 1,368 1,512 - Unrestricted 4,534 4,083 451 23,283 21,566 1,717 Total Net Position 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ Current Assets as a percentage of current liabilities 6885% 1425% 865% 827% 2019 2018 Change 2019 2018 Change Current Assets 2,012$ 1,747$ 265$ 77$ 116$ (39)$ Capital Assets 1,165 886 279 462 410 52 Deferred Outflows 84 92 (8)25 27 (2) Total Assets 3,261$ 2,725$ 536$ 563$ 553$ 10$ Current Liabilities 137$ 106$ 31$ 66$ 64$ 2$ Noncurrent Liabilities 668 684 (16)215 225 (10) Deferred Inflows 35 38 (3)10 11 (1) Total Liabilities 840$ 828$ 12$ 291$ 300$ (9)$ Net investment in capital assets 1,165$ 886$ 279$ 462$ 410$ 52$ Restricted - - - - - - Unrestricted 1,256 1,011 245 (187)(103)(84) Total Net Position 2,421$ 1,897$ 524$ 275$ 307$ (32)$ Current Assets as a percentage of current liabilities 1469% 1648% 117% 181% Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Disposal Water and Sewer Sanitation Golf Course 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with three of the four funds reflecting increases in net position. 2019 2018 Change 2019 2018 Change Operating Revenues 3,499$ 3,116$ 383$ 20,588$ 20,207$ 381$ Operating Expenses 2,849 2,353 496 13,013 14,348 (1,335) Operating Income 649 763 (114) 7,575 5,859 1,716 Non-operating revenues (expenses)(22)17 (39)(1,281)(667)(614) Income (Loss) before Transfers 627 780 (153) 6,294 5,192 1,102 Transfers in (out)(640)(690)50 (3,650) (3,650) - Change in Net Position (13)90 (103)2,644 1,542 1,102 Net Position January 1 5,653 6,237 (584) 82,580 80,697 1,883 Restatement -(674)674 (5)341 (346) Net Position January 1, restated 5,653 5,563 90 82,575 81,038 1,537 Net Position December 31 5,640$ 5,653$ (13)$ 85,219$ 82,580$ 2,639$ 2019 2018 Change 2019 2018 Change Operating Revenues 3,276$ 3,006$ 270$ 907$ 884$ 23$ Operating Expenses 2,266 2,419 (153)888 926 (38) Operating Income 1,010 587 423 19 (42) 61 Non-operating revenues (expenses)-11 (11)-661 (661) Income (Loss) before Transfers 1,010 598 412 19 619 (600) Transfers in (out)(492)(492)1 - - - -- Change in Net Position 519 106 413 19 619 (600) Net Position January 1 1,897 1,856 41 253 292 (39) Restatement 5 (66)71 -2 (2) Net Position January 1, restated 1,902 1,790 112 253 294 (41) Net Position December 31 2,421$ 1,896$ 525$ 272$ 913$ (641)$ Comparative Summary of Revenues, Expenses and Changes in Net Position for the Year Ended December 31 (In $000's) Solid Waste Disposal Water and Sewer Sanitation Golf Course 13 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Budgetary Highlights The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2019. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2019 was $323,337,161, net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2019 and 2018: 2019 2018 2019 2018 2019 2018 Equipment, Furniture and Fixtures 2,352$ 2,374$ 1,536$ 1,489$ 3,888$ 3,863$ Vehicles 2,854 2,957 1,288 1,208 4,142 4,165 Buildings and Improvements 30,556 31,759 8,519 8,941 39,075 40,700 Land 24,224 24,094 2,386 2,060 26,610 26,154 Land Leased Under Capital Assets 423 423 - - 423 423 Infrastructure 116,264 116,365 79,824 72,312 196,088 188,677 Leasehold Improvements 357 326 - - 357 326 Construction in Progress 45,228 32,217 7,527 4,171 52,755 36,388 Total 222,258$210,515$101,079$90,181$323,337$300,696$ Capital Asset Balances Net of Depreciation as of December 31 (In 000's) Governmental Activity Business-type Activity Total Changes to capital assets may be summarized as follows: Governmental Activity Business-Type Activity Total Additions 22,005$ 26,293$ 48,298$ Retirements (4,622) (11,402) (16,024) Depreciation (6,835)(4,815)(11,651) Net Additions 10,548$ 10,075$ 20,623$ Changes to Capital Assets, 2019 (in 000's) Additional information on the City’s capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2019 Debt Management The City’s general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2019 totaled $57,623,908. In addition, there were temporary notes outstanding in the amount of $11,170,000, as well as a financing operating lease in the amount of $656,260. Business-type activities had $11,122,175 in revenue bonds outstanding, as well as $4,116,515 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $22,539,686. The City engaged in the following debt transactions during 2019: On July 30th, the City issued 2019-1, $6,000,000 of temporary notes. The proceeds were used to finance construction to Downtown Streetscape, Police Training Facility Design and 2 special assessment projects. On November 27th, the City issued 2019-2, $13,500,000 in temporary notes to pay off the 2019-1 notes as well as finance construction of the Downtown Streetscape and Police Training Facility. This note will be partially refinanced into a long-term bond issue in 2019 and partially in 2020. On November 27th, the City issued 2019A, $2,090,000 in General Obligation Bonds to finance construction costs for the Grand Prairie II and River Trail Second Addition special assessment projects, as well as to finance the Beechcraft Road project. On December 1, 2019, the City issued $18,520,000 in Senior Special Obligation Revenue Bonds and $4,320,000 in Subordinate Special Obligation Revenue Bonds to fund STAR Bond district projects. Additional information on the City’s debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 %$6,&),1$1&,$/67$7(0(176 Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments 31,406,384$ 34,956,928$ 66,363,312$ 2,222,111$ 655,020$ Receivables (net of allowance for uncollectibles) Accounts 2,080,843 2,033,882 4,114,725 12,159 848,249 Taxes 13,863,340 - 13,863,340 -- Interest 9,518 16 9,534 -- Inventory 339,878 477,644 817,522 30,954 - Restricted cash and investments 907,687 - 907,687 -- Prepaid expenses ---45,192 9,352 Total current assets 48,607,650 37,468,470 86,076,120 2,310,416 1,512,621 Noncurrent assets: Capital assets, nondepreciable Construction in progress 45,227,729 7,526,968 52,754,697 128,057 132,217 Land 24,646,334 2,386,334 27,032,668 1,483,219 10,166,125 Capital assets, depreciable 279,528,709 162,361,912 441,890,621 8,494,072 81,240,459 Less: Accumulated depreciation 127,144,929 71,195,896 198,340,825 5,084,636 47,428,034 Total noncurrent assets 222,257,843 101,079,318 323,337,161 5,020,712 44,110,767 Total assets 270,865,493 138,547,788 409,413,281 7,331,128 45,623,388 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 97,708 43,897 141,605 -4,220 OPEB deferred outflows of resources 62,171 7,919 70,090 -- Pension deferred outflows of resources 4,842,013 484,280 5,326,293 62,093 131,923 Deferred charge on bond issuance 71,376 9,925 81,301 -1,140,061 Total deferred outflows of resources 5,073,268 546,021 5,619,289 62,093 1,276,204 Total assets and deferred outflows of resources 275,938,761$ 139,093,809$ 415,032,570$ 7,393,221$ 46,899,592$ Liabilities: Current liabilities: Accounts payable 3,588,272$ 448,194$ 4,036,466$ 45,557$ 867,149$ Retainage payable 1,980,498 153,409 2,133,907 -- Accrued liabilities 649,172 - 649,172 36,478 145,241 Accrued interest payable 78,459 325,876 404,335 - 227,145 Deposits payable - 229,447 229,447 98,022 - Current portion of compensated absences 2,030,465 478,552 2,509,017 2,989 - Current portion of temporary notes payable 11,170,000 - 11,170,000 -- Current portion of loans payable - 539,863 539,863 -- Current portion of revenue bonds payable - 715,000 715,000 -- Current portion of special assessment debt payable ----2,350 Current portion of general obligation bonds payable 4,474,480 688,388 5,162,868 -1,425,000 Total current liabilities 23,971,346 3,578,729 27,550,075 183,046 2,666,885 Noncurrent liabilities: Accrued liabilities 151,818 - 151,818 39,222 - Compensated absences 755,612 178,087 933,699 26,893 - Security deposits returnable ----57,564 OPEB obligation 3,121,647 397,680 3,519,327 - 13,338 KPERS OPEB obligation 349,412 156,983 506,395 8,186 - Net pension liability 28,968,806 3,148,126 32,116,932 331,750 632,856 Loans payable 12,199,016 21,999,823 34,198,839 -- Revenue bonds payable - 10,407,175 10,407,175 -- Special assessment debt payable ----2,455 General obligation bonds payable 53,149,428 3,428,127 56,577,555 - 20,982,297 Landfill post-closure care liabilities -2,048,896 2,048,896 -- Total noncurrent liabilities 98,695,739 41,764,897 140,460,636 406,051 21,688,510 Total liabilities 122,667,085 45,343,626 168,010,711 589,097 24,355,395 Deferred inflows of resources: Unavailable revenue - property taxes 13,423,860 - 13,423,860 8,599 - KPERS OPEB deferred inflows of resources 66,990 30,097 97,087 2,476 - OPEB deferred inflows of resources 146,354 18,645 164,999 -4,694 Pension deferred inflows of resources 1,275,958 149,620 1,425,578 15,791 36,718 Total deferred inflows of resources 14,913,162 198,362 15,111,524 26,866 41,412 Total liabilities and deferred inflows of resources 137,580,247$ 45,541,988$ 183,122,235$ 615,963$ 24,396,807$ Net Position Net investment in capital assets 151,527,232$ 63,300,942$ 214,828,174$ 5,020,712$ 21,698,665$ Restricted for: Permanent funds: Expendable 527,536 - 527,536 11,334 - Debt service 1,142,418 1,367,894 2,510,312 -- Unrestricted [14,838,672] 28,882,985 14,044,313 1,745,212 804,120 Total net position 138,358,514$ 93,551,821$ 231,910,335$ 6,777,258$ 22,502,785$ Primary Government CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2019 Component Units The notes to the basic financial statements are an integral part of this statement. 16 Operating Capital Total Total Total Salina Salina Charges for Grants and Grants and Governmental Business-type Primary Housing Airport Expenses Services Contributions Contributions Activities Activities Government Authority Authority Governmental activities: General government 10,865,700$ 3,400,883$ 750,696$ -$[6,714,121]$ -$[6,714,121]$ -$-$ Public safety 25,357,782 4,356,956 1,365,509 - [19,635,317]- [19,635,317]-- Public works 10,528,485 309,292 1,438,330 - [8,780,863]- [8,780,863]-- Public health and sanitation 1,156,165 45,549 277,304 - [833,312]- [833,312]-- Culture and recreation 6,879,281 1,513,628 578,558 - [4,787,095]- [4,787,095]-- Planning and development 2,522,266 103,727 129,662 - [2,288,877]- [2,288,877]-- Interest on long-term debt 2,168,897 ---[2,168,897] -[2,168,897]-- Total governmental activities 59,478,576 9,730,035 4,540,059 -[45,208,482]-[45,208,482]-- Business-type activities: Solid Waste Disposal 2,871,468 3,082,199 - - - 210,731 210,731 - - Water and Sewer 14,293,758 20,255,017 - - - 5,961,259 5,961,259 - - Sanitation 2,265,646 3,275,987 - - - 1,010,341 1,010,341 - - Golf Course 888,494 809,636 ---[78,858] [78,858] -- Total business-type activities 20,319,366 27,422,839 ---7,103,473 7,103,473 -- Total primary government 79,797,942$ 37,152,874$4,540,059$ -$[45,208,482]7,103,473 [38,105,009] -- Component units: Salina Housing Authority 2,813,581$ 407,030$ 2,128,578$ 70,557$ - - - [207,416] - Salina Airport Authority 6,167,660 2,432,958 - 1,727,674 ----[2,007,028] Total component units 8,981,241$ 2,839,988$ 2,128,578$ 1,798,231$ ---[207,416] [2,007,028] General Revenues: Property taxes levied for General purposes 9,707,788 - 9,707,788 - 2,371,463 Debt service 2,663,942 - 2,663,942 - - Motor vehicle tax General purposes 1,402,643 - 1,402,643 - - Sales tax General purposes 13,418,742 - 13,418,742 - - Selective purposes 9,323,065 - 9,323,065 - - Other taxes General purposes 6,975,000 - 6,975,000 - - Investment revenues 669,909 - 669,909 28,136 17,954 Miscellaneous 1,168,245 846,593 2,014,838 83,865 21,263 Transfers, net 4,781,500 [4,781,500] --- Subtotal general revenues 50,110,834 [3,934,907] 46,175,927 112,001 2,410,680 Change in net position 4,902,352 3,168,566 8,070,918 [95,415] 403,652 Net position - beginning 133,451,840 90,383,255 223,835,095 6,872,673 22,099,133 Prior period adjustment 4,322 -4,322 -- Net position - beginning, restated 133,456,162 90,383,255 223,839,417 6,872,673 22,099,133 Net position - ending 138,358,514$93,551,821$ 231,910,335$6,777,258$22,502,785$ Changes in Net Position Component UnitsPrimary GovernmentProgram Revenues CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 Net [Expenses] Revenue and The notes to the basic financial statements are an integral part of this statement. 17 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments 8,106,861$ 853$ 1,910,307$ 2,712,288$ Restricted cash - - - - Receivables (net) Accounts 1,628,614 450,217 - - Taxes 10,430,287 - 327,922 - Interest 9,518 - - - Inventory 211,986 - - - Due from other funds ---- Total assets 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 708,270$ -$ 45,246$ 139,896$ Retainage payable - - 2,005 166,517 Temporary notes payable - - - - Due to other funds ---- Total liabilities 708,270 -47,251 306,413 Deferred inflows of resources Unavailable revenue - property taxes 10,236,618 - - - Unavailable revenue - other 135,204 --- Total deferred inflows of resources 10,371,822 --- Fund balance: Nonspendable 211,986 - - - Restricted - 451,070 2,120,391 - Committed - - - 1,666,423 Assigned 273,808 - 70,587 739,452 Unassigned 8,821,380 --- Total fund balances 9,307,174 451,070 2,190,978 2,405,875 Total liabilities, deferred inflows of resources and fund balances 20,387,266$ 451,070$ 2,238,229$ 2,712,288$ CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds 1,949,346$ 1,089,325$ 7,314,875$ 8,148$ 4,861,928$ 27,953,931$ - - - 907,687 - 907,687 - - - 864,660 2,012 2,945,503 - 3,105,131 - - - 13,863,340 -----9,518 -----211,986 --349,515 --349,515 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ -$-$ 2,455,027$ -$ 193,423$ 3,541,862$ - - 1,691,417 120,559 - 1,980,498 - - 11,170,000 - - 11,170,000 ---349,515 -349,515 --15,316,444 470,074 193,423 17,041,875 - 3,052,038 --- 13,288,656 -----135,204 -3,052,038 ---13,423,860 -----211,986 - 1,142,418 - - 1,509,770 5,223,649 1,941,623 - 152,576 1,310,421 3,015,015 8,086,058 7,723 - - - 145,732 1,237,302 --[7,804,630] --1,016,750 1,949,346 1,142,418 [7,652,054] 1,310,421 4,670,517 15,775,745 1,949,346$ 4,194,456$ 7,664,390$ 1,780,495$ 4,863,940$ 46,241,480$ The notes to the basic financial statements are an integral part of this statement. 18 Total Governmental Fund Balances 15,775,745$ Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs 71,376 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 349,234,538 Accumulated depreciation is 126,991,328 222,243,210 Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position.4,976,291 Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position.[1,479,693] Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [864,660] An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. 2,565,728 The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences 2,754,631 Net OPEB obligation 3,460,931 Net pension liability 28,812,538 Bonds payable 57,623,908 Loans payable 12,199,016 Accrued interest on the bonds 78,459 [104,929,483] Net Position of Governmental Activities 138,358,514$ CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 19 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes 9,561,490$ -$-$-$ Delinquent taxes 146,298 --- Motor vehicle taxes 1,093,438 --- General sales taxes 13,418,742 --- Selective sales taxes --- 8,500,559 Other taxes 5,086,492 1,888,508 -- Intergovernmental 1,351,967 - 1,433,830 - Special assessments ---- Licenses and permits ---- Charges for services 5,816,485 --- Investment revenue 613,249 --- Donations ---- Miscellaneous 690,676 -432,910 - Total revenues 37,778,837 1,888,508 1,866,740 8,500,559 EXPENDITURES: Current General government 4,581,505 --- Public safety 23,692,445 --- Public works 5,473,414 - 406,058 - Public health and sanitation 816,636 --- Culture and recreation 4,379,441 --- Planning and development 836,690 1,046,945 -- Miscellaneous ---- Capital outlay 985,861 - 962,163 4,733,263 Debt service Principal retirement ---- Interest and other charges ---- Total expenditures 40,765,992 1,046,945 1,368,221 4,733,263 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses][2,987,155] 841,563 498,519 3,767,296 OTHER FINANCING SOURCES [USES] Issuance of bonds ---- Issuance of temporary notes ---- Bond premium ---- Capital contribution ---- Transfers in 6,449,500 - 160,000 - Transfers [out][897,748] [848,875] -[3,326,350] Total other financing sources [uses]5,551,752 [848,875] 160,000 [3,326,350] Net change in fund balance 2,564,597 [7,312] 658,519 440,946 Fund balance - Beginning of year 6,742,577 458,382 1,532,459 1,984,324 Prior period adjustment ---[19,395] Fund balance - Beginning of year, restated 6,742,577 458,382 1,532,459 1,964,929 Fund balance - End of year 9,307,174$ 451,070$ 2,190,978$ 2,405,875$ CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2019 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds -$ 2,620,653$ -$-$-$ 12,182,143$ - 43,289 --- 189,587 - 309,205 --- 1,402,643 -----13,418,742 ----822,506 9,323,065 -----6,975,000 ----1,787,565 4,573,362 - 1,540,285 55,845 -- 1,596,130 ----4,500 4,500 --- 492,917 494,470 6,803,872 20,767 -- 6,460 29,433 669,909 ----90,084 90,084 -94,519 282,720 -43,956 1,544,781 20,767 4,607,951 338,565 499,377 3,272,514 58,773,818 -----4,581,505 -----23,692,445 ----256,444 6,135,916 ----303,950 1,120,586 ----1,667,994 6,047,435 --- 31,600 396,101 2,311,336 ----3535 207,547 - 13,751,490 175,278 1,096,882 21,912,484 - 5,413,015 4,725,999 - 185,000 10,324,014 -1,536,834 352,011 200,044 47,278 2,136,167 207,547 6,949,849 18,829,500 406,922 3,953,684 78,261,923 [186,780] [2,341,898] [18,490,935] 92,455 [681,170] [19,488,105] -- 11,090,000 -- 11,090,000 ------ -- 442,878 -- 442,878 ------ - 1,632,958 -- 1,472,014 9,714,472 -----[5,072,973] -1,632,958 11,532,878 -1,472,014 16,174,377 [186,780] [708,940] [6,958,057] 92,455 790,844 [3,313,728] 2,136,126 1,851,358 [693,997] 1,217,966 3,861,345 19,090,540 ----18,328 [1,067] 2,136,126 1,851,358 [693,997] 1,217,966 3,879,673 19,089,473 1,949,346$ 1,142,418$ [7,652,054]$ 1,310,421$ 4,670,517$ 15,775,745$ The notes to the basic financial statements are an integral part of this statement. 20 Total Net Change In Fund Balances - Governmental Funds [3,313,728]$ Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets [8,190] Capital outlays 17,835,539 Depreciation expense [6,240,802] 11,586,547 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. 29,485 An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. 1,597,174 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [834,660] Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.[29,980] Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. [999,728] Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. [17,550,023] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities.14,417,265 Changes In Net Position of Governmental Activities 4,902,352$ CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 21 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) GENERAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 9,561,490$ 9,582,319$ 9,582,319$ [20,829]$ Delinquent taxes 146,298 160,000 160,000 [13,702] Motor vehicle taxes 1,073,265 1,008,720 1,008,720 64,545 General sales tax 13,418,742 13,829,194 13,829,194 [410,452] Other taxes 6,286,492 7,085,901 7,085,901 [799,409] Intergovernmental 1,351,967 1,135,255 1,135,255 216,712 Charges for services 4,051,536 5,907,154 5,907,154 [1,855,618] Investment revenue 892,731 10,000 10,000 882,731 Miscellaneous 690,673 632,907 632,907 57,766 Total revenues 37,473,194 39,351,450 39,351,450 [1,878,256] Expenditures General government 4,456,184 3,523,226 3,523,226 [932,958] Public safety 22,165,691 21,044,550 21,044,550 [1,121,141] Public works 5,524,886 5,652,826 5,652,826 127,940 Public health and sanitation 816,636 - - [816,636] Culture and recreation 4,375,589 5,361,919 5,361,919 986,330 Planning and development 1,069,690 3,437,251 3,437,251 2,367,561 Capital outlay 713,625 6,985,000 6,985,000 6,271,375 Total expenditures 39,122,301 46,004,772 46,004,772 6,882,471 Excess [deficiency] of revenues over [under] expenditures [1,649,107] [6,653,322] [6,653,322] 5,004,215 Other financing sources [uses] Transfers in 5,249,500 3,841,500 3,841,500 1,408,000 Transfers [out][897,748] [3,076,760] [3,076,760] 2,179,012 Total other financing sources [uses]4,351,752 764,740 764,740 3,587,012 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 2,702,645 [5,888,582] [5,888,582] 8,591,227 Unreserved fund balance, January 1 4,286,934 5,983,397 5,983,397 [1,696,463] Unreserved fund balance, December 31 6,989,579 94,815$ 94,815$ 6,894,764$ Reconciliation to GAAP Interest receivable 9,518 Accounts receivable 1,628,614 Taxes receivable 10,430,287 Inventory 211,986 Deferred revenue [10,236,618] Current year encumbrances 273,808 GAAP Fund Balance, December 31 9,307,174$ Budgeted Amounts See independent auditor's report on the financial statements. 22 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Other taxes 1,895,820$ 1,656,562$ 1,895,900$ [80]$ Investment revenue -150 -- Total revenues 1,895,820 1,656,712 1,895,900 [80] Expenditures Planning and development 1,046,945 914,818 1,046,945 - Total expenditures 1,046,945 914,818 1,046,945 - Excess [deficiency] of revenues over [under] expenditures 848,875 741,894 848,955 [80] Other financing sources [uses] Transfers [out][848,875][741,744][848,875]- Total other financing sources [uses][848,875][741,744][848,875]- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] - 150 80 [80] Unreserved fund balance, January 1 853 63,187 853 - Unreserved fund balance, December 31 853 63,337$ 933$ [80]$ Reconciliation to GAAP Accounts receivable 450,217 GAAP Fund Balance, December 31 451,070$ Budgeted Amounts See independent auditor's report on the financial statements. 23 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 1,426,232$ 1,417,590$ 1,417,590$ 8,642$ Miscellaneous 432,910 - - 432,910 Investment revenue -3,000 3,000 [3,000] Total revenues 1,859,142 1,420,590 1,420,590 438,552 Expenditures Public works 406,058 525,830 525,830 119,772 Capital outlay 859,528 946,243 946,243 86,715 Total expenditures 1,265,586 1,472,073 1,472,073 206,487 Excess [deficiency] of revenues over [under] expenditures 593,556 [51,483][51,483]645,039 Other financing sources [uses] Transfers in 160,000 160,000 160,000 - Total other financing sources [uses]160,000 160,000 160,000 - Excess [deficiency] of revenues and other sources over [under] 753,556 108,517 108,517 645,039 expenditures and other [uses] Unreserved fund balance, January 1 1,038,913 899,157 899,157 139,756 Unreserved fund balance, December 31 1,792,469 1,007,674$ 1,007,674$ 784,795$ Reconciliation to GAAP Taxes receivable 327,922 Current year encumbrances 70,587 GAAP Fund Balance, December 31 2,190,978$ Budgeted Amounts See independent auditor's report on the financial statements. 24 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Selective sales taxes 8,500,559$ 8,758,780$ 8,758,780$ [258,221]$ Investment revenue -5,000 5,000 [5,000] Total revenues 8,500,559 8,763,780 8,763,780 [263,221] Expenditures Capital outlay 4,944,758 6,541,080 6,541,080 1,596,322 Total expenditures 4,944,758 6,541,080 6,541,080 1,596,322 Excess [deficiency] of revenues over [under] expenditures 3,555,801 2,222,700 2,222,700 1,333,101 Other financing sources [uses] Transfers [out][3,326,350][3,073,878][3,073,878][252,472] Total other financing sources [uses][3,326,350][3,073,878][3,073,878][252,472] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 229,451 [851,178] [851,178] 1,080,629 Unreserved fund balance, January 1 1,436,972 1,763,089 1,763,089 [326,117] Unreserved fund balance, December 31 1,666,423 911,911$ 911,911$ 754,512$ Reconciliation to GAAP Current year encumbrances 739,452 GAAP Fund Balance, December 31 2,405,875$ Budgeted Amounts See independent auditor's report on the financial statements. 25 Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources:Disposal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments 6,874,432$ 26,289,593$ 1,754,760$ 38,143$ 34,956,928$ 3,452,453$ Receivables (net of allowance for uncollectibles) Accounts 198,322 1,578,182 257,378 - 2,033,882 - Interest 16 - - - 16 - Inventory and prepaid supplies -439,223 -38,421 477,644 127,892 Total current assets 7,072,770 28,306,998 2,012,138 76,564 37,468,470 3,580,345 Capital assets: Nondepreciable capital assets: Construction in progress - 7,526,968 - - 7,526,968 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 11,313,026 147,231,395 2,564,420 1,253,071 162,361,912 168,234 Less: accumulated depreciation 10,498,484 58,491,492 1,399,557 806,363 71,195,896 153,601 Total capital assets 1,496,542 97,956,205 1,164,863 461,708 101,079,318 14,633 Total assets 8,569,312 126,263,203 3,177,001 538,272 138,547,788 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 4,248 29,737 7,080 2,832 43,897 2,832 OPEB deferred outflows of resources 969 5,001 1,500 449 7,919 - Pension deferred outflows of resources 61,369 326,317 75,354 21,240 484,280 22,769 Deferred charge on bond issuance -9,925 --9,925 - Total deferred outflows of resources 66,586 370,980 83,934 24,521 546,021 25,601 Total assets and deferred outflows of resources 8,635,898$ 126,634,183$ 3,260,935$562,793$ 139,093,809$ 3,620,579$ Liabilities and deferred inflows of resources: Current liabilities Accounts payable 26,442$ 388,113$ 29,160$ 4,479$ 448,194$ 46,410$ Retainage payable - 153,409 -- 153,409 - Interest payable 5,262 320,614 -- 325,876 - Meter deposits payable - 229,447 -- 229,447 - Current portion of compensated absences payable 36,027 273,585 107,850 61,090 478,552 22,917 Current portion of accrued claims payable ----- 649,172 Current portion of loans payable - 539,863 -- 539,863 - Current portion of general obligation bonds payable 35,000 653,388 -- 688,388 - Current portion of revenue bonds payable -715,000 --715,000 - Total current liabilities 102,731 3,273,419 137,010 65,569 3,578,729 718,499 Noncurrent liabilities: Compensated absences payable 13,407 101,811 40,135 22,734 178,087 8,529 Accrued claims payable ----- 151,818 OPEB obligation 48,676 251,125 75,310 22,569 397,680 - KPERS OPEB obligation 15,192 106,343 25,320 10,128 156,983 10,128 Net pension liability 383,854 2,076,508 527,697 160,067 3,148,126 156,268 Payable from restricted assets Loans payable - 21,999,823 -- 21,999,823 - General obligation bonds payable 355,000 3,073,127 -- 3,428,127 - Revenue bonds payable - 10,407,175 -- 10,407,175 - Landfill post-closure care liabilities 2,048,896 ---2,048,896 - Total noncurrent liabilities 2,865,025 38,015,912 668,462 215,498 41,764,897 326,743 Total liabilities 2,967,756 41,289,331 805,472 281,067 45,343,626 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources 2,913 20,388 4,854 1,942 30,097 1,942 OPEB deferred inflows of resources 2,282 11,774 3,531 1,058 18,645 - Pension deferred inflows of resources 22,469 93,911 26,326 6,914 149,620 7,667 Total deferred inflows of resources 27,664 126,073 34,711 9,914 198,362 9,609 Total liabilities and deferred inflows of resources 2,995,420$ 41,415,404$ 840,183$ 290,981$ 45,541,988$ 1,054,851$ Net position Net investment in capital assets 1,106,542$ 60,567,829$ 1,164,863$ 461,708$ 63,300,942$ 14,633$ Restricted Restricted for bond retirement - 1,367,894 - - 1,367,894 - Unrestricted 4,533,936 23,283,056 1,255,889 [189,896] 28,882,985 2,551,095 Total net position 5,640,478$ 85,218,779$ 2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 26 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Operating revenues Charges for services 3,082,199$ 20,255,017$ 3,275,987$ 809,636$ 27,422,839$ 7,798,835$ Miscellaneous 416,369 332,662 -97,562 846,593 60,303 Total operating revenues 3,498,568 20,587,679 3,275,987 907,198 28,269,432 7,859,138 Operating expenses General government - - - - - 8,982,331 Public works 1,995,726 9,678,876 2,090,924 - 13,765,526 - Recreation - - - 840,279 840,279 - Depreciation 853,537 3,333,943 174,722 48,215 4,410,417 7,699 Total operating expenses 2,849,263 13,012,819 2,265,646 888,494 19,016,222 8,990,030 Operating income [loss]649,305 7,574,860 1,010,341 18,704 9,253,210 [1,130,892] Nonoperating revenues [expenses] Interest expense [22,205] [1,129,127] - - [1,151,332] - Accretion of bond premium - 55,915 - - 55,915 - Amortization of bond issuance costs -[207,727]--[207,727] - Total nonoperating revenues [expenses][22,205] [1,280,939] --[1,303,144] - Income [loss] before transfers 627,100 6,293,921 1,010,341 18,704 7,950,066 [1,130,892] Transfers from [to] other funds Transfers in ----- 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Total transfers [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Change in net position [12,900] 2,643,921 518,841 18,704 3,168,566 [990,892] Net position, January 1 5,653,378 82,580,128 1,896,641 253,108 90,383,255 3,556,620 Prior period adjustment -[5,270]5,270 --- Net position, January 1, restated 5,653,378 82,574,858 1,901,911 253,108 90,383,255 3,556,620 Net position, December 31 5,640,478$ 85,218,779$2,420,752$271,812$ 93,551,821$ 2,565,728$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Cash flows from operating activities Cash received from customers and users 3,073,363$ 20,427,626$ 3,272,401$ 809,636$ 27,583,026$ 7,980,067$ Cash paid to suppliers of goods or services [1,264,517] [5,412,123] [1,144,660] [315,480] [8,136,780] [8,734,446] Cash paid to employees [677,451] [4,192,802] [926,570] [535,122] [6,331,945] [288,556] Other operating receipts 416,369 332,662 -97,562 846,593 60,303 Net cash provided by [used in] operating activities 1,547,764 11,155,363 1,201,171 56,596 13,960,894 [982,632] Cash flows from capital and related financing activities Purchase and construction of capital assets - [13,963,235] [453,771] [99,848] [14,516,854] - Proceeds from bonds - 10,330,000 - - 10,330,000 - Proceeds from loans - 12,434,835 - - 12,434,835 - Principal payments - loans - [527,499] - - [527,499] - Principal payments - general obligation bonds [390,000] [768,198] - - [1,158,198] - Principal payments - revenue bonds - [11,850,000] - - [11,850,000] - Interest paid [22,918] [1,051,885] --[1,074,803]- Net cash provided by [used in] capital and related financing activities [412,918] [5,395,982] [453,771] [99,848] [6,362,519] - Cash flows from investing activities Interest received ------ Cash flows from noncapital financing activities Transfers in - - - - - 140,000 Transfers [out][640,000] [3,650,000] [491,500] -[4,781,500]- Net cash provided by [used in] noncapital financing activities [640,000] [3,650,000] [491,500] -[4,781,500]140,000 Net increase [decrease] in cash and cash equivalents 494,846 2,109,381 255,900 [43,252] 2,816,875 [842,632] Cash and cash equivalents, January 1 6,379,586 24,185,482 1,493,590 81,395 32,140,053 4,295,085 Prior period adjustment -[5,270]5,270 --- Cash and cash equivalents, January 1, restated 6,379,586 24,180,212 1,498,860 81,395 32,140,053 4,295,085 Cash and cash equivalents, December 31 6,874,432$26,289,593$1,754,760$38,143$ 34,956,928$3,452,453$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 PROPRIETARY FUNDS The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Solid Waste Water and Enterprise Service Disposal Sewer Sanitation Golf Course Funds Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] 649,305$ 7,574,860$ 1,010,341$ 18,704$ 9,253,210$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 853,537 3,333,943 174,722 48,215 4,410,417 7,699 [Increase] decrease in accounts receivable [8,836] 127,020 [3,586] - 114,598 - [Increase] decrease in inventory - 7,848 - [3,944] 3,904 [16,406] [Increase] decrease in deferred outflows 5,290 31,955 7,902 2,920 48,067 1,085 Increase [decrease] in accounts payable 2,199 108,818 3,706 [14,751] 99,972 [1,962] Increase [decrease] in retainage payable - [73,568] - - [73,568] - Increase [decrease] in accrued compensated absences [21,204] [4,797] 7,606 5,517 [12,878] [27,942] Increase [decrease] in claims payable - - - - - 181,232 Increase [decrease] in net pension liability 3,546 22,496 5,297 1,969 33,308 1,719 Increase [decrease] in net KPERS OPEB obligation [1,216] [3,042] [2,026] [811] [7,095] 4,659 Increase [decrease] in net OPEB obligation 444 2,284 686 204 3,618 - Increase [decrease] in meter deposits payable - 45,589 -- 45,589 - Increase [decrease] in deferred inflows [2,699] [18,043][3,477] [1,427] [25,646][1,824] Net cash provided by [used in] operating activities 1,547,764$ 11,155,363$1,201,171$56,596$ 13,960,894$[982,632]$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2019 The notes to the basic financial statements are an integral part of this statement. 29 ASSETS Cash and investments 270,096$ Total assets 270,096$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable 270,096$ Total liabilities 270,096$ December 31, 2019 CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS The notes to the basic financial statements are an integral part of this statement. 30 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five-member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority - The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five- member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority’s basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina - The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2019. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) - SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the City of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 50l(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity’s administrative offices. Salina Airport Authority Housing Authority of Salina Field House 3237 Arnold Ave. the City of Salina QALICB, Inc. Salina, KS 469 S. 5th 300 W. Ast St. Salina, KS Salina, KS Joint Ventures The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) (Kansas Regulatory Basis) Building Authority (Audited) Total unencumbered cash, December 31, 2019 1,596,458$ Total change in unencumbered cash, year ended December 31, 2019 301,873 Total cash receipts, year ended December 31, 2019 1,533,357 Total cash receipts from City of Salina 480,585 Complete financial statements for the joint venture may be obtained at the entity’s administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City’s governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues,are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C.Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure- driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker’s compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General Fund -To account for resources traditionally associated with government, which are not required legally,or by sound financial management to be accounted for in another fund. Tourism and Convention Fund - To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special Gas Fund - To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance,or improvement of streets within the City. Sales Tax Capital Fund - To account for 58% of the 1.25 cent sales tax designated for capital, debt, and human services purposes. Schilling Capital Improvement Fund - To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt Service Fund - To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital Projects Fund - To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB Fund - To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation Fund - To account for the operations of the City's refuse collection service. Solid Waste Disposal Fund - To account for the activities of the City's landfill. Golf Course Fund - To account for the operations of the municipal golf course. Water and Sewer Fund - To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1.Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type’s portion of this pool is displayed in the financial statements as “Cash and Investments.” The city’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2.Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2020. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance and Net Position (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer’s office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Years Buildings 50 Other equipment 5 -15 Vehicles 6 -10 Infrastructure 30 -50 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8.Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management’s intent to be used for specific purposes but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Tourism Schilling Other Total and Special Sales Tax Capital Debt Capital SFH Governmental Governmental General Convention Gas Capital Improvement Service Projects QalicB Funds Funds Fund Balances: Nonspendable for: Inventory 211,986$ -$ -$ -$ -$-$ -$ -$ -$ 211,986$ Restricted for: Public works -- 2,120,391 - - - - -- 2,120,391 Public health and sanitation -- -- - - - - 234 234 Culture and recreation -- -- - - - - 348,866 348,866 Planning and development -451,070 -- - - -- 221,075 672,145 Debt payments -- -- -1,142,418 -- 939,595 2,082,013 Committed for: Public safety -- -- - - - - 351,372 351,372 Culture and recreation -- -- - - - - 587,642 587,642 Planning and development -- -- - - - 1,310,421 256,847 1,567,268 Cemetery -- -- - - - - 521,641 521,641 Capital improvements -- -1,666,423 1,941,623 -152,576 -1,297,513 5,058,135 Assigned for: General government 20,255 - - - - - - - - 20,255 Public safety -- -- - - - - 145,732 145,732 Public works 19,000 - - - - - - - - 19,000 Culture and recreation 1,553 - - - - - - - - 1,553 Capital improvements 233,000 - 70,587 739,452 7,723 - - - - 1,050,762 Unassigned:8,821,380 - - - - - [7,804,630] - - 1,016,750 Total Fund Balances 9,307,174$451,070$2,190,978$2,405,875$1,949,346$1,142,418$[7,652,054]$1,310,421$4,670,517$ 15,775,745$ Major Governmental Funds 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, changes in the pension and OPEB plan liability proportion and assumptions, net difference between projected and actual earnings on pension plan and OPEB plan investments and differences between pension and OPEB plan liability expected and actual experience are reported as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue – property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, differences between expected and actual experience, changes in assumptions, and changes in the pension liability and OPEB plan proportion are reported as deferred inflows. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11.Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2019 budget was amended for the Sales Tax Economic Development, Tourism and Convention, Special Alcohol and Health Insurance funds. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners’ Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25.At December 31, 2019, the statutory limit for the City was $152,724,804, providing a debt margin of $85,059,351. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2019, management discovered certain errors that occurred in the prior year. The effects of these items caused a restatement to net position or fund balance as follows: Sales Tax Police Water and Governmental Capital Grants Sewer Sanitation Activities Fund Fund Fund Fund Net Position/Fund Balance, 133,451,840$ 1,984,324$ [24,544]$ 82,580,128$ 1,896,641$ December 31, 2018 Prior Period Adjustment 4,322 [19,395]18,328 [5,270] 5,270 Net Position/Fund Balance, December 31, 2018, Restated 133,456,162$1,964,929$[6,216]$ 82,574,858$1,901,911$ Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City’s cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City’s investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody’s investors service or Standard and Poor’s corporation, and various other investments as specified in KSA 10-131. At December 31, 2019, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Investment Pool 317,303$ S&P AAAf/S1+ Total fair value 317,303$ The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City’s investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’s deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31, 2019 the City’s deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31, 2019, the balance of the construction account, Interest Reserve, and Operating Reserve was $495,071, $286,100, and $126,516, respectively. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt SFH Other General Convention Gas Service QalicB Governmental Subtotal Primary Government Receivables: Accounts 7,109,224$ 450,217$ -$ -$864,660$ 3,216$ 8,427,317$ Taxes 10,430,287 - 327,922 3,105,131 --13,863,340 Interest 9,517 -----9,517 Gross receivables 17,549,028 450,217 327,922 3,105,131 864,660 3,216 22,300,174 Less: allowance for uncollectibles [5,480,609] ----[1,204] [5,481,813] Total 12,068,419$ 450,217$ 327,922$ 3,105,131$ 864,660$ 2,012$ 16,818,361$ Solid Water Waste and Disposal Sewer Sanitation Total Primary Government Receivables: Accounts 198,322$ 2,861,380$ 466,648$ 11,953,667$ Taxes ---13,863,340 Interest 16 --9,533 Gross receivables 198,338 2,861,380 466,648 25,826,540 Less: allowance for uncollectibles -[1,283,198][209,270] [6,974,281] Total 198,338$ 1,578,182$ 257,378$ 18,852,259$ Component Units Salina Airport Authority Accounts 99,749$ Grants 750,000 Less: allowance for uncollectibles [1,500] Total Salina Airport Authority 848,249 Salina Housing Authority Accounts 12,347 Less: allowance for uncollectibles [986] Interest 798 Total Salina Housing Authority 12,159 Total 860,408$ C. Interfund Receivables and Payables The composition of interfund balances as of December 31, 2019, is as follows: Fund Types Due From Due To Capital Project Fund 349,515$ -$ SFH QalicB Fund -349,515 349,515$ 349,515$ The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2019, was as follows: Balance Adj. Bal.Balance 12/31/2018 Adjustments 12/31/2018 Additions Retirements 12/31/2019 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress 32,217,207$ -$32,217,207$ 17,029,601$ 4,019,079$ 45,227,729$ Land 24,093,535 -24,093,535 130,000 -24,223,535 Leased land under capital lease 422,799 -422,799 --422,799 Capital assets, being depreciated Infrastructure 204,630,178 -204,630,178 3,878,632 -208,508,810 Buildings and improvements 53,014,858 -53,014,858 144,088 -53,158,946 Vehicles 10,191,330 -10,191,330 575,032 542,068 10,224,294 Equipment, furniture and fixtures 7,118,105 5,389 7,123,494 216,528 60,746 7,279,276 Leasehold improvements 326,193 -326,193 31,190 -357,383 Total capital assets 332,014,205 5,389 332,019,594 22,005,071 4,621,893 349,402,772 Less accumulated depreciation for: Infrastructure 88,265,257 -88,265,257 3,979,608 -92,244,865 Buildings and improvements 21,255,995 -21,255,995 1,346,879 -22,602,874 Vehicles 7,233,567 -7,233,567 670,702 533,878 7,370,391 Equipment, furniture and fixtures 4,743,932 -4,743,932 243,613 60,746 4,926,799 Total accumulated depreciation 121,498,751 -121,498,751 6,240,802 594,624 127,144,929 Governmental activities capital assets, net 210,515,454$ 5,389$ 210,520,843$ 15,764,269$ 4,027,269$ 222,257,843$ Business-type activities: Capital assets, not being depreciated Construction in progress 4,171,178$ -$4,171,178$ 14,352,812$ 10,997,022$ 7,526,968$ Land 2,059,834 -2,059,834 326,500 -2,386,334 Capital assets, being depreciated Infrastructure 119,170,313 -119,170,313 10,997,022 -130,167,335 Buildings and improvements 22,579,936 -22,579,936 --22,579,936 Vehicles 3,819,646 -3,819,646 310,539 267,147 3,863,038 Equipment, furniture and fixtures 5,570,277 13,164 5,583,441 306,011 137,849 5,751,603 Total capital assets 157,371,184 13,164 157,384,348 26,292,884 11,402,018 172,275,214 Less accumulated depreciation for: Infrastructure 46,858,117 -46,858,117 3,485,597 -50,343,714 Buildings and improvements 13,639,506 -13,639,506 421,287 -14,060,793 Vehicles 2,611,814 -2,611,814 230,626 267,146 2,575,294 Equipment, furniture and fixtures 4,081,039 -4,081,039 272,905 137,849 4,216,095 Total accumulated depreciation 67,190,476 -67,190,476 4,410,415 404,995 71,195,896 Business-type activities capital assets, net 90,180,708$ 13,164$ 90,193,872$ 21,882,469$ 10,997,023$ 101,079,318$ 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City’s depreciation expense was charged to governmental functions as follows: Governmental Activities: General government 74,670$ Public safety 656,346 Public works 4,334,423 Public health 31,110 Culture and recreation 810,779 Planning and development 333,474 Total depreciation 6,240,802$ Business-type Activities: Solid Waste Disposal 853,537$ Water and Sewer 3,333,941 Sanitation 174,722 Golf Course Division 48,215 Total depreciation 4,410,415$ E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2019: Restated Balance Balance Amounts January 1, December 31, Due Within 2019 Additions Deletions 2019 One Year Governmental activities: General obligation bonds 51,968,310$ 11,532,878$ 5,877,280$ 57,623,908$ 4,474,480$ Loans payable 12,185,053 13,963 -12,199,016 - OPEB liability 3,093,240 333,365 304,958 3,121,647 - KPERS OPEB liability 382,848 52,116 85,552 349,412 - Net pension liability 27,918,983 1,049,823 -28,968,806 - Accrued compensation 2,815,485 2,001,057 2,030,465 2,786,077 2,030,465 Temporary notes 18,123,505 11,170,000 18,123,505 11,170,000 11,170,000 Total 116,487,424$ 26,153,202$ 26,421,760$ 116,218,866$ 17,674,945$ Business-type activities: General obligation bonds 5,282,578$ -$1,166,063$ 4,116,515$ 688,388$ Revenue bonds 11,898,051 11,122,175 11,898,051 11,122,175 715,000 Loans payable 10,632,351 12,434,834 527,499 22,539,686 539,863 OPEB liability 394,062 42,469 38,851 397,680 - KPERS OPEB liability 164,078 23,414 30,509 156,983 - Net pension liability 3,114,818 33,308 -3,148,126 - Accrued compensation 669,517 465,674 478,552 656,639 478,552 Total 32,155,455$ 24,121,874$ 14,139,525$ 42,137,804$ 2,421,803$ Component Units: General obligation bonds 21,427,000$ 6,380,000$ 5,382,000$ 22,425,000$ 1,425,000$ Less unamortized discount [64,208]-[46,505][17,703]- Special assessment debt 7,054 -2,249 4,805 2,350 KPERS OPEB obligation 11,126 2,212 - 13,338 - Net pension liability 605,630 27,226 -632,856 - Total component units 21,986,602$ 6,409,438$ 5,337,744$ 23,058,296$ 1,427,350$ 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City’s long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government Original Interest Bonds General Obligation Bonds Issue Rates Outstanding Internal Improvements 2008B, due 7/1/2028 3,525,000$ 3.65% to 5.00% 850,000$ Internal Improvements 2009A, due 10/1/2029 23,695,000 2.00% to 5.00% 663,468 Internal Improvements 2010A, due 10/1/2025 6,916,592 2.00% to 3.875% 332,772 Internal Improvements 2010B, due 10/1/2023 7,973,044 0.50% to 3.00% 1,204,781 Internal Improvements 2011A, due 10/1/2031 6,587,985 2.00% to 5.00% 742,300 Internal Improvements 2012A, due 10/1/2027 2,383,903 1.00% to 2.45% 1,350,082 Refunding 2012B, due 10/1/2020 3,817,108 1.00% to 1.40% 184,014 Internal Improvements 2013A, due 10/1/28 1,369,380 3.00% to 4.00% 910,630 Internal Improvements 2013B, due 10/1/33 4,485,073 0.60% to 3.65% 3,028,550 Internal Improvements 2014A, due 10/1/34 7,839,050 2.50% to 3.75% 4,801,789 Improvement and Refunding 2015A, due 10/1/35 7,157,688 2.00% to 4.00% 5,781,152 Internal Improvements 2016A, due 10/1/36 6,681,766 2.00% to 3.00% 5,880,002 Refunding 2016B, due 10/1/2031 15,141,004 2.00% to 5.00% 13,622,290 Internal Improvements 2017A, due 10/1/37 9,388,370 3.00% to 3.375% 8,815,534 Internal Improvements 2018A, due 10/1/33 2,090,000 3.15% to 4.00% 2,040,180 Internal Improvements 2019A, due 10/1/39 11,090,000 3.00% to 4.00% 11,532,878 Total general obligation bonds 61,740,422$ Revenue Bonds Revenue & Refunding 2019, due 10/1/31 11,122,175$ 3.00% 11,122,175$ Total revenue bonds 11,122,175$ Temporary Notes Series 2019-1, due 5/1/20 6,085,000$ 1.58% 6,085,000$ Series 2019-2, due 7/1/20 5,085,000 2.07% 5,085,000 Total temporary notes 11,170,000$ Loans Payable Kansas Public Water Supply, due 8/1/34 9,330,000$ 2.12% 6,411,458$ Kansas Public Water Supply, due 8/1/35 4,250,000 2.78% 3,693,394 Kansas Public Water Supply, due 2/1/40 32,000,000 2.33% 10,396,098 Kansas Public Water Supply, due 2/1/40 4,250,000 2.33% 1,933,592 Kansas Water Pollution Control, due 3/1/35 2,250,000 2.54% 105,145 Dakotas & CNMC Notes, due 12/10/50 12,640,000 1.58% 12,199,016 Total loans payable 34,738,703$ 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Original Interest Bonds Issue Rates Outstanding Component Unit Salina Airport Authority General Obligation Debt General Obligation 2015A, due 2025 3,075,000$2.67% 1,180,000$ General Obligation 2017A, due 2030 10,255,000 3.04% 10,080,000 General Obligation 2017B, due 2025 4,835,000 3.02% 4,785,000 General Obligation 2019A, due 2029 675,000 2.78% 675,000 General Obligation 2019B, due 2023 3,455,000 2.92% 3,455,000 General Obligation Temporary Notes 2019-1, due 2021 2,250,000 2.50% 2,250,000 Less unamortized bond premium 28,069 Less unamortized bond discount [45,772] Total general obligation bonds 22,407,297 Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 27,599 4.47%4,805 Total special assessment debt 4,805 Total 22,412,102$ Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: Bonds Interest Year Outstanding Due Total 2020 5,162,867$ 1,997,278$ 7,160,145$ 2021 5,057,615 1,692,386 6,750,001 2022 5,156,464 1,522,892 6,679,356 2023 5,016,465 1,330,541 6,347,006 2024 4,642,769 1,141,818 5,784,587 2025-2029 18,285,702 4,074,605 22,360,307 2030-2034 12,178,959 1,985,377 14,164,336 2035-2037 6,239,581 468,338 6,707,919 Total 61,740,422$ 14,213,235$ 75,953,657$ General Obligation - Primary Government 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E.Long-Term Debt (Continued) Bonds Interest Year Outstanding Due Total 2020 1,425,000$ 662,126$ 2,087,126$ 2021 3,730,000 605,838 4,335,838 2022 1,525,000 508,668 2,033,668 2023 1,565,000 467,940 2,032,940 2024 1,615,000 424,235 2,039,235 2025 - 2029 8,805,000 1,410,175 10,215,175 2030 - 2031 3,760,000 174,475 3,934,475 Total 22,425,000$ 4,253,457$ 26,678,457$ General Obligation - Component Units Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Bonds Interest Year Outstanding Due Total 2020 781,015$ 327,117$ 1,108,132$ 2021 816,015 288,450 1,104,465 2022 841,015 265,950 1,106,965 2023 861,015 242,700 1,103,715 2024 886,015 218,850 1,104,865 2025-2029 4,820,072 710,100 5,530,172 2030-2031 2,117,028 89,700 2,206,728 Total 11,122,175$ 2,142,867$ 13,265,042$ Revenue Bonds - Primary Government Annual debt service requirements to maturity for temporary notes - to be paid through the issuance of general obligation bonds: Notes Interest Year Outstanding Due Total 2020 11,170,000$ 172,417$ 11,342,417$ Total 11,170,000$ 172,417$ 11,342,417$ Temporary Notes - Primary Government 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Kansas Public Water Supply Loans.The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Loans Interest Year Outstanding Due Total 2020 539,863$ 235,471$ 775,334 2021 552,523 222,811 775,334 2022 565,483 209,851 775,334 2023 578,754 196,580 775,334 2024 592,341 182,993 775,334 2025-2029 3,177,162 699,508 3,876,670 2030-2034 3,569,051 307,625 3,876,676 2035 529,675 18,533 548,208 Total 10,104,852$ 2,073,372$ 12,178,224$ Kansas Water Supply Loans - Primary Government During 2019, the City entered into additional loans with the Kansas Public Water Supply Fund and the Kansas Water Pollution Control Fund. The water supply loans allow the City to borrow up to $36,170,000 with a gross interest rate of 2.33%. The water pollution control loan allows the City to borrow up to $2,250,000 with a gross interest rate of 2.54%. Amortization schedules for the loans are not yet available since the loans have not been fully finalized. The purpose of the loans are to finance various water and sewer infrastructure projects throughout the City. Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $6,016,500. Dakotas Note B - On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,623,500. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) CNMC Note A - On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $2,674,000. CNMC Note B - On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2019, the note balance was $1,326,000. As of December 31, 2019, the principal balance of these four loans, net of $440,984 of unamortized debt issuance costs, was $12,199,016. Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Assessment Interest Year Outstanding Due Total 2020 2,350$ 215$2,565$ 2021 2,455 110 2,565 Total 4,805$ 325$5,130$ Special Assessment Debt - Component Units 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease.On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2019, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2019, rental income of $87,368 remained receivable from the City. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2019: 2020 130,000$ 2021 130,000 2022 130,000 2023 162,500 2024 227,500 2025-2029 2,827,500 2030-2034 3,250,000 2035-2039 3,250,000 2040-2044 3,250,000 2045-2046 975,000 14,332,500$ Ground Lease.On October 24, 2018, SFH QalicB entered into a lease agreement with Salina Regional Medical Education, LLC for the use of property for parking of passenger vehicles and non-commercial trucks (the Parking Lot) by the public. SFH QalicB will have the option to acquire the Parking Lot for $1 upon the end of the lease term, which is 100 years, as defined in the Ground Lease. A one-time basic rent payment of $250,000 was due on the commencement date. There are no additional minimum lease payments due. Sales tax and Revenue (STAR) Bonds.STAR Bonds are authorized to be issued pursuant to K.S.A. 12-17, 160, et seq., as amended (the STAR Bond Act). The STAR Bond Act provides a form of tax increment financing that enables the issuance of bonds payable from certain State and local sales and compensating use tax revenues and transient guest tax revenues generated from STAR bond projects constructed within a STAR bond project district. To implement STAR bond financing, a local government must adopt a resolution that specifies a proposed STAR bond project district’s boundary and describes the overall district plan, hold a public hearing on the district and plan, and pass a resolution that establishes the STAR bond project district. Additionally, there may be one or more projects within a STAR bond district. In accordance with the STAR Bond Act, the City has no liability for payment of bonds in the event that revenues received from sources noted above are inadequate to pay the debt incurred with the issuance of the STAR bonds. 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) In connection with the issuance of STAR bonds, the City of Salina and the State of Kansas enter into a Tax Distribution Agreement. The agreement provides that the principal of, accreted value, and interest on the STAR bonds will be paid proportionally by the City of Salina and the State of Kansas, based on each entity’s respective share of sales taxes generated within the district. These proportional shares may change in the future if the sales taxes assessed by the local or state governments are modified. On June 1, 2015, the City of Salina Commission adopted Ordinance 15-10776 establishing the district known as the Salina STAR Bond Project District. On August 22, 2016, the City held a public hearing and approved Ordinance 16-10856 adopting the STAR Bond Project Plan. On December 1, 2018, the City of Salina issued $18,250,000 in Senior Special Obligation Revenue Bonds (Series 2018-A) and $4,320,000 in Subordinate Special Obligation Revenue Bonds (Series 2018-B). As of December 31, 2019, the outstanding balances for the 2018-A and 2018-B were $18,250,000 and $4,320,000, respectively. F. Operating Leases On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City’s share of the lease agreement is 40% and will pay the lessor $1,100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2019. The future minimum lease payments for the lease are as follows: Year Amount 2020 93,926$ 2021 93,926 2022 93,926 2023 93,926 2024 93,926 2025-2027 281,779 Total principal and interest 751,409 Less: interest [95,149] Total principal 656,260$ G. Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General 6,449,500$ 897,748$ Tourism and Convention -848,873 Special Gas 160,000 - Sales Tax Capital -3,326,350 Debt Service 1,632,958 Other governmental funds 1,472,013 - Solid Waste Disposal -640,000 Water and Sewer -3,650,000 Sanitation -491,500 Central Garage 140,000 - Total transfers 9,854,471$ 9,854,471$ The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: o State/School employees o Local employees Police and Firemen Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member’s combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member’s lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 74-4921. All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2019. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Actuarial Statutory Employer Employer Rate Capped Rate Local employees 8.89%8.89% Police and Firemen 22.13%22.13% Member contribution rates as a percentage of eligible compensation for the fiscal year 2019 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: State/School Local Police and Firemen Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City’s share of the collective pension amounts as of December 31, 2019, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31, 2019. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2019, the City’s proportion for the Local employees group was 0.796%, which was an increase of .006% from its proportion measured at June 30, 2018. At June 30, 2019, the City’s proportion for the Police and Firemen group was 2.074%, which was a decrease of .007% from its proportion measured at June 30, 2018. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2019 and 2018, the City and its component units reported a liability of $32,116,932 and $31,984,657, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.50% Salary increases, including wage increases 3.5% to 12.0% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31, 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2019 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return Global Equity 47.00%6.85% Fixed Income 13.00%1.25% Yield driven 8.00%6.55% Real Return 11.00%1.71% Real estate 11.00%5.05% Alternatives 8.00%9.85% Short-term investments 2.00%-0.25% 100.00% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System’s Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate. The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%) than the current rate: 1% Decrease (6.75%)Discount Rate (7.75%)1% Increase (8.75%) Local 16,612,600$ 11,123,112$ 6,531,254$ Police & Firemen 29,791,754 20,993,820 13,628,262 Total 46,404,354$ 32,116,932$ 20,159,516$ Pension Expense. For the year ended December 31, 2019, the City recognized Local pension expense of $1,370,234 and Police and Firemen pension expense of $3,483,665, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority’s and Salina Airport Authority’s portion of the Local pension expense were $25,451 and $73,753, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 24,348$ 280,127$ Net differences between projected and actual earnings on investments 261,693 - Changes in assumptions 339,963 22,545 Changes in proportion 377,752 267,857 Total 1,003,756$ 570,529$ Deferred outflows Deferred inflows Police & Firemen of resources of resources Differences between actual and expected experience 1,186,018$ 38,909$ Net differences between projected and actual earnings on investments 422,552 - Changes in assumptions 743,686 23,244 Changes in proportion 36,289 792,896 Total 2,388,545$ 855,049$ 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2019, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred outflows Deferred inflows Deferred outflows Deferred inflows Local of resources of resources of resources of resources Differences between actual and expected experience 1,198$ 9,400$ 1,385$ 15,938$ Net differences between projected and actual earnings on investments 7,761 - 14,889 - Changes in assumptions 14,366 1,598 19,342 1,283 Changes in proportion 1,145 4,793 59,996 19,497 Total 24,470$ 15,791$ 95,612$ 36,718$ Airport AuthorityHousing Authority $1,933,992 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2019 292,771$ 813,535$ 1,106,306$ 2020 [13,048] 196,519 183,471 2021 80,992 294,428 375,420 2022 73,350 221,173 294,523 2023 [838] 7,841 7,003 Total 433,227$ 1,533,496$ 1,966,723$ $37,624 and $36,310 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2020 9,773$ 22,167$ 31,940$ 2021 5,754 8,732 14,486 2022 [6,147] 17,687 11,540 2023 [609] 9,959 9,350 2024 [92] 349 257 Total 8,679$ 58,894$ 67,573$ 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers’ compensation. The program covers all City employees. Premiums are paid into the Workers’ Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $159,754 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2019 2018 Unpaid claims, January 1 238,778$ 221,913$ Incurred claims (including IBNRs)726,271 886,086 Claim payments [653,477] [869,221] Unpaid claims, December 31 311,572$ 238,778$ The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) 2019 2018 Unpaid claims, January 1 380,980$ 395,691$ Incurred claims (including IBNRs)4,466,044 3,670,930 Claim payments [4,357,606][3,685,641] Unpaid claims, December 31 489,418$ 380,980$ E. Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2019. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the Solid Waste Fund in each period based on landfill capacity used as of each balance sheet date. The $2,048,896 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2019. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2019. Project Authorization Expenditures Markley-Magnolia VV Sewer 5,150,000$ 439,661$ Bicentennial Center Improvements 10,200,000 12,433,918 Water Well 13 & 14 Maintenance 52,184 50,830 Community Fieldhouse (1)10,950,000 9,188,840 Community Fieldhouse (2)750,000 733,992 North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 Rebuild High Service Pump P-203 24,187 13,688 Pump Stations and Force Mains 1,483,000 1,425,505 2017 Country Club Road Improvements 1,200,000 1,089,063 River Trail 2 956,072 11,312 Downtown Streetscape 12,165,000 11,298,360 Smoky Hill River Renewal 27,000,000 3,467,058 Water Mains 4,250,000 2,319,841 Downtown Santa Fe Water Main Replacement 1,351,100 1,258,672 Police Training Facility 4,900,000 1,398,225 Rehab Pump St 28,29/Repl 28 Face Main 550,000 - Northbound 9th Street Bridge 103,768 95,358 Landfill Cell #20 Design 2,200,000 1,959,983 Railroad Crossing Improvements 45,000 - 2018 Park Improvements 194,000 87,000 FH Parking Lot 55,930 2,320 Pheasant Ridge Addition #3 Phase 2 509,233 446,916 Manhole & Valve Adj 10,000 17,806 Community Theater HVAC Replacement 46,000 207 Storm Sewer Mulberry Street 22,709 21,528 9th Street Crawford to Walnut 646,896 643,555 2019 Pavement Sealing 295,937 295,937 Dean Evans Drainage 60,000 315 2019 Sidewalk Improvements 24,965 24,648 2019 Traffic Signal Improvements 35,758 35,758 2019 Mill and Inlay 1,853,546 1,531,098 2019 Microsurfacing 693,462 681,555 2019 Chip and Seal 140,000 131,733 N.9th Street Bridge 2,000,000 3,546 Golf Course Irrigation 1,488,414 1,321,171 Police Parking Lot 400,000 200,995 2019 Sidewalk Abatement 21,625 - Fair Housing 38,750 - 9th South Addition 1,180,313 2,976 Smoky Hill Greenway Trail 435,637 49,389 Chorine Building 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 - Magnolia Hills Estates II 1,575,240 10,958 Stone Lake Phase 2 670,166 2,207 Stone Lake Phase 3A 1,647,053 3,007 Smedley Surgical Center 45,486 1,961 Sound Garden Oakdale Park 10,046 10,046 Wheatland Valley -Specials 5,474,790 6,500 Park Shelter Roof Replacement 93,816 - LED Lighting Replacement - Parks 18,223 - 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30- year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities’ CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count III Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts III and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third-party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0-CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed on or about June 18, 2018. The Feasibility Study portion of the CAFO scope of work was completed on or about November 29, 2018. KDHE’s draft final Corrective Action Decision (CAD) was published on or about April 8, 2019. KDHE held a public hearing for the final CAD on or about May 1, 2019. Final comments concerning the draft final CAD were due on or about May 8, 2019. KDHE published a final CAD on or about July 29, 2019. The KDHE CAD details the scope of work and estimated cost for the cleanup of DoD-caused contamination at the former Schilling AFB. 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) The Salina Public Entities participated in three mediation sessions with the U.S. Department of Justice (DOJ) and the U.S. Army Corps of Engineers (USACE) on November 19-21, 2019; December 10-11, 2019; and the final subsequent to year-end to determine payment by the United States in exchange for performance by the Salina Public Entities of the KDHE CAD. Special environmental legal counsel for the Salina Public Entities has negotiated with the DOJ for the completion of a Consent Decree that embodies the results of the three mediation sessions. The final draft of the Consent Decree will be considered by the Salina Public Entities in a joint meeting scheduled for June 24, 2020. Upon approval by the U.S. District Court for the District of Kansas, the CD will provide the Salina Public Entities funding from the United States for the Remedial Design (RD) and Remedial Action (RA) work detailed in the KDHE CAD. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the City intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the City has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Other Postemployment Healthcare Benefits Plan Description. The City offers postemployment health insurance to retirement employees. The benefits are provided through a single employer defined benefit postemployment healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. In 2019, the City did not contribute to the plan. At December 31, 2019, the following employees were covered by the benefit terms: Active employees 441 Retirees and covered spouses 32 Total 473 The total OPEB liability of $3,519,327 was measured as of December 31, 2018 and was determined by an actuarial valuation as of that date. The total OPEB liability in the December 31, 2017 actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date December 31, 2017 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.75% Salary increases 3.50% Discount rate 4.10% Healthcare cost trend rates Medical & Pharmacy: 6.20% for 2018, decreasing 0.60% per year to an ultimate rate of 5% for 2030 and through 2040 Dental: 5.00% to 2020, then drop to 4.90% in 2030 then back to 5.00% in 2040 Retiree's share of benefit related costs 100% of the premium 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2017. Changes in the total OPEB liability are as follows: Balance 1/1/2019 3,487,302$ Service cost 249,957 Interest 125,877 Benefit paid [157,465] Changes in assumptions [186,344] Balance 12/31/2019 3,519,327$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.44%) or one percentage point higher (4.44%) than the current discount rate: 1% Decrease Discount Rate 1% increase (3.10%)(4.10%)(5.10%) Total OPEB Liability 3,805,079$ 3,519,327$ 3,253,600$ The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.8% decreasing to 3.1%) or one percentage point higher (7.8% decreasing to 5.1%) than the current healthcare cost trend rate: Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability 3,092,948$ 3,519,327$ 4,027,376$ For the year ended December 31, 2019, the City recognized OPEB expense of $364,903. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows of resources of resources Changes of assumptions 70,090$ [164,999]$ Total 70,090$ [164,999]$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) Deferred Year ended [Inflows] Outflows June 30,Amount 2020 [10,931]$ 2021 [10,931] 2022 [10,931] 2023 [10,931] 2024 [10,931] 2025+[40,254] Total [94,909]$ J.Other Postemployment Benefits (KPERS) Plan Description. The City participates in a multiple-employer defined benefit other postemployment benefit (OPEB) plan (the Plan) which is administered by the Kansas Public Employees Retirement System (KPERS). The Plan provides long-term disability benefits and a life insurance benefit for disabled members to KPERS members, as provided by K.S.A. 74-04927. The Plan is administered through a trust held by KPERS that is funded to pay annual benefit payments. However, because the trust’s assets are used to pay employee benefits other than OPEB, the trust does not meet the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Accordingly, the Plan is considered to be administered on a pay-as-you-go basis. Benefits. Benefits are established by statute and may be amended by the KPERS Board of Trustees. The Plan provides long-term disability benefits equal to 60 percent (prior to January 1, 2006, 66 2/3 percent) of annual compensation, offset by other benefits. Members receiving long-term disability benefits also receive credit towards their KPERS retirement benefits and have their group life insurance coverage continued under the waiver of premium provision. The monthly long-term disability benefit is 60 percent of the member’s monthly compensation, with a minimum of $100 and a maximum of $5,000. The monthly benefit is subject to reduction by deductible sources of income, which include Social Security primary disability or retirement benefits, workers compensation benefits, other disability benefits from any other sources by reason of employment, and earnings from any form of employment. If the disability begins before age 60, benefits are payable while the disability continues until the member’s 65th birthday or retirement date, whichever occurs first. If the disability begins after age 60, benefits are payable while the disability continues, for a period of five years or until the member retires, whichever occurs first. Benefit payments for disabilities caused or contributed to by substance abuse or non-biologically based mental illnesses are limited to the shorter of the term of the disability or 24 months per lifetime. The death benefit paid to beneficiaries of disabled members is 150% of the greater of 1) the member’s annual rate of compensation at the time of disability, or 2) the members previous 12 months of compensation at the time of the last date on payroll. If the member has been disabled for five or more years, the annual compensation or salary rate at the time of death will be indexed using the consumer price index, less one percentage point, to compute the death benefit. If a member is diagnosed as terminally ill with a life expectancy of 12 months or less, the member may be eligible to receive up to 100% of the death benefit rather than having the benefit paid to the beneficiary. If a member retires or disability benefits end, the member may convert the group life insurance coverage to an individual insurance policy. Employees covered by benefit terms.At June 30, 2019, the valuation date, the following employees were covered by the benefit terms: 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Active employees 282 Disabled members 2 Total 284 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $527,919 as of December 31, 2019, was measured as of June 30, 2019, and was determined by an actuarial valuation as of December 31, 2018, which was rolled forward to June 30, 2019, using the following actuarial assumptions: Valuation date December 31, 2018 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index)3.50% The discount rate was based on the bond buyer general obligation 20-bond municipal index. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2019. The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study for the period of January 1, 2013 through December 31, 2015. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2018 KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance 1/1/2019 546,926$8,886$ 11,126$ 566,938$ Service cost 52,863 1,507 2,843 57,213 Interest 22,667 372 541 23,580 Effect of economic/demographic gains or losses [95,243] [2,512][1,324][99,079] Changes in assumptions 7,614 [67]152 7,699 Benefit payments [28,432] --[28,432] Balance 12/31/2019 506,395$8,186$ 13,338$ 527,919$ Total KPERS OPEB Liability Sensitivity of the total KPERS OPEB liability to changes in the discount rate.The following presented the total KPERS OPEB liability of the City, as well as what the City’s total KPERS OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87%) or 1-percentage-point higher (4.87%) than the current discount rate: 1% Decrease Discount Rate 1% increase (2.50%)(3.50%)(4.50%) Total OPEB Liability - City 526,498$ 506,395$ 485,611$ Total OPEB Liability - Housing Authority 8,394$ 8,186$ 7,941$ Total OPEB Liability - Airport Authority 13,693$ 13,338$ 12,901$ 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Sensitivity of the total KPERS OPEB liability to changes in the healthcare cost trend rates. The following presented the total KPERS OPEB liability of the City calculated using the current healthcare cost trend rates as well as what the City’s total KPERS OPEB liability would be if it were calculated using trend rates that are 1 percentage point lower or 1 percentage point higher than the current trend rates. The reader should note that healthcare trend rates do not affect the liabilities related to the long-term disability benefits sponsored by KPERS, but this exhibit is provided as it is a required disclosure under GASB 75. Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability - City 506,395$ 506,395$ 506,395$ Total OPEB Liability - Housing Authority 8,186$ 8,186$ 8,186$ Total OPEB Liability - Airport Authority 11,395$ 1,126$ 10,800$ For the year ended June 30, 2018, the City recognized OPEB expense of $75,561. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2019, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Housing Authority Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Inflows of Inflows of Inflows of Resources Resources Resources Resources Resources Differences between expected and actual experience 59,657$ 85,454$ 2,253$ -$ 4,521$ Changes of assumptions 6,831 11,633 223 136 173 Total 66,488$ 97,087$ 2,476$ 136$ 4,694$ Airport AuthorityCity $72,729 and $4,294 reported as deferred outflows of resources related to OPEB resulting from City and Airport Authority contributions subsequent to the measurement date, respectively, will be recognized as a reduction of the OPEB liability in the year ended December 31, 2019. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2020 [2,886]$ [287]$ [578]$ 2021 [2,886] [287][578] 2022 [2,886] [287][578] 2023 [2,886] [287][578] 2024 [2,886] [287][578] Thereafter [16,169][1,041] [1,668] Total [30,599]$[2,476]$ [4,558]$ 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements In 2019, the City of Salina participated in real property tax abatements for five local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start- ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Company Start End %2019 Tax Abated Salina Vortex Corp (facility improvements)2015 2024 75% $ 14,369 Great Plains Mfg (facility improvements)2014 2023 100%2,744 Veris Technologies (facility addition/improvements) 2015 2024 40.5%1,755 Twin Oaks (facility addition/improvements)2015 2024 55%2,565 Salina Field House (facility)2017 2026 100%81,376 Total 102,808$ Ad Valorem Property Tax Abatements Abatement Tax Increment Financing (TIF).TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Reimbursements District Purpose Base Year Expires Sales Tax Property Tax Lambertz Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and private infrastructure 2007 2027 $268,905 $215,999 Total $268,905 $215,999 TIF Project Plans Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Name Rate Start Expires Purpose 2019 Eligible Reimbursement Amount South 9th Street 2.00% 3/1/2016 12/31/2037 Assist with improvements to hotel and conference center $251,052 Total $251,052 Community Improvement District (CID) Neighborhood Revitalization Areas (NRA).NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4-year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 69 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2019 Property/Business Name Address Type Rebate Paid Serio Guzman 241 N. Front Street Res 111$ Christina Litwiller 148 N. 12th Street Res 72 Jeremy Cessna 219 N. Front Street Res 77 William & Mary Warhurst 714 Park Street Res 15 Holly Fain 204 Forest Avenue Res 110 Arlene Cox 200 Forest Avenue Res 110 Gloria Williams 903 N. 10th Street Res 80 Michelle Rogan 240 S. Clark Street Res 96 Samuel A. Rock 1329 N. 4th Street Res 16 Jessica A. Ziegler 221 N. 2nd Street Res 109 Devin or Jessica Know 207 N. Penn Res 156 Ravey Investments LLC 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Com 581 Lamont Outland 1206 N. 7th Street Res 93 Michelle Bunch 634 N. 8th Street Res 91 Jermaine and Tykea Polk 226 N. 2nd Street Res 116 Mary Marshall 937 N. 3rd Street Res 86 Angela Fishburn 1219 N. 8th Street Res 87 Kress Building LLC 134 S. Santa Fe Ave Com 411 Heritage at Hawthorne Partners, LL715 N. 9th Street Com 1,527 Will & Mary Warhurst 809 W. Ash Res 121 Donnie & Ramona Marrs 2035 E. Iron #300R Res 859 TJTM, Inc. 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001R/002R/003R/004R/005R Res 5,359 Troy Valcil 853 Navaho Res 62 Michelle Malone 815 N. 2nd Street Res 2 Timothy & Linda Rickman 719 E. Ash Res 140 Yvette Gelinas 1115 N. 8th Street Res 90 Charles H Carroll Jr Trust 156-158 S. Santa Fe Com 4,149 Pestinger Enterprises LLC 2035 E. Iron Avenue, Unit #306R Res 1,300 Latisha Pierce 705 N. 2nd Street Res 251 Tanya Shiehzadeh 703 N. 2nd Street Res 208 Robert & Brenda Burns 1205 N. 4th Street Res 160 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Com 1,284 Phill Hemmer 2035 E. Iron Avenue, Unit #203R Res 1,615 AP Property Holdings, LLC 201 E. Iron Avenue Com 9,578 Gregory Davis 156-158 N. 11th Street Res 519 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 1,174 Traniesh Byrd 701 N. 2nd Street Res 178 Mark Martin Living Trust 2035 E. Iron #104R Com 818 AKKJ, LLC 2035 E Iron #304R Res 835 Kevin & Rebecca Poland 601 Johnstown Res 36 Jana Endsley 1321 N. 3rd Street Res 177 Kanesha Samilton 214 W. Grand Avenue Res 227 Maria E Padilla 810 N. 5th Street Res 280 Kansas Property Investors, LLC, 230 S. Broadway Blvd Com 1,400 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 1,981 Alan and Nancy Franzen 1413 Arapahoe Res 184 Brandon Sears 900 N. 12th Street Res 22 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 2,231 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,352 Heritage at Hawthorne Partners II, LLC.715 N. 9th Street, Phase II Com 1,750 Christopher Helmer 619 N. 5th Street Com 762 Christopher Helmer 545 N. 12th Street Res 203 Total 44,248$ Neighborhood Revitalization Act (NRA) 70 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2019 Note 5. OTHER INFORMATION (Continued) L. Subsequent Events On April 29, 2020, the City issued Series 2020-A general obligation internal improvement bonds in the amounts of $5,210,000. Proceeds from the bonds will be used to provide long-term financing for a portion of the costs of certain public improvements within the City and to retire a portion of the City’s outstanding general obligation temporary notes. The City will make the first payment on the bonds on October 1, 2021and the last payment on October 1, 2035. The interest rate on the bonds ranges from 2.00% to 3.00%. Also on April 29, 2020, the City issued Series 2020-1 temporary notes in the amounts of $7,050,000. Proceeds from the notes will be used to finance certain public improvements within the City. The maturity date of the temporary notes is May 1, 2021 and the interest rate on the notes is 1.00%. On January 30, 2020 the World Health Organization declared the Coronavirus outbreak as a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions were taken to help mitigate the spread of the virus, including social-distancing, quarantines and forced closures of certain types of public places and businesses. Management is unable to quantify the financial and other impacts to the City’s financial position but believes a material impact is reasonably possible. 5(48,5('6833/(0(17$5<,1)250$7,21 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 249,957$ 226,762$ Interest 125,877 128,578 Benefit paid [157,465] [265,000] Changes in assumptions [186,344] 90,918 Net change in total OPEB liability 32,025 181,258 Total OPEB liability - beginning 3,487,302 3,306,044 Total OPEB liability - ending 3,519,327$ 3,487,302$ Covered payroll 25,232,129$ 24,740,225$ Total OPEB liability as a percentage of covered-employee payroll 13.95% 14.10% Actuarially determined contribution 157,465$ 265,000$ Actual contribution 157,465$ 265,000$ Contributions as a percentage of covered payroll 0.62% 1.07% * - Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) OTHER POSTEMPLOYMENT BENEFITS - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2019 2018 Service cost 52,863$ 52,380$ Interest 22,667 17,061 Effect of economic/demographic gains or losses [95,243] 75,173 Effect of assumptions changes or inputs 7,614 [6,574] Benefit payments [28,432][30,368] Net change in total OPEB liability [40,531] 107,672 Total OPEB liability - beginning 546,926 439,254 Total OPEB liability - ending 506,395$ 546,926$ Covered payroll 13,991,543$ 13,652,194$ Total OPEB liability as a percentage of covered-employee payroll 3.62% 4.01% Actuarially determined contribution 147,114$ 109,466$ Actual contribution 147,114$ 109,466$ Contributions as a percentage of covered payroll 1.05% 0.80% 73 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) KPERS PENSION PLAN Schedule of the City’s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 City's proportion of the net pension liability 0.764% 2.258% 0.761% 2.180%0.811% 2.191% 0.790% 2.081% 0.796% 2.074% City's proportionate share of the net pension liability 10,027,679$ 16,395,794$ 11,770,699$ 20,251,512$ 11,753,246$ 20,546,882$ 11,014,328$ 20,019,473$ 11,123,112$ 20,993,820$ City's covered-employee payroll 12,931,197$ 10,161,866$ 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% 161.35% 88.83% 188.74% 86.75% 193.96% 78.98% 191.74% 77.43% 193.33% Plan fiduciary net position as a percentage of the total pension liability 71.98% 74.60% 68.55% 69.30% 72.15% 70.99% 74.22% 71.53% 75.02% 71.22% *The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Schedule of the City’s Contributions Last Ten Fiscal Years* Police and Police and Police and Police and Police and Local Firemen Local Firemen Local Firemen Local Firemen Local Firemen 12/31/15 12/31/15 12/31/16 12/31/16 12/31/17 12/31/17 12/31/18 12/31/18 12/31/19 12/31/19 Contractually required contribution 1,256,217$ 2,527,995$ 1,243,711$ 2,361,273$ 1,179,745$ 1,986,933$ 1,205,334$ 2,181,617$ 1,328,915$ 2,497,473$ Contributions in relation to the contractually required contribution 1,256,217 2,527,995 1,243,711 2,361,273 1,179,745 1,986,933 1,205,334 2,181,617 1,328,915 2,497,473 Contribution deficiency [excess]-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ City's covered-employee payroll 13,251,236$ 10,730,033$ 13,548,056$ 10,593,419$ 13,944,989$ 10,441,055$ 14,366,294$ 10,859,219$ 14,948,415$ 11,285,465$ Contributions as a percentage of covered employee payroll 9.48% 23.56% 9.18% 22.29% 8.46% 19.03% 8.39% 20.09% 8.89% 22.13% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 74 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund - To account for the activities of the City's convention center. Business improvement district fund - State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund - To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund - To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund - To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund - To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund - To account for 2.34% of the .75 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund – To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund – To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund - To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund - To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund - To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund - To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund - To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund - To account for donations to the D.A.R.E. program. War memorial maintenance fund - To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund - To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund - To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds - To account for revenue and expenses associated with federal Equitable Sharing Program funds. 75 CITY OF SALINA, KANSAS COMBINING STATEMENTS - NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS - CONTINUED Homeowners’ assistance fund - To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund – To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund – To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. Cemetery endowment fund - To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund - To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund - To account for donations to be used to celebrate the nation's tricentennial in the year 2076. Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds ASSETS Cash and investments 3,371,618$ 527,536$ 962,774$ 4,861,928$ Receivables Accounts 2,012 --2,012 Total assets 3,373,630$ 527,536$ 962,774$ 4,863,940$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 170,244$ -$23,179$ 193,423$ Total liabilities 170,244 -23,179 193,423 Fund balances: Restricted 570,175 - 939,595 1,509,770 Committed 2,487,479 527,536 - 3,015,015 Assigned 145,732 --145,732 Total fund balances 3,203,386 527,536 939,595 4,670,517 Total liabilities and fund balances 3,373,630$ 527,536$ 962,774$ 4,863,940$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2019 See independent auditor's report on the financial statements. 76 Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds REVENUES Taxes 822,506$ -$ -$ 822,506$ Intergovernmental 1,264,173 - 523,392 1,787,565 Charges for services 486,443 8,027 - 494,470 Licenses and permits 4,500 - - 4,500 Investment revenue 9,262 5,343 14,828 29,433 Donations 90,084 - - 90,084 Miscellaneous 43,956 --43,956 Total revenues 2,720,924 13,370 538,220 3,272,514 EXPENDITURES Current Culture and recreation 1,667,994 - - 1,667,994 Public safety 256,444 - - 256,444 Public health and sanitation 303,950 - - 303,950 Planning and development 396,101 - - 396,101 Miscellaneous - 35 - 35 Debt service Principal retirement - - 185,000 185,000 Interest and other charges - - 47,278 47,278 Capital outlay 1,096,882 --1,096,882 Total expenditures 3,721,371 35 232,278 3,953,684 Excess [deficiency] of revenues over [under] expenditures [1,000,447] 13,335 305,942 [681,170] Other financing sources [uses] Transfers in 1,472,014 --1,472,014 Total other financing sources [uses]1,472,014 --1,472,014 Net change in fund balance 471,567 13,335 305,942 790,844 Fund balance - Beginning of year 2,713,491 514,201 633,653 3,861,345 Prior period adjustment 18,328 --18,328 Fund balance - Beginning of year, restated 2,731,819 514,201 633,653 3,879,673 Fund balance - End of year 3,203,386$ 527,536$ 939,595$ 4,670,517$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS See independent auditor's report on the financial statements. 77 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol ASSETS Cash and investments 262,848$ 4,661$ 28,751$ 352,039$ 234$ Receivables Accounts -2,012 --- Total assets 262,848$ 6,673$ 28,751$ 352,039$ 234$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 62,865$ -$-$3,173$-$ Total liabilities 62,865 --3,173 - Fund balance: Restricted - 6,673 - 348,866 234 Committed 199,983 - 28,751 -- Assigned ----- Total fund balance [deficit]199,983 6,673 28,751 348,866 234 Total liabilities and fund balances 262,848$ 6,673$ 28,751$ 352,039$ 234$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2019 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ ------ 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ -$6,147$ -$22,554$ -$71,803$ -6,147 -22,554 -71,803 186,307 ---- - - 708,563 435,642 1,274 6,493 303,573 -----145,732 186,307 708,563 435,642 1,274 6,493 449,305 186,307$ 714,710$ 435,642$ 23,828$ 6,493$ 521,108$ See independent auditor's report on the financial statements. 7 Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations ASSETS Cash and investments 135,189$ 82$-$41,125$28,571$ Receivables Accounts ----- Total assets 135,189$ 82$-$41,125$28,571$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable -$-$-$-$458$ Total liabilities ----458 Fund balance: Restricted ----- Committed 135,189 82 - 41,125 28,113 Assigned ----- Total fund balance [deficit]135,189 82 -41,125 28,113 Total liabilities and fund balances 135,189$ 82$-$41,125$28,571$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,371,618$ -------2,012 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ -$377$-$ -$-$-$2,867$ 170,244$ -377 ----2,867 170,244 -- 26,141 -- 1,954 - 570,175 30,730 49,764 - 99 16,845 - 501,253 2,487,479 -------145,732 30,730 49,764 26,141 99 16,845 1,954 501,253 3,203,386 30,730$ 50,141$ 26,141$ 99$16,845$ 1,954$ 504,120$ 3,373,630$ See independent auditor's report on the financial statements. 7 Business Special Bicentennial Improvement Neighborhood Parks & Special Center District Park Recreation Alcohol Revenues Taxes -$-$-$-$-$ Intergovernmental - - - 227,304 227,304 Charges for services - 83,916 - - - Licenses and permits - - 4,500 - - Investment revenue - - - - - Donations - - - - - Miscellaneous ----- Total Revenues -83,916 4,500 227,304 227,304 Expenditures Current Culture and recreation 663,614 - - - - Public safety - - - - - Public health and sanitation - - - - 227,304 Planning and development - 85,201 - - - Capital outlay ---150,959 - Total Expenditures 663,614 85,201 -150,959 227,304 Excess [deficiency] of revenues over [under] expenditures [663,614] [1,285] 4,500 76,345 - Other financing sources [uses] Transfers in 765,916 ---- Total other financing sources [uses]765,916 ---- Net change in fund balance 102,302 [1,285] 4,500 76,345 - Fund balance, beginning of year 97,681 7,958 24,251 272,521 234 Prior period adjustment ----- Fund balance, beginning of year, restated 97,681 7,958 24,251 272,521 234 Fund balance, end of year 199,983$ 6,673$ 28,751$ 348,866$ 234$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS Community Sales Tax Downtown Development Economic TIF South State 911 Revolving Development District #1 9th CID Grants Communications -$ 344,976$ 234,765$ 242,765$ -$-$ ----351,254 344,954 ----- - ----- - - - 4,688 27 - 4,234 ----- - ---13,411 -- -344,976 239,453 256,203 351,254 349,188 ----- - -----256,444 ----- - - - 41,767 256,176 - - -533,898 --352,774 - -533,898 41,767 256,176 352,774 256,444 -[188,922]197,686 27 [1,520] 92,744 ------ ------ -[188,922]197,686 27 [1,520] 92,744 186,307 897,485 237,956 1,247 8,013 356,561 ------ 186,307 897,485 237,956 1,247 8,013 356,561 186,307$ 708,563$ 435,642$ 1,274$ 6,493$ 449,305$ See independent auditor's report on the financial statements. Kenwood Special Cove Law Police Federal DARE Capital Enforcement Grants Grants Donations Revenues Taxes -$ -$-$-$-$ Intergovernmental - - 25,557 37,800 - Charges for services ----- Licenses and permits ----- Investment revenue ----- Donations ----- Miscellaneous ----15,752 Total Revenues --25,557 37,800 15,752 Expenditures Current Culture and recreation - ---- Public safety ----- Public health and sanitation ----- Planning and development - - - - 12,957 Capital outlay 39,910 -19,341 -- Total Expenditures 39,910 -19,341 -12,957 Excess [deficiency] of revenues over [under] expenditures [39,910] -6,216 37,800 2,795 Other financing sources [uses] Transfers in 68,350 ---- Total other financing sources [uses]68,350 ---- Net change in fund balance 28,440 -6,216 37,800 2,795 Fund balance, beginning of year 106,749 82 [24,544] 3,325 25,318 Prior period adjustment --18,328 -- Fund balance, beginning of year, restated 106,749 82 [6,216] 3,325 25,318 Fund balance, end of year 135,189$ 82$ -$ 41,125$ 28,113$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2019 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals -$-$-$-$-$-$-$ 822,506$ - - - - - - 50,000 1,264,173 - 402,527 - - - - - 486,443 --- ----4,500 313 - - - - - - 9,262 - - - - - - 90,084 90,084 -12,163 --2,630 --43,956 313 414,690 --2,630 -140,084 2,720,924 - 1,004,380 ----- 1,667,994 -- ----- 256,444 -- ---- 76,646 303,950 -- ----- 396,101 -------1,096,882 -1,004,380 ----76,646 3,721,371 313 [589,690] --2,630 -63,438 [1,000,447] -637,748 -----1,472,014 -637,748 -----1,472,014 313 48,058 --2,630 -63,438 471,567 30,417 1,706 26,141 99 14,215 1,954 437,815 2,713,491 -------18,328 30,417 1,706 26,141 99 14,215 1,954 437,815 2,731,819 30,730$ 49,764$ 26,141$ 99$16,845$ 1,954$ 501,253$3,203,386$ See independent auditor's report on the financial statements. Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Total Cash and investments 519,578$ 2,063$ 5,895$ 527,536$ Total assets 519,578$ 2,063$ 5,895$ 527,536$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$-$-$-$ Total liabilities ---- Fund balances Committed 519,578 2,063 5,895 527,536 Total liabilities and fund balances 519,578$ 2,063$ 5,895$ 527,536$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET December 31, 2019 NONMAJOR PERMANENT FUNDS See independent auditor's report on the financial statements. 82 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 8,027$ -$-$ 8,027$ Investment revenue 5,262 21 60 5,343 Total revenues 13,289 21 60 13,370 Expenditures Miscellaneous 35 --35 Total expenditures 35 --35 Net change in fund balance 13,254 21 60 13,335 Fund balances - beginning of year 506,324 2,042 5,835 514,201 Fund balances - end of year 519,578$ 2,063$ 5,895$ 527,536$ NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES See independent auditor's report on the financial statements. 83 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Investment revenue -$10,000$ 10,000$ (10,000)$ Total revenues -10,000 10,000 (10,000) Expenditures Culture and recreation 663,614 725,000 725,000 61,386 Total expenditures 663,614 725,000 725,000 61,386 Excess [deficiency] of revenues over [under] expenditures [663,614][715,000][715,000]51,386 Other financing sources [uses] Transfers in 765,916 754,496 754,496 11,420 Total other financing sources [uses]765,916 754,496 754,496 11,420 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 102,302 39,496 39,496 62,806 Unreserved fund balance, January 1 97,681 27,647 27,647 70,034 Unreserved fund balance/GAAP fund balance December 31 199,983$ 67,143$ 67,143$ 132,840$ Budgeted Amounts See independent auditor's report on the financial statements. 84 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 83,701$ 90,513$ 90,513$ [6,812]$ Investment revenue - 15 15 [15] Total revenues 83,701 90,528 90,528 [6,827] Expenditures Planning and development 85,201 90,500 90,500 5,299 Total expenditures 85,201 90,500 90,500 5,299 Excess [deficiency] of revenues over [under] expenditures [1,500] 28 28 [1,528] Unreserved fund balance, January 1 6,161 13,303 13,303 [7,142] Unreserved fund balance, December 31 4,661 13,331$ 13,331$ [8,670]$ Reconciliation to GAAP Accounts receivable 2,012 GAAP Fund Balance, December 31 6,673$ Budgeted Amounts See independent auditor's report on the financial statements. 85 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) NEIGHBORHOOD PARK FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Licenses and permits 4,500$ 5,500$ 5,500$ [1,000]$ Investment revenue -50 50 [50] Total revenues 4,500 5,550 5,550 [1,050] Expenditures Capital outlay -10,000 10,000 10,000 Total expenditures -10,000 10,000 10,000 Excess [deficiency] of revenues over [under] expenditures 4,500 [4,450] [4,450] 8,950 Unreserved fund balance, January 1 24,251 32,099 32,099 [7,848] Unreserved fund balance/GAAP fund balance December 31 28,751$ 27,649$ 27,649$ 1,102$ Budgeted Amounts See independent auditor's report on the financial statements. 86 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 213,751$ 13,553$ Investment revenue -100 100 [100] Total revenues 227,304 213,851 213,851 13,453 Expenditures Capital outlay 885 259,000 259,000 258,115 Total expenditures 885 259,000 259,000 258,115 Excess [deficiency] of revenues over [under] expenditures 226,419 [45,149] [45,149] 271,568 Unreserved fund balance, January 1 122,447 109,993 109,993 12,454 Unreserved fund balance/GAAP fund balance December 31 348,866$ 64,844$ 64,844$ 284,022$ Budgeted Amounts See independent auditor's report on the financial statements. 87 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 227,304$ 213,751$ 250,000$ [22,696]$ Total revenues 227,304 213,751 250,000 [22,696] Expenditures Public health and sanitation 227,304 213,751 250,000 22,696 Total expenditures 227,304 213,751 250,000 22,696 Excess [deficiency] of revenues over [under] expenditures ---- Unreserved fund balance, January 1 234 164 234 - Unreserved fund balance/GAAP fund balance December 31 234$ 164$ 234$ -$ Budgeted Amounts See independent auditor's report on the financial statements. 88 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes 344,976$ 354,987$ 354,987$ [10,011]$ Investment revenue -2,000 2,000 [2,000] Total revenues 344,976 356,987 356,987 [12,011] Expenditures Capital outlay 533,898 480,000 555,000 21,102 Total expenditures 533,898 480,000 555,000 21,102 Excess [deficiency] of revenues over [under] expenditures [188,922] [123,013] [198,013] 9,091 Unreserved fund balance, January 1 897,485 878,081 897,485 - Unreserved fund balance/GAAP fund balance December 31 708,563$ 755,068$ 699,472$ 9,091$ Budgeted Amounts See independent auditor's report on the financial statements. 89 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 402,527$ 320,400$ 320,400$ 82,127$ Miscellaneous 12,163 99,800 99,800 [87,637] Total revenues 414,690 420,200 420,200 [5,510] Expenditures Culture and recreation 1,004,380 1,066,349 1,066,349 61,969 Total expenditures 1,004,380 1,066,349 1,066,349 61,969 Excess [deficiency] of revenues over [under] expenditures [589,690][646,149][646,149]56,459 Other financing sources [uses] Transfers in 637,748 665,000 665,000 [27,252] Total other financing sources [uses]637,748 665,000 665,000 [27,252] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 48,058 18,851 18,851 29,207 Unreserved fund balance, January 1 1,706 63,793 63,793 [62,087] Unreserved fund balance/GAAP fund balance December 31 49,764$ 82,644$ 82,644$ [32,880]$ Budgeted Amounts See independent auditor's report on the financial statements. 90 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 2,620,653$ 2,850,000$ 2,850,000$ [229,347]$ Delinquent taxes 43,289 55,000 55,000 [11,711] Motor vehicle taxes 305,502 287,142 287,142 18,360 Special assessments 1,540,285 1,710,000 1,710,000 [169,715] Investment revenue - 2,500 2,500 [2,500] Miscellaneous 94,519 --94,519 Total revenues 4,604,248 4,904,642 4,904,642 [300,394] Expenditures Debt Service Principal retirement 5,413,015 5,729,365 5,729,365 316,350 Interest and other charges 1,536,834 1,589,855 1,589,855 53,021 Total expenditures 6,949,849 7,319,220 7,319,220 369,371 Excess [deficiency] of revenues over [under] expenditures [2,345,601] [2,414,578] [2,414,578] 68,977 Other financing sources [uses] Transfers in 1,632,958 2,000,000 2,000,000 [367,042] Total other financing sources [uses]1,632,958 2,000,000 2,000,000 [367,042] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [712,643] [414,578] [414,578] [298,065] Unreserved fund balance, January 1 1,801,968 942,248 942,248 859,720 Unreserved fund balance, December 31 1,089,325 527,670$ 527,670$ 561,655$ Reconciliation to GAAP Taxes receivable 3,105,131 Deferred revenue [3,052,038] GAAP Fund Balance, December 31 1,142,418$ Budgeted Amounts See independent auditor's report on the financial statements. CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,073,363$ 2,369,000$ 2,369,000$ 704,363$ Investment revenue -4,000 4,000 [4,000] Miscellaneous 416,369 32,000 32,000 384,369 Total revenues 3,489,732 2,405,000 2,405,000 1,084,732 Expenditures Public works 2,405,461 2,471,998 2,471,998 66,537 Total expenditures 2,405,461 2,471,998 2,471,998 66,537 Excess [deficiency] of revenues over [under] expenditures 1,084,271 [66,998] [66,998]1,151,269 Other financing sources [uses] Transfers [out][640,000][125,000] [125,000][515,000] Total other financing sources [uses][640,000][125,000] [125,000][515,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]444,271 [191,998] [191,998] 636,269 Unreserved fund balance, January 1 4,004,416 3,858,116 3,858,116 146,300 Unreserved fund balance, December 31 4,448,687$ 3,666,118$ 3,666,118$ 782,569$ Budgeted Amounts See independent auditor's report on the financial statements. 92 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 20,135,245$ 20,950,319$ 20,950,319$ [815,074]$ Investment revenue - 25,000 25,000 [25,000] Miscellaneous 4,880 10,000 10,000 [5,120] Total revenues 20,140,125 20,985,319 20,985,319 [845,194] Expenditures Public works 10,990,480 15,007,493 15,007,493 4,017,013 Total expenditures 10,990,480 15,007,493 15,007,493 4,017,013 Excess [deficiency] of revenues over [under] expenditures 9,149,645 5,977,826 5,977,826 3,171,819 Other financing sources [uses] Transfers in - 122,200 122,200 [122,200] Transfers [out][7,790,425][6,800,000][6,800,000][990,425] Total other financing sources [uses][7,790,425][6,677,800][6,677,800][1,112,625] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,359,220 [699,974] [699,974] 2,059,194 Unreserved fund balances, January 1 12,283,191 10,134,124 10,134,124 2,149,067 Unreserved fund balances, December 31 13,642,411$ 9,434,150$ 9,434,150$ 4,208,261$ Budgeted Amounts See independent auditor's report on the financial statements. 93 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,228,431$ 3,450,000$ 3,450,000$ [221,569]$ Investment revenue -3,500 3,500 [3,500] Total revenues 3,228,431 3,453,500 3,453,500 [225,069] Expenditures Public works 2,479,468 3,136,223 3,136,223 656,755 Total expenditures 2,479,468 3,136,223 3,136,223 656,755 Excess [deficiency] of revenues over [under] expenditures 748,963 317,277 317,277 431,686 Other financing sources [uses] Transfers [out][491,500][411,500][411,500][80,000] Total other financing sources [uses][491,500][411,500][411,500][80,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 257,463 [94,223] [94,223] 351,686 Unreserved fund balance, January 1 1,468,134 1,695,957 1,695,957 [227,823] Unreserved fund balances, December 31 1,725,597$ 1,601,734$ 1,601,734$ 123,863$ Budgeted Amounts See independent auditor's report on the financial statements. 94 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL (NON - GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 809,636$ 845,997$ 845,997$ [36,361]$ Investment revenue - 350 350 [350] Miscellaneous 97,562 120,000 120,000 [22,438] Total revenues 907,198 966,347 966,347 [59,149] Expenditures Recreation 935,700 955,806 955,806 20,106 Total expenditures 935,700 955,806 955,806 20,106 Excess [deficiency] of revenues over [under] expenditures [28,502]10,541 10,541 [39,043] Other financing sources [uses] Transfers [out]---- Total other financing sources [uses]---- Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [28,502] 10,541 10,541 [39,043] Unreserved fund balance, January 1 50,211 128,476 128,476 [78,265] Unreserved fund balances, December 31 21,709$ 139,017$ 139,017$ [117,308]$ Budgeted Amounts See independent auditor's report on the financial statements. 95 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 312,852$ 312,933$ 312,933$ [81]$ Investment revenue - 2,500 2,500 [2,500] Miscellaneous 109 3,000 3,000 [2,891] Total revenues 312,961 318,433 318,433 [5,472] Expenditures General government 336,880 430,418 430,418 93,538 Total expenditures 336,880 430,418 430,418 93,538 Excess [deficiency] of revenues over [under] expenditures [23,919] [111,985] [111,985] 88,066 Unreserved fund balance, January 1 1,086,849 761,583 761,583 325,266 Unreserved fund balances, December 31 1,062,930$ 649,598$ 649,598$ 413,332$ Budgeted Amounts See independent auditor's report on the financial statements. 96 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) HEALTH INSURANCE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 6,055,450$ 7,523,584$ 6,200,000$ [144,550]$ Investment revenue - 5,000 - - Miscellaneous 49,526 25,000 -49,526 Total revenues 6,104,976 7,553,584 6,200,000 [95,024] Expenditures General government 7,028,930 6,747,554 7,050,550 21,620 Total expenditures 7,028,930 6,747,554 7,050,550 21,620 Excess [deficiency] of revenues over [under] expenditures [923,954] 806,030 [850,550] [73,404] Unreserved fund balance, January 1 3,112,407 761,583 3,112,407 - Unreserved fund balances, December 31 2,188,453$ 1,567,613$ 2,261,857$ [73,404]$ Budgeted Amounts See independent auditor's report on the financial statements. 97 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2019 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 1,430,533$ -$-$ 1,430,533$ Investment revenue - 40 40 [40] Miscellaneous 3,997 7,500 7,500 [3,503] Total revenues 1,434,530 7,540 7,540 1,426,990 Expenditures General government 1,474,000 1,564,012 1,564,012 90,012 Total expenditures 1,474,000 1,564,012 1,564,012 90,012 Excess [deficiency] of revenues over [under] expenditures [39,470][1,556,472][1,556,472]1,517,002 Other financing sources [uses] Transfers in 140,000 1,633,644 1,633,644 [1,493,644] Total other financing sources [uses]140,000 1,633,644 1,633,644 [1,493,644] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 100,530 77,172 77,172 23,358 Unreserved fund balance, January 1 54,128 1,130,194 1,130,194 [1,076,066] Unreserved fund balance, December 31 154,658$ 1,207,366$ 1,207,366$ [1,052,708]$ Budgeted Amounts See independent auditor's report on the financial statements. 98 99 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund - To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund - To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund - To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. Total Workers' Internal Compensation Health Central Service ASSETS Reserve Insurance Garage Funds Current assets: Cash and investments 1,063,855$ 2,188,454$ 200,144$ 3,452,453$ Inventory and prepaid supplies --127,892 127,892 Total current assets 1,063,855 2,188,454 328,036 3,580,345 Capital assets: Capital assets - - 168,234 168,234 Less: accumulated depreciation --153,601 153,601 Total capital assets --14,633 14,633 Total assets 1,063,855 2,188,454 342,669 3,594,978 Deferred outflows of resources: KPERS OPEB deferred outflows of resources - - 2,832 2,832 Pension deferred outflows of resources --22,769 22,769 Total deferred outflows of resources --25,601 25,601 Total assets and deferred outflows of resources 1,063,855$ 2,188,454$368,270$3,620,579$ Liabilities: Current liabilities (payable from current assets): Accounts payable 925$ -$ 45,485$ 46,410$ Current portion of compensated absences payable - - 22,917 22,917 Current portion of accrued claims payable 159,754 489,418 -649,172 Total current liabilities (payable from current assets)160,679 489,418 68,402 718,499 Noncurrent liabilities: Compensated absences payable - - 8,529 8,529 Accrued claims payable 151,818 - - 151,818 Net KPERS OPEB obligation - - 10,128 10,128 Net pension liability --156,268 156,268 Total noncurrent liabilities 151,818 -174,925 326,743 Total liabilities 312,497 489,418 243,327 1,045,242 Deferred inflows of resources KPERS OPEB deferred inflows of resources - - 1,942 1,942 Pension deferred inflows of resources --7,667 7,667 Total deferred inflows of resources --9,609 9,609 Total liabilities and deferred inflows of resources 312,497$ 489,418$ 252,936$1,054,851$ Net Position Invested in capital assets, net of related debt -$-$ 14,633$ 14,633$ Unrestricted 751,358 1,699,036 100,701 2,551,095 Total net position 751,358$ 1,699,036$115,334$2,565,728$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2019 See independent auditor's report on the financial statements. 100 Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Operating revenues Charges for services 312,852$ 6,055,450$ 1,430,533$ 7,798,835$ Miscellaneous 109 49,526 10,668 60,303 Total operating revenues 312,961 6,104,976 1,441,201 7,859,138 Operating expenses General government 409,674 7,137,367 1,435,290 8,982,331 Depreciation --7,699 7,699 Total operating expenses 409,674 7,137,367 1,442,989 8,990,030 Operating income [loss][96,713] [1,032,391][1,788] [1,130,892] Nonoperating revenues [expenses] Investment revenue - - - - Total other operating revenues [expenses]- - - - Income [loss] before transfers [96,713] [1,032,391][1,788] [1,130,892] Transfers from [to] other funds Transfers in - - 140,000 140,000 Total transfers --140,000 140,000 Change in net position [96,713] [1,032,391] 138,212 [990,892] Net position, January 1 848,071 2,731,427 [22,878] 3,556,620 Net position, December 31 751,358$ 1,699,036$ 115,334$ 2,565,728$ COMBINING STATEMENT OF REVENUES, EXPENSES INTERNAL SERVICE FUND CITY OF SALINA, KANSAS For the Year Ended December 31, 2019 AND CHANGES IN NET POSITION See independent auditor's report on the financial statements. 101 Total Workers'Internal Compensation Health Central Service Reserve Insurance Garage Funds Cash flows from operating activities Cash received from customers and users 385,646$ 6,163,888$1,430,533$7,980,067$ Cash paid to suppliers of goods or services [409,516] [7,137,367] [1,187,563] [8,734,446] Cash paid to employees -- [288,556] [288,556] Other operating receipts 109 49,526 10,668 60,303 Net cash provided by [used in] operating activities [23,761] [923,953] [34,918] [982,632] Cash flows from investing activities Interest received ---- Cash flows from noncapital financing activities Transfers in --140,000 140,000 Net cash provided by [used in] noncapital financing activities --140,000 140,000 Net increase [decrease] in cash and cash equivalents [23,761] [923,953] 105,082 [842,632] Cash and cash equivalents, January 1 1,087,616 3,112,407 95,062 4,295,085 Cash and cash equivalents, December 31 1,063,855$ 2,188,454$200,144$ 3,452,453$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. Total Workers' Internal Compensation Health Central Service Reserve Insurance Garage Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] [96,713]$ [1,032,391]$ [1,788]$ [1,130,892]$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense - - 7,699 7,699 [Increase] decrease in inventory - - [16,406] [16,406] [Increase] decrease in deferred outflows - - 1,085 1,085 Increase [decrease] in accounts payable 158 - [2,120] [1,962] Increase [decrease] in accrued compensated absences - - [27,942] [27,942] Increase [decrease] in net pension liability - - 1,719 1,719 Increase [decrease] in KPERS OPEB liability - - 4,659 4,659 Increase [decrease] in claims payable 72,794 108,438 - 181,232 Increase [decrease] in deferred inflows --[1,824] [1,824] Net cash provided by [used in] operating activities [23,761]$ [923,953]$ [34,918]$ [982,632]$ For the Year Ended December 31, 2019 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS (Continued) COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 103 104 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund - To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund - To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund - To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund - To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund - To account for monies held by the police department for use in investigations. Citizenship agency fund - To account for donations received and used for the citizenship fund. Section 125 plan agency fund - To account for monies held for the Section 125 plan. DTF federal forfeiture fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund – To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund – To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund – To account for funds being held in escrow for bonds issued by Municipal Court. Special Fire Court Police Section Beechcraft Bail Assessment Insurance Payroll Bond and Investigation 125 DTF DTF Remediation Bond Escrow Proceeds Clearing Restitution Account Citizenship Plan Local Reserve Settlement Escrow Totals ASSETS: Cash and investments 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total assets 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ LIABILITIES: Accounts payable 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ Total liabilities 116,682$ [1,012]$ [356,434]$ 22,527$ 3,383$ 28,827$ 197,372$30,068$46,313$181,235$ 1,135$270,096$ December 31, 2019 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS See independent auditor's report on the financial statements. Balance Balance December 31,December 31, 2018 Additions Deductions 2019 Cash and investments Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total Assets 312,065$ 448,888$ 490,857$ 270,096$ Accounts Payable Special Assessment Escrow 108,806$ 7,876$ -$ 116,682$ Fire Insurance Proceeds 18,967 35,627 55,606 [1,012] Payroll Clearing [339,790] - 16,644 [356,434] Court Bond and Restitution 18,811 3,716 - 22,527 Police Investigation Account 3,381 2 - 3,383 Citizenship Trust 30,797 18,116 20,086 28,827 Section 125 Plan Fund 215,857 348,820 367,305 197,372 DTF Local 41,240 14,896 26,068 30,068 DTF Reserve 33,475 17,986 5,148 46,313 Beechcraft Remediation Settlement 179,386 1,849 - 181,235 Bail Bond Escrow 1,135 --1,135 Total liabilities 312,065$ 448,888$ 490,857$ 270,096$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended December 31, 2019 AGENCY FUNDS See independent auditor's report on the financial statements. 106 67$7,67,&$/6(&7,21 2010Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount %Amount %Governmental activitiesNet investment in capital assets113,001$96% 109,289$93% 112,929$94% 116,585$90% 115,589$ 90% 130,401$ 122% 124,635$108% 129,921$105% 144,846$ 109% 151,527$ 110%Restricted988 1% 1,712 1% 1,082 1% 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2%1,670 1%Unrestricted3,808 3% 6,333 5% 5,511 5% 11,628 9% 11,413 9% (24,922) -23% (10,505) -9% (8,232) -7% (13,759) -10% (14,839) -11% Total governmental activities net position117,797$100% 117,334$100% 119,522$100% 129,423$100% 127,878$ 100% 106,703$ 100% 115,868$100% 123,701$100% 133,453$ 100% 138,358$ 100%Business-type activitiesNet investment in capital assets 48,078$ 75% 44,227$ 63% 50,857$ 69% 57,103$ 75% 61,721$ 75% 68,107$ 80% 62,427$ 71% 63,316$ 71% 62,368$ 69% 63,301$ 68%Restricted1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2%1,368 1%Unrestricted14,306 22% 24,528 35% 21,450 29% 17,794 23% 19,545 24% 15,610 18% 23,621 27% 24,255 27% 26,503 29%28,883 31%Total business-type activities net position63,937$ 100% 70,308$ 100% 73,860$ 100% 76,450$ 100% 82,778$ 100% 85,229$ 100% 87,560$ 100% 89,083$ 100% 90,383$ 100% 93,552$ 100%Primary governmentNet investment in capital assets 161,080$ 89% 153,516$82% 163,786$85% 173,688$84% 177,311$ 84% 198,508$ 103% 187,062$92% 193,237$91% 207,213$ 93% 214,828$ 93%Restricted2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% 3,878 2%3,038 1%Unrestricted18,115 10% 30,867 16% 26,961 14% 29,422 14% 30,959 15% (9,312) -5% 13,116 6% 16,023 8% 12,744 6% 14,044 6%Total primary government net position181,736$100% 187,599$100% 193,382$100% 205,873$100% 210,658$ 100% 191,932$ 100% 203,428$100% 212,784$100% 223,835$ 100% 231,910$ 100%Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 20192019201820172013201120162014Schedule 1City of Salina, KansasNet Position by ComponentLast Ten Fiscal Years20152012Fiscal Year(accrual basis of accounting)(in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities: General government 10,845$ 13,614$ 11,278$ 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ Public safety 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 Public works 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 Public health and sanitation 1,365 1,368 1,383 1,369 347 995 1,095 1,126 1,256 1,156 Culture and recreation 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 Planning and development 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 Interest on long term debt 2,256 1,650 1,914 1,953 1,817 1,774 2,971 1,725 2,117 2,169 Total governmental activities expenses 55,128 55,212 53,298 53,221 54,340 52,077 53,918 54,811 59,145 59,479 Business-type activities: Solid waste disposal 3,010 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 Water and sewer 14,050 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,294 Sanitation 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,266 Golf course 817 825 723 768 837 821 792 852 926 888 Total business-type activities expenses 20,138 19,628 20,128 21,955 20,041 16,208 19,977 21,045 20,917 20,319 Total primary government expenses 75,266$ 74,840$ 73,426$ 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 79,798$ Program Revenues Governmental activities: Charges for services General government 5,143$ 6,106$ 6,328$ 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ Public safety 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 Public works 198 262 306 277 255 193 238 348 285 309 Public health and sanitation 37 43 46 34 46 46 44 50 47 46 Culture and recreation 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 Planning and development 144 153 158 161 167 73 140 91 150 104 Operating grants and contibutions 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 Capital grants and contributions - - - - - - 733 - - - Total governmental activities program revenues 15,723 16,377 17,351 16,342 15,900 12,958 15,150 14,642 14,710 14,271 Business-type activities: Charges for services Solid waste disposal 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 Water and sewer 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,255 Sanitation 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,276 Golf course 736 636 783 719 811 820 789 798 756 810 Operating grants and contributions - 202 - - - - - - - - Capital grants and contributions -3,804 274 -115 ---- - Total business-type activities program revenues 22,419 27,784 25,755 24,309 25,245 24,927 25,657 26,703 27,061 27,423 Total primary government program revenues 38,142$ 44,161$ 43,106$ 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,694$ Net (Expense) Revenue Governmental activities (39,405)$ (38,835)$ (35,947)$ (36,879)$ (38,440)$ (39,119)$ (38,768)$ (40,169)$ (39,800)$(45,208)$ Business-type activities 2,281 8,156 5,627 2,354 5,204 8,719 5,680 5,658 6,143 7,103 Total primary government net expense (37,124)$ (30,679)$ (30,320)$ (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$(33,657)$(38,105)$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 7,803$ 7,783$ 8,272$ 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ Property taxes, debt service 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 Motor vehicle taxes 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 Sales tax, general purpose 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 Selective sales tax 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 Investment revenues 81 77 66 67 98 86 148 92 183 670 Miscellaneous 565 872 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 Transfers, net 92 199 30 999 787 3,819 3,600 4,309 4,831 4,781 Total governmental activities 33,440 35,097 35,481 45,748 38,569 43,448 47,851 48,002 48,034 50,111 Business-type activities: Investment revenues 67 84 79 49 51 56 78 129 233 - Miscellaneous 341 330 434 279 97 - - 103 153 846 Reimbursements 180 132 79 - Transfers, net (92)(199)(30)(950)-(3,781)(3,581) (4,367) (4,831) (4,781) Total business-type activities 316 215 483 (622)328 (3,593) (3,424) (4,135) (4,445) (3,935) Total primary government 33,756$ 35,312$ 35,964$ 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ Change in Net Position Governmental activities (5,965)$ (3,738)$ (466)$ 8,869$ 129$ 4,329$ 9,083$ 7,833$ 8,233 4,902 Business-type activities 2,597 8,371 6,110 1,732 5,532 5,126 2,256 1,523 1,698 3,169 Total primary government (3,368)$ 4,633$ 5,644$ 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 9,931$ 8,071$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Fiscal Year Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 2010 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved 99$ -$ -$-$-$-$-$-$-$-$ Nonspendable - 90 116 81 107 111 131 153 152 212 Restricted ------ -- -- Committed ------ -- -- Assigned - 293 540 331 239 199 136 214 340 274 Unreserved/unassigned 3,518 3,454 3,172 3,138 3,908 4,530 4,765 6,516 6,251 8,821 Total general fund 3,617 3,837$ 3,828$ 3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ Restatement 156 Restated fund balance 3,773$ All other governmental funds Reserved 6,413$ -$ -$-$-$-$-$-$-$-$ Nonspendable - - -- -- -- -- Restricted - 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 Committed - 127 (516) 7,486 9,886 8,695 14,284 10,072 7,325 8,086 Assigned - 4,323 4,087 3,146 1,280 619 1,043 641 1,227 963 Unreserved/unassigned (1,130) - - - - (10,537) (6,823) (28)(852)(7,804) Total all other governmental funds 5,283$ 8,061$ 6,890$ 14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Source: City of Salina Comprehensive Annual Financial Reports, 2010-2019 2011 (Note 1) Fiscal Year Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenues Taxes (see Schedule 5) 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Intergovernmental 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 Special assessments 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 Licenses and permits 11 6 8 9 7 10 7 6 3 4 Charges for services 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 Investment revenue 64 69 47 40 59 47 142 79 157 670 Reimbursements 70 32 36 9,015 123 491 1,406 -- - Donations 241 83 141 111 238 90 Miscellaneous 448 599 537 810 799 1,853 4,315 1,851 884 1545 Total revenues 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 58,774 Expenditures General government 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 Public safety 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 23,692 Public works 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 Public health and sanitation 1,332 1,330 1,343 1,344 319 982 1,078 1,097 1,236 1,121 Culture and recreation 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 Planning and development 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 Miscellaneous 32 - - - - - --- - Capital outlay 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 Debt service Principal 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 Interest 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 Deposit to escrow 107 -92 ------- Total expenditures 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 78,262 Other financing sources (uses) Bonds and notes issued 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 Bond and note premium 47 23 60 185 302 369 1,503 95 70 443 Transfers in 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 Transfers out (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) Issuance costs - - - - - --- - Other -156 - - - - --- - Total other financing sources (uses)7,173 9,046 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16,174 Net change in fund balance (11,898)$2,803$ 574$ 6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ Debt service as a percentage of non-capital expenditures 21% 17% 28% 18% 18% 20% 50% 16% 37% 28% Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Real estate 9,756$ 10,288$ 10,466$ 10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ Delinquent 278 274 245 248 235 279 246 210 276 190 Motor vehicle 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 General sales 11,117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 Selective sales 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 Other taxes 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7,240 6,975 Total taxes 32,702$ 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Assessed ValueFiscal (Budget) Year Real Estate Personal Property State AssessedTotal, Excluding Motor Vehicles Tax RateMotor Vehicle (Note 1)Total, Taxable Assessed ValueEstimated Total Market Value (Note 2)Assessed Value to Est. Market Value2010 358,979,211$ 24,760,806$ 13,730,609$ 397,470,626$ 25.855 50,330,252$ 447,800,878$ 2,893,359,541$ 15.482011 367,750,803$ 19,918,188$ 14,685,585$ 402,354,576$ 26.022 47,406,062$ 449,760,638$ 2,869,531,746$ 15.672012369,416,422$ 18,654,394$ 15,779,466$ 403,850,282$ 26.272 47,553,744$ 451,404,026$ 2,884,188,981$ 15.652013370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,889,385,914$ 15.712014376,131,346$ 13,652,885$ 17,670,147$ 407,454,378$ 27.080 48,865,900$ 456,320,278$ 2,917,267,724$ 15.642015381,087,426$ 12,607,815$ 18,984,453$ 412,679,694$ 27.311 50,350,566$ 463,030,260$ 2,957,531,741$ 15.662016389,872,825$ 11,653,719$ 19,323,055$ 420,849,599$ 27.603 51,833,505$ 472,683,104$ 3,046,949,034$ 15.512017399,918,216$ 10,900,308$ 19,671,685$ 430,490,209$ 27.311 50,970,796$ 481,461,005$ 3,097,885,103$ 15.542018403,835,383$ 10,130,718$ 20,485,144$ 434,451,245$ 26.129 53,336,677$ 487,787,922$ 3,150,409,123$15.482019421,108,311$ 11,173,863$ 22,113,195$ 454,395,369$ 28.394 54,687,311$ 509,082,680$ 3,294,115,685$15.45Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort.Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value.Source: Saline County ClerkNote 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value.Schedule 6City of Salina, KansasAssessed and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years112 City of SalinaSaline CountyUSD 305 (2) Other (1)Fiscal (Budget) YearOperating MillageDebt Service MillageTotal City MillageOperating MillageDebt Service MillageTotal County MillageOperating MillageDebt Service MillageTotal USD Millage Other2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.0552011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.4982012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.6572013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.7972014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.8792015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.0372016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.9992017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.1532018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.1402019 22.285 6.109 28.394 38.437 38.437 46.776 10.746 57.522 13.988 138.341Source: Saline County Treasurer(2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered bythese jurisdictions.Schedule 7City of Salina, KansasDirect and Overlapping Property Tax RatesLast Ten Fiscal Years(rate per $1,000 of assessed value)(1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas StateExtension District #3.Total TaxpayerType of BusinessAssessed Valuation% of Total RankAssessed Valuation% of Total Valuation RankEvergy (Westar Energy (Western Resources) Utility5,191,056$ 1.55% 413,682,027$ 3.01%1SFC Global Supply Chain, Inc. (Schwan's)Pizza Manufacturing10,144,446 3.03% 16,855,966 1.51%2Kansas Gas ServiceUtility3,449,876 1.03% 74,415,353 0.97%3RAF Salina LLCRetail Shopping Mall8,704,250 2.60% 24,296,499 0.95%4S&B MotelsMotel-3,774,927 0.83%5Central Mall Realty Holding LLC Regional Shopping Center-2,868,321 0.63%6Union PacificRailroad-2,570,668 0.57%7Menard Inc.Home Improvement-2,465,098 0.54%8IndividualResidential-2,440,724 0.54%9Sams Real Estate Business Trust/Walmart Discount Retail Stores-2,286,508 0.50%10Wal-mart Real Estate Business TrustDiscount Retail Stores3,913,855 1.17% 5-Great Plains ManufacturingManufacturing2,526,984 0.75% 10-Gateway PropertiesShopping Mall (Midstate)3,556,009 1.06% 6 -Southwestern BellTelephone Utility3,455,419 1.03% 8-Sunflower BankBanking Institution2,749,200 0.82% 9-Salina Regional Health CenterHospital and Medical Offices5,584,461 1.67% 3-Combined Valuation of the Ten Largest Taxpayers49,275,556$ 45,656,091$ City Valuation335,262,182$ 454,395,369$ Percent of Total City Assessed Valuation14.70%10.05%Source: Saline County Clerk's Office or recent OSSchedule 8City of Salina, KansasPrincipal Property TaxpayersCurrent Year and Ten Years Ago2010 (2009 Assessed Value)2019 (2018 Assessed Value) Fiscal (Budget) Year Taxes Levied for the fiscal year Amount Percentage Delinquent Collections (1) Amount Percentage of levy 2010 10,276,905$ 9,704,937$ 94.4% 278,656$ 9,983,593$ 97.1% 2011 10,415,491$ 10,287,770$ 98.8% 273,843$ 10,561,613$ 101.4% 2012 10,570,420$ 10,411,299$ 98.5% 245,086$ 10,656,385$ 100.8% 2013 10,576,448$ 10,145,404$ 95.9% 248,184$ 10,393,588$ 98.3% 2014 10,908,147$ 10,776,688$ 98.8% 398,820$ 11,175,508$ 102.5% 2015 11,316,065$ 10,460,246$ 92.4% 617,496$ 11,077,742$ 97.9% 2016 11,740,993$ 10,972,299$ 93.5% 245,577$ 11,217,876$ 95.5% 2017 11,254,398$ 11,239,051$ 99.9% 209,950$ 11,449,001$ 101.7% 2018 11,260,358$ 10,803,591$ 95.9% 276,340$ 11,079,931$ 98.4% 2019 12,201,319$ 12,028,761$ 98.6% 376,578$ 12,405,339$ 101.7% Source: Saline County Treasurer's Office (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Current Year Tax Distributions Total Tax Distributions Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019City Direct Tax RateGeneral 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%Special purpose 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.75% 0.75% 0.75%County-wide Tax Rate1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Portion of County-wide tax allocated to City (July Percentage)61.58% 63.34% 61.72% 60.86% 60.23% 60.28% 60.28% 60.28% 59.85% 60.33%Source: Kansas Department of RevenueSchedule 10City of Salina, KansasDirect Sales Rate by Taxing EntityLast Ten Fiscal YearsIn addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016.Fiscal Year 20182019# Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts WaterRate ClassBilled Sold Billed Sold Billed SoldBilled Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential17,838 1,127,864 17,899 1,194,629 17,893 1,225,931 17,966 989,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 18,130 963,387 18,155 864,810 Commercial1,568 350,633 1,574 372,499 1,565 38,547 1,579 348,968 1,599 353,675 1,600 350,767 1,603 345,232 1,606 345,250 1,614 340,960 1,607 352,051 Industrial44 183,166 44 180,277 42 174,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 Government85 42,714 97 55,910 99 54,618 99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 Apartment172 71,121 168 72,562 169 70,263 168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 Schools85 46,386 85 53,679 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 Industrial special1 44,457 1 44,051 1 40,448 1 20,439 - - - - - - - - - - - - Consumed in production17 32,604 13 22,728 12 19,266 12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 Rural water1 23,854 1 28,621 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 Hospitals12 18,503 10 15,674 10 17,896 9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 Religious/non profit39 5,569 38 5,690 38 5,399 37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 Other taxable deductions- - - 699 - - - - - - - - - - - - - - - - Engineering studies8 5,266 7 3,754 8 6,104 8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 Providing taxable service2 5,494 2 4,827 2 6,118 2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 Sale of component parts8 5,851 8 5,454 8 5,726 6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 Fire hydrant3 2,424 3 1,389 4 2,533 3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 Industrial consumed in production3 4,083 3 3,260 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 Sales of farm equipment1 213 1 56 1 83 1 107 1 48 1 53 1 54 1 104 1 56 1 124 19,887 1,970,202 19,954 2,065,759 19,937 1,754,027 20,018 1,793,771 20,111 1,801,577 20,153 1,779,999 20,193 1,717,766 20,192 1,753,343 20,196 1,734,098 20,210 1,621,853 Water Rate Schedule:Monthly meter charge (5/8")4.51$ $4.60$4.74$4.88$5.03$5.20$5.36$5.52$5.74$5.94Commodity charge (per 000 gal.):0 - 2000 gal.2.55$ $3.77$3.88$4.04$4.24$4.45$4.48$4.77$4.96$5.132001 - 10,000 galOver 10,000 gal.Excess use charge5.10$ $7.54$7.76$8.08$8.48$8.90$9.16$9.54$9.92$10.26Wastewater Rate Schedule:Monthly base charge6.42$ $6.57$6.77$6.97$7.11$7.22$7.36$7.51$7.81$8.08Unit cost (per 000 gal.):3.08$ $4.48$4.61$4.79$4.94$5.01$5.19$5.29$5.51$5.70Water sold is expressed in thousands of gallons.Number of Accounts billed is the annual number of billings for each class divided by 12.Monthly meter charge increases with the size of the meter.Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption.2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rateSource: City of Salina Water Customer Accounting Office.2012Schedule 11City of Salina, KansasWater Sales by Class of CustomerLast Ten Fiscal Years2011201420172016201020132015 Fiscal YearGeneral Obligation Bonds Loans Payable Capital Lease Temporary NotesGeneral Obligation BondsWater Revenue Bonds Loans PayableTemporary NotesTotal Primary GovernmentPercentage of Personal Income Per Capita2010 53,120,952$-$-$ 2,500,000$ 8,614,576$ 1,580,000$ -$ -$ 65,815,528$ 3.8% 1,425.20$ 2011 55,225,670$-$-$ 3,400,000$ 7,417,907$ 16,193,925$-$ -$ 82,237,502$ 4.3% 1,723.80$ 2012 49,109,575$-$-$ 1,485,000$ 9,613,926$ 15,850,228$-$ -$ 76,058,729$ 3.8% 1,583.07$ 2013 49,631,797$-$-$ 3,800,000$ 8,519,799$ 15,226,532$-$ -$ 77,178,128$ 3.7% 1,613.05$ 2014 50,033,555$-$ 176,235$ 5,000,000$ 9,587,351$ 14,592,836$ 6,208,102$ -$ 85,598,079$ 4.1% 1,788.25$ 2015 50,840,632$-$ 479,366$ 5,995,000$ 8,539,773$ 13,949,139$ 5,753,620$ -$ 85,557,530$ 4.1% 1,789.42$ 2016 51,816,399$ 12,157,127$ 321,174$ 11,505,000$ 7,640,381$ 13,285,443$ 7,432,024$ -$ 104,157,548$ 5.0% 2,200.39$ 2017 55,994,305$ 12,171,090$ 157,868$ 6,811,742$ 6,520,433$ 12,606,747$ 8,862,810$ -$ 103,124,995$ 4.9%2,194.43$ 201851,968,310$12,185,053$ -$ 18,123,505$ 5,282,578$ 11,898,051$10,632,351$ -$ 110,089,848$ 4.9%2,342.64$ 201954,607,702$12,640,000$ -$ 11,170,000$ 4,102,298$ 10,330,000$46,354,852$ -$ 139,204,852$ 6.0%2,979.81$ Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019Governmental ActivitiesBusiness-Type ActivitiesSchedule 12City of Salina, KansasRatio of Outstanding Debt by TypeLast Ten Fiscal Years Fiscal YearGeneral Obligation Bonds Capital LeaseTemporary Notes TotalLess Debt Service FundNet General Bonded DebtPercentage of Actual Taxable Value of Property Per Capita2010 61,735,528$-$ 2,500,000$ 64,235,528$ 571,873$ 63,663,655$ 14.2% 1,378.60$2011 62,443,577$-$ 3,400,000$ 65,843,577$ 1,236,026$ 64,607,551$ 14.4% 1,354.26$2012 58,723,501$-$ 1,485,000$ 60,208,501$ 582,412$ 59,626,089$ 13.2% 1,241.05$2013 58,151,596$-$ 3,800,000$ 61,951,596$ 707,763$ 61,243,833$ 13.5% 1,280.02$2014 59,620,906$ 176,235$ 5,000,000$ 64,797,141$ 407,864$ 64,389,277$ 14.1% 1,345.17$2015 59,380,405$ 479,366$ 5,995,000$ 65,854,771$ 745,339$ 65,109,432$ 14.1% 1,361.75$2016 59,456,780$ 321,174$ 11,505,000$ 71,282,954$ 1,248,914$ 70,034,040$ 14.8% 1,479.51$2017 62,514,738$ 157,868$ 6,811,742$ 69,484,348$ 1,509,863$ 67,974,485$ 14.1% 1,446.45$2018 57,250,888$-$ 18,123,505$75,374,393$1,851,358$ 73,523,035$15.1% 1,564.52$2019 58,710,000$-$ 11,170,000$69,880,000$1,851,358$ 68,028,642$13.4% 1,456.22$Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019General Bonded Debt OutstandingSchedule 13City of Salina, KansasRatio of Net General Bonded Debt OutstandingLast Ten Fiscal Years City of Salina, Kansas Direct and Overlapping Governmental Activities Debt Jurisdiction Net General Obligation Bonded Debt Outstanding Percentage Applicable to City of Salina Amount Applicable to the City of Salina Direct: City of Salina 73,523,035$ 100.00%73,523,035$ Overlapping: Salina Airport Authority 20,175,000 100.00% 20,175,000 Saline County 220,693 73.98% 163,268 USD 305 109,280,000 93.20%101,854,179 Total Overlapping Debt 129,675,693 122,192,447 Total Direct and Overlapping Debt 203,198,728$ 195,715,482$ Per Capita Direct and Overlapping debt 4,093.35$ Source: Saline County Clerk Schedule 14 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. As of December 31, 2019 Assessed Valuation509,082,680$ Debt Limit (30% of Assessed Value)152,724,804 Debt applicable to limit:Total Bonded Debt118,785,263$ Less GO Debt Attributable to Exempt Purposes(4,116,514) Less Revenue Bonds(11,122,175) Less Capital Leases-Less Loans Payable(34,738,703) Less Fund Balance designated for Debt Service(1,142,418) Total Debt Applicable to Limitation67,665,453$ Legal debt margin85,059,351$ 2010201120122013201420152016201720182019Debt Limit134,340,263$ 134,928,191$ 135,421,208$ 136,196,966$ 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 152,724,804Total net debt applicable to limit58,411,185 57,747,032 49,309,445 52,724,034 54,625,691 56,090,293 62,072,485 61,296,184 68,240,457$ 67,665,453$Legal debt margin 75,929,078$ 77,181,159$ 86,111,763$ 83,472,932$ 82,270,392$ 82,818,785$ 79,732,446$ 80,704,353$ 78,095,920$85,059,351$Total net debt applicable to the limit as a percentage of debt limit43% 43% 36% 39% 40% 40% 44% 43% 47% 44%Last Ten Fiscal YearsFiscal YearLegal Debt Margin Calculation for 2019Schedule 15City of Salina, KansasLegal Debt Margin Utility Service Less Operating Net Available Debt Service Fiscal Year Charges Expenses Revenue Principal Interest Coverage 2010 16,565,880$ 11,803,594$ 4,762,286$ 740,000$ 91,450$ 5.73 2011 17,976,508$ 11,905,114$ 6,071,394$ 1,580,000$ 496,760$2.92 2012 19,163,426$ 12,222,431$ 6,940,995$ 340,000$ 596,992$7.41 2013 17,974,089$ 13,373,088$ 4,601,001$ 620,000$ 590,191$3.80 2014 18,964,164$ 12,112,288$ 6,851,876$ 630,000$ 577,791$5.67 2015 19,139,612$ 9,859,974$ 9,279,638$ 640,000$ 565,191$7.70 2016 19,389,348$ 11,800,473$ 7,588,875$ 660,000$ 549,191$6.28 2017 19,958,862$ 13,148,035$ 6,810,827$ 675,000$ 529,391$5.65 2018 20,382,469$ 12,973,621$ 7,408,848$ 705,000$ 509,141$6.10 2019 20,842,606$ 13,269,741$ 7,572,865$ 725,000$ 487,991$6.24 Source: City of Salina Comprehensive Annual Financial Reports, 2010 - 2019 City of Salina Debt Service Schedules Water/Sewer Revenue Bonds Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Debt Service Fiscal Year PopulationPer Capita Personal Income (Saline County)Personal Income, Salina (interpolated)Unemployment RateLabor Force, City of SalinaUSD 305 HeadcountPercentage Free and Reduced LunchCity .5 cent sales taxPer Capita .5 cent sales TaxAs a % of per capita personal income2010 46,180 37,880$ 1,749,298,400$ 6.7% 26,379 7,346 57.8% 4,803,553$104.02$ 0.275%2011 47,707 40,512$ 1,932,705,984$ 6.7% 26,258 7,289 58.7% 5,076,751$106.42$ 0.263%2012 48,045 41,762$ 2,006,455,290$ 6.3% 26,185 7,305 59.1% 5,241,205$109.09$ 0.261%2013 47,846 43,078$ 2,061,109,988$ 5.1% 26,441 7,305 60.7% 5,326,723$111.33$ 0.258%2014 47,867 43,736$ 2,093,511,112$ 5.3% 26,303 7,388 61.3% 5,555,601$116.06$ 0.265%2015 47,813 44,065$ 2,106,879,845$ 3.9% 26,170 7,369 61.8% 5,670,040$118.59$ 0.269%2016 47,336 44,230$ 2,093,647,612$ 3.3% 27,684 7,386 68.7% 5,727,260$120.99$ 0.274%2017 46,994 44,732$ 2,102,135,608$ 2.7% 27,684 7,176 62.1% 5,755,869$122.48$ 0.274%2018 46,994 47,945$ 2,253,127,330$ 3.3% 30,174 7,180 61.7% 5,770,174$122.79$ 0.256%2019 46,716 49,983$ 2,335,005,828$ 2.9% 30,094 7,245 59.2% 5,968,961$127.77$ 0.256%Sources:Increase in per capita Sales Tax (10 years) 22.8%Population: Kansas Division of the Budget.Increase in per capita Personal Income32.0%Personal income for Salina is derived from the population and per capita personal income for Saline CountyPer Capita Personal income as reported by the Bureau of Economic Analysis2019 Per Capita Personal Income staff projection2010-2019 Employment City of SalinaUSD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget DocumentEmployment: Kansas Department of LaborSchedule 17City of Salina, KansasDemographic and Economic StatisticsLast Ten Fiscal YearsFree and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2018-2019 school year is reported as 2018. EmployerType of BusinessEmployees RankPercentage of Labor Force Employees RankPercentage of Labor ForceSalina Regional Health Center Health Care2,093 2 7.9% 1,875 1 6.2%Schwan's Global Supply Chain Frozen Pizza Manufacturing1,850 1 7.0% 1,700 2 5.6%Unified School District No 305 Public School System9353 3.5% 1,500 3 5.0%Great Plains Manufacturing Agricultrual & Landscaping Equipment6505 2.5% 1,100 4 3.7%Exide TechnologiesAutomotive Battery Manufacturer8004 3.0%600 5 2.0%City of SalinaCity Government4937 1.9%425 6 1.4%Salina VortexManufacturing-375 7 1.2%REV GroupManufacturing-300 8 1.0%WalmartRetail-250 9 0.8%SignifyFluorescent Lamps6006 2.3%190 10 0.6%Raytheon AircraftAircraft Manufacturing3578 1.4%-Eldorado NationalBusses/Recreational Vehicle2559 1.0%-OCCKDisability Services26310 1.0%-Total8,296 31.4% 8,315 27.6%Source: Salina Chamber of CommerceSchedule 18City of Salina, KansasPrincipal EmployersCurrent Year and Nine Years Ago20102019 APPENDIX D 2020 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2020 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. Unaudited Revenues, Expenditures and Fund Balances Fiscal Year Ending December 31, 2020 City of Salina, Kansas (Non-GAAP Basis) FUND NAME Fund Number BEG. BALANCE DEBITS CREDITS NET CHANGE END BALANCE Outstanding Encumbrances Unencumbered Cash Balance 12/31/20 General 100 8,095,315.44 45,805,432.68 40,341,804.07 5,463,628.61 13,558,944.05 244,434.00 13,314,510.05 Sales Tax Capital 210 2,712,288.60 10,370,299.53 6,085,679.47 4,284,620.06 6,996,908.66 1,109,312.61 5,887,596.05 Gas Tax 270 1,910,306.87 2,427,792.92 2,220,745.39 207,047.53 2,117,354.40 632,092.01 1,485,262.39 Sanitation 300 1,754,760.80 3,402,091.83 2,981,808.41 420,283.42 2,175,044.22 - 2,175,044.22 Solid Waste 320 4,567,293.38 3,380,769.04 2,320,622.91 1,060,146.13 5,627,439.51 153,796.23 5,473,643.28 Golf 340 25,487.73 863,947.99 844,008.87 19,939.12 45,426.85 - 45,426.85 Water/Wastewater 370 13,271,169.89 23,298,490.59 18,082,897.57 5,215,593.02 18,486,762.91 142,638.80 18,344,124.11 Debt Service 500 1,089,324.32 6,820,952.27 6,244,676.69 576,275.58 1,665,599.90 - 1,665,599.90 Water/Wastewater Debt Service 510 655,428.71 - - - 655,428.71 - 655,428.71 Water/wastewater Capital Reserve 735 11,144,651.26 250,000.00 586,202.51 (336,202.51) 10,808,448.75 292,472.48 10,515,976.27 Solid Waste Reserve 750 1,439,120.33 6,000.00 63,907.25 (57,907.25) 1,381,213.08 - 1,381,213.08 Total 46,665,147.33 96,625,776.85 79,772,353.14 16,853,423.71 63,518,571.04 2,574,746.13 60,943,824.91 Source: City of Salina CONTINUING DISCLOSURE UNDERTAKING $7,645,000_ CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 04/12/2021 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SE RIES 2021-1 DATED APRIL 29, 2021 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29, 2021 (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 inconnection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 29, 2021, 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 theBeneficial 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 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 after the end of the Issuer's Fiscal Year,commencing with the Fiscal Year ending December 31, 2020, file with the MSRB, throughEMMA, the following financial information and operating data (the "Annual Report"): (1)The audited financial statements of the Issuer for the prior Fiscal Year, prepared ona modified accrual basis of accounting other than GAAP. A more detailedexplanation of the accounting basis is contained in the Official Statement relatedto the Obligations. If audited financial statements are not available by the time theAnnual Report is required to be provided pursuant to this Section, the AnnualReport shall contain unaudited financial statements in a format similar to thefinancial statements contained in the final Official Statement relating to theObligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. 2 (2)Updates as of the end of the Fiscal Year of certain financial information andoperating data contained in the final Official Statement related to the Obligations,as described in Exhibit A, in substantially the same format contained in the finalOfficial Statement with such adjustments to formatting or presentation determinedto 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 applyto 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 isprescribed 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 finaldeterminations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or othermaterial notices or determinations with respect to the tax status of the Obligations, or othermaterial 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 person3 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 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, ifmaterial;(15)incurrence of a Financial Obligation of the obligated person, if material, or agreement tocovenants, events of default, remedies, priority rights, or other similar terms of a FinancialObligation 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 similarevents under the terms of a Financial Obligation of the obligated person, any of whichreflect 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 ;\gent, 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 4 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the_ 9l,!Y,):Uld year first above written. = :·· \. . . � :-_ .. �. •a,• I; . ; . \ ? : !:::�;)i;; fa (SEAL\)·.·_;_·_.-, . . . ''\f 7 'j ...... ,. � j ..:.-.... �-t�f{::·•('1-<..J �<·::.�r;. • ·, ''·:'� ,;,()c"'-" .• """� . .-... � ., CITY OF SALINA, KANSAS (Signature Page to Continuing Disclosure Undertaking-2021-A, 2021-1) 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 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON APRIL 12, 2021 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, MELISSA ROSE HODGES; Commissioners, TRENT W. DAVIS, MICHAEL L. HOPPOCK and KARL F. RYAN. Absent: ROD FRANZ. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Director of Finance reported that pursuant to the Notice of Sale duly given, bids for the purchase of General Obligation Temporary Notes, Series 2021-1, dated April 29, 2021, of the City were received on April 12, 2021. A tabulation of said bids is set forth as EXHIBIT A hereto. The Director of Finance reported that staff determined that the bid of TD Securities, New York, New York, was the best bid for the Notes, a copy of which is attached hereto as EXHIBIT B. Thereupon, there was presented a Resolution entitled: A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2021-1, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES AS THEY BECOME DUE; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. Thereupon, Commissioner MICHAEL L. HOPPOCK moved that said Resolution be adopted. The motion was seconded by ComrnissionerTRENTW. 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, as follows: Aye: MELISSA ROSE HODGES, TRENT W. DAVIS, MICHAEL L. HOPPOCK and KARL F. RYAN. Nay: NONE. Thereupon, the Mayor declared the Resolution duly adopted and the Resolution was then duly numbered Resolution No. 21-7946 and was signed by the Mayor and attested by the Clerk. ************** Bid Results EXHIBIT A BID TABULATION SERIES 2021-1 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 The following bids were submitted using PARtrf© and displayed ranked by lowest NIC. Click on the name of each bidder to see the respective bids. Amount Awarded (M) Bidder Name NIC Bid Amount ---i TD Securities 0.249724 :=========--....., J BNYMellon Capital Markets 0.294545 � _-_-_-_-_-_--�[_ _ _ _ J Oppenheimer & Co .• Inc. 0.296298 Piper Sandler & Co �====:::::.::::.::::.::::.::::--. =:J Commerce Bank 0.355359 0.362099 5,230M 5,230M 5,230M 5,230M 5,230M Awarded Totals Issue Size loM 5,230M 26,150M A-1 EXHIBITB BID OF PURCHASER B-1 Wire Inbox Upcoming Calendar I Overview Result Excel TD Securities -New York, NY's Bid Parity Calendar Salina Deal List .,i,w� • I ._.:ir11, IRJ'rv( • �= •• • F.· $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,322,048.00, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the followin rate: Maturit Oat mount $ Cou on % Yield % Dollar Price 05/01/2022 5,230M 2.0000 0.2000 101.806 Bid: 101.760000 Premium: $92,048.00 Net Interest Cost: $13,133.11 NIC: 0.249724 Time Last Bid Received On:04/12/2021 11 :55:02 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: TD Securities, New York , NY Contact: Chris Dimon Title: Telephone:212-827 -7171 Fax: Issuer Name: City of Salina Accepted By: Date: See Schedule attached hereto Company Name: TD Securities (USA) LLC Accepted By: Date: 4/12/21 © 1981-2002 i-Deal LLC, All rights reserved, Trademarks City of Salina, Kansas General Obligation Temporary Notes Series 2021-1 Pricing Summary Maturity Type of Bond 05/01/2022 Serial Coupon Total Bid Information Par Amount of Bonds Reofferin Premium or Discount Gross Production Coupon 2.000% Yield 0.182% Maturity Value 5,230,000.00 $5,230,000.00 Price 101.826% Dollar Price 5 ,325,499.80 $5,325,499.80 $5,230,000.00 95 499.80 $5,325,499.80 Total Underwriter's Discount 0.066% $(3,451.80 Bid 101.160%) _________________________________ 5�,3_2�2�04_8 _.o_o Total Purchase Price Bond Year Dollars Avei e Life �e Coupon Net Interest Cost (NIC) True Interest Cost (TIC) ------------------------------=$�5,,=322.048.00$5,259.06 1.006 Years 2.0000000% 0.2497237% 0.2452526% Stifel, Nicolaus & Company Public Finance EXHIBIT A RESOLUTION NO. 21-7946 A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2021-1, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES AS THEY BECOME DUE; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; Ai� AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the City of Salina, Kansas (the "Issuer") is a municipal corporation, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to the provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the Issuer has caused the following improvements (collectively, the "Improvements") to be made in the City, to-wit: Estimated Ordinance/ Improvement Proiect Description Resolution No. Authority Fund Deposit* Ord. 02-10071; North 9th Street Brid2e Res No. 19-7677 K.S.A. 12-685 et seq.$ 1,905,000.00 Article 12, §5 of the Constitution of the State of Smoky Hill River Renewal Ord. 17-10885 Kansas 1,500,000.00 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,600,000.00 Great Plains Manufacturing Center Convention Hall HV AC Tony's Pizza Event Center Res. 21-7931 K.S.A. 12-1736 et seq.160.426.00 Total: $5,165.426.00 *Excludes costs of issuance. 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 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 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 pursuant to the Act; and WHEREAS, the Issuer proposes to issue its temporary notes to pay a portion of the costs of the Improvements; and WHEREAS, the governing body of the Issuer has advertised the sale of the Notes and at a meeting held in the City on this date, awarded the sale of such Notes to the best bidder; and WHEREAS, the governing body of the Issuer hereby finds and determines that it is necessary for the Issuer to authorize the issuance and delivery of the Notes in the principal amount of $5,230,000* to pay a portion of the costs of the Improvements and pay certain costs of issuing the 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 Note 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, particularly Article 12, § 5 thereof, and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, specifically including KS.A. 10-123, KS.A. 10-620 et seq., K.S.A. 12-685 et seq., KS.A. 12-1736 et seq., and K.S.A. 12-2104, all as amended and supplemented from timeto time."Authorized Denomination" means $5,000 or any integral multiples thereof. ''Beneficial Owner" of the Notes includes any Owner of the Notes and any other Person who, directly or indirectly has the investment power with respect to any of the Notes. ''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. "Business Day" means a day other than a Saturday, Sunday or holiday on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee of DTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the Issuer or, in the Clerk's absence, the duly appointed Deputy, Assistant or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations proposed or promulgated thereunder of the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Notes, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial 2 advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, and all expenses incurred in connection with receiving ratings on the Notes. "Dated Date" means April 29, 2021. ''Debt Service Account" means the Debt Service Account for General Obligation Temporary Notes, Series 2021-1 (within the Bond and Interest Fund) created pursuant to Section 501 hereof. ''Debt Service Requirements" means the aggregate principal payments and interest payments on the Notes 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. ''Defaulted Interest" means interest on any Note 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 isexcluded from gross income for federal income tax purposes and which meet the following conditions: (1)the obligations are (i) not subject to redemption prior to maturity or (ii) the trusteefor 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 thatmay 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 GovernmentObligations (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 theobligations 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'sthat is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. 3 "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. ''Director of Finance" means the duly appointed and acting Director of Finance of the Issuer or, in the Director's absence, the duly appointed Deputy, Assistant or Acting Director of Finance of the Issuer. "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 DTC which provides for a book-entry system, or any agreement between the Issuer and Paying Agent and a successor securities depository duly appointed. ''Event of Default" means each of the following occurrences or events: (a)Payment of the principal and of the redemption premium, if any, of any of the Notes shallnot 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 Notes shall not be made when the sameshall 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 Notes or in this Note Resolution (other than the covenants relating to continuing disclosure requirements) 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 Notes 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. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the governing body of the Issuer to be financed by general obligation bonds, less: (a)the amount of any temporary notes or general obligation bonds of the Issuer which are currentlyOutstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs whichhas been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitledto 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 by or referred to in Section 501 hereof. "Improvement Fund" means the Improvement Fund for General Obligation Temporary Notes, Series 2021-1 created pursuant to Section 501 hereof. 4 "Improvements" means the improvements referred to in the preamble to this Note Resolution 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 Note Resolution. "Interest Payment Date(s)" means the Maturity of the Note. "Issue Date" means the date when the Issuer delivers the Notes to the Purchaser in exchange for the Purchase Price. "Issuer'' means the City and any successors or assigns. "Maturity" when used with respect to any Note means the date on which the principal of such Note 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. "Note Payment Date" means any date on which principal of or interest on any Note is payable. "Note Register" means the books for the registration, transfer and exchange of Notes kept at the office of the Note Registrar. "Note Registrar'' means the State Treasurer and its successors and assigns. "Note Resolution" means this resolution relating to the Notes. "Notes" means the General Obligation Temporary Notes, Series 2021-1, authorized and issued by the Issuer pursuant to this Note Resolution. "Notice Address" means with respect to the following entities: (a)To the Issuer at: City of Salina, Kansas Attn: Deputy City Clerk 300WestAsh Salina, Kansas 67402 5 (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: TD Securities 1 VanderbiltAvenue New York, New York 10017 (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 ''Notice Representative" means: (a)With respect to the Issuer, the Clerk. (b)With respect to the Note Registrar and Paying Agent, the Director of Bond Services. ( c)With respect to any Purchaser, the manager of its Municipal Bond Department. (d)With respect to any Rating Agency, any Vice President thereof. "Official Statement" means Issuer's Official Statement relating to the Notes. "Outstanding" means, when used with reference to the Notes, as of a particular date of determination, all Notes theretofore authenticated and delivered, except the following Notes: (a)Notes theretofore canceled by the Paying Agent or delivered to the Paying Agent forcancellation; (b)Notes deemed to be paid in accordance with the provisions of Article VII hereof; and ( c)Notes in exchange for or in lieu of which other Notes have been authenticated and deliveredhereunder. "Owner'' when used with respect to any Note means the Person in whose name such Note is registered on the Note Register. Whenever consent of the Owners is required pursuant to the terms of this Note Resolution, and the Owner of the Notes, as set forth on the Note Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Notes. 6 Article Article V The principal or Redemption Price of and interest on each Note shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Paying Agent. Such amounts 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 Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Paying Agent in writing. by such Owner; or (b) in the case of a payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amountof Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by suchOwner, not less than 15 days prior to the Record Date for such interest, containing the electronic transferinstructions including the bank, ABA routing number and account number to which such Owner wishes tohave such transfer directed. Notwithstanding the foregoing provisions of this Section, 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 in this paragraph. The Issuer shall notify the 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 45 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice at the address of such Owner as it appears on the Note Register not less than 10 days prior to such Special Record Date. The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Notes 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 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. Section 206. Registration, Transfer and Exchange of Notes. The Issuer covenants that, as long as any of the Notes remain Outstanding, it will cause the Note Register to be kept at the office of the Note Registrar as herein provided. 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 provided in this Section. 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 this Note Resolution. The Issuer shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes provided for by this Note Resolution and the cost of 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, are the responsibility of the Owners of the Notes. 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 Section 3406 of the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Notes. The Issuer and the Note Registrar shall not be required (a) to register the transfer or exchange of any Note 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 Note 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 Note is registered on the Note Register as the absolute Owner of such Note, whether such Note 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 Note 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 Note 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 Note Registrar, the Note Register may be inspected and copied by the Owners ( or a designated representative thereof) of 10% or more in principal amount of the Notes then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Note Registrar. Section 207. Execution, Registration, Authentication and Delivery of Notes. Each of the Notes, including any Notes issued in exchange or as substitutions for the Notes initially delivered, shall be executed for and on behalf of the Issuer by the manual, electronic or facsimile signature of the Mayor, attested by the manual, electronic 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 Notes in the manner herein specified, and to cause the Notes to be registered in the office of the Clerk, which registration shall be evidenced by the manual, electronic or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Notes shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual, electronic or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. The Notes shall be countersigned by the manual, electronic or facsimile signature of the Clerk and the seal of the Issuer shall be affixed or imprinted adjacent thereto following registration of the Notes by the Treasurer of the State of Kansas. In case any officer whose signature appears on any Notes ceases to be such officer before the delivery of such Notes, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Note may be signed by such 11 authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraph. The Issuer 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 Issuer determines (1) that the Securities Depository is unable to properly dischargeits 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 interests in not lessthan 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 fmd 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 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 Issuer, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, 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 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 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 Notes to the successor Securities Depository in appropriate denominations and form as provided herein. Section 211. 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 Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Note shall forthwith 13 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 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 Paying Agent shall repay, withoutliability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Note, andsuch Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecuredobligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, andthen only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liablefor 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)(l) 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 Director of Finance of the Issuer are hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the final Official Statement by the Purchaser in connection with the reoffering of the Notes 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 Notes sufficient copies of the final 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 Notes. The sale of the Notes to the Purchaser and the execution of the official bid form is hereby approved and confirmed. The Mayor and/or the Clerk are hereby authorized to execute the official bid form submitted by the Purchaser. Delivery of the Notes shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoption of this Note Resolution), upon payment of the Purchase Price. ARTICLE III REDEMPTION OF NOTES Section 301. No Redemption of Notes. The Notes shall not be subject to optional redemption and payment prior to their Stated Maturity. 14 ARTICLE IV SECURITY FOR NOTES Section 401. Security for the Notes. The Notes shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Section 402. Levy and Collection of Annual Tax. The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Notes as the same become due, if necessary, by levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. The taxes referred to above shall be extended upon the tax rolls 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 deposited in the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Notes as and when the same become due, 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 Notes when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF NOTE PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Notes, there shall be created within the Treasury of the Issuer the following funds and accounts: (a)Improvement Fund for General Obligation Temporary Notes, Series 2021-1; (b)Debt Service Account for General Obligation Temporary N ates, Series 2021-1; and (c)Rebate Fund for General Obligation Temporary Notes, Series 2021-1. The Funds and Accounts established herein shall be administered in accordance with the provisions of this Note Resolution so long as the Notes are Outstanding. Section 502. Deposit of Note Proceeds. The net proceeds received from the sale of the Notes shall be deposited simultaneously with the delivery of the Notes as follows: (a)All accrued interest and excess proceeds received from the sale of the Notes, if any, shallbe deposited in the Debt Service Account. 15 (b)The remaining balance of the proceeds derived from the sale of the Notes shall be depositedin the Improvement Fund.Section 503. Application of Moneys in the Improvement Fund. 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 of the Issuer 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 of the Issuer; (b) paying interest on the Notes during construction of the Improvements; ( c) paying Costs of Issuance; and ( d) 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 befinanced with proceeds of the Notes provided the following conditions are met: (1) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the governing body of the Issuer in accordance with the laws of the State; (2) a resolution or ordinance authorizing the use of the proceeds of the Notes to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the governing body of the Issuer 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 Notes to include the Substitute Improvements; and ( 4) the use of the proceeds of the Notes to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Notes under State or federal law. (b)The Issuer may reallocate expenditure of Note proceeds among all Improvements financedby the Notes; provided the following conditions are met: (1) the reallocation is approved by the governing body of the Issuer; (2) the reallocation shall not cause the proceeds of the Notes 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 Notes 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 Notes as and when the same become due and the usual and customary fees and expenses of the Note 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 Notes and the fees and expenses of the Note Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent, if other than the Issuer, 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 Note Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Notes are no longer entitled to enforce payment of the Notes 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 Note Resolution and shall be held by the Paying Agent for the benefit of the Owners of the Notes entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the indebtedness for which the Notes were issued shall be transferred and paid into the Bond and Interest Fund. Section 506. Application of Moneys in the Rebate Fund. 16 (a)There shall be deposited in the Rebate Fund such amounts as are required to be depositedtherein 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 Notes shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b)The Issuer shall periodically determine the arbitrage rebate, if any, under Code§ 148(f) ofthe Code 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 Notes 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 Note Resolution, including in particular ArticleVII 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 Notes. 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 Note 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 be credited to the Debt Service Account. ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Note Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Notes. IT an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Notes at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Notes similarly situated: 17 (a)by mandamus or other suit, action or proceedings at law or in equity to enforce the rightsof 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 Note 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 whichmay be unlawful or in violation of the rights of the Owners of the Notes. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Notes shall be for the equal benefit, protection, and security of the Owners of any or all of the Notes, all of which Notes shall be of equal rank and without preference or priority of one Note over any other Note in the application of the funds herein pledged to the payment of the principal of and the interest on the Notes, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Note 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 Notes. 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 Note 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 Notes by this Note 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 Notes shall, subject to any determination in such action or proceeding or applicable law of the State, 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 Notes, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Note Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Notes or scheduled interest payments thereon so paid and discharged. Notes, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Note Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Notes or the interest payments thereon, in trust for 18 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 Notes 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 Notes, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Notes, 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 Note Registrar to give such notice of redemption in compliance with Article Ill. 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 Notes, 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 Notes, 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 Note 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 federalincome tax purposes of the interest on the Notes; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor, Director of Finance and Clerk are hereby authorized and directed to execute theFederal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deedof the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such otheractions 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 Notes will remainexcluded 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 Notes pursuant to Article VII hereof or any other provision of this Note Resolution until such time as is set forth in the Federal Tax Certificate. ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Section 901. Disclosure Requirements. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Undertaking, the provisions of which are lncorporated 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 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, 19 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. 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 Notes, 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 of the Issuer shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Note 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 Notes or of this Note Resolution, may be amended or modified at any time in any respect by resolution or ordinance of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Notes 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 Note; (b)effect a reduction in the amount which the Issuer is required to pay as principal of or intereston any Note; (c)permit preference or priority of any Note over any other Note; or (d)reduce the percentage in principal amount of Notes required for the written consent to any modification or alteration of the provisions of this Note Resolution. Any provision of the Notes or of this Note Resolution may, however, be amended or modified by resolution or ordinance duly adopted by the governing body of the Issuer at any time in any legal respect with the written consent of the Owners of all of the Notes at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Note 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 Notes among Improvements, to provide for Substitute Improvements, to conform this Note 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. 20 Every amendment or modification of the provisions of the Notes or of this Note 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 of the Issuer amending or supplementing the provisions of this Note Resolution and shall be deemed to be a part of this Note Resolution. A certified copy of every such amendatory or supplemental resolution or ordinance, if any, and a certified copy of this Note 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 Note or a prospective purchaser or owner of any Note authorized by this Note Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or ordinance or of this Note 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 resolution or ordinance of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Notes then Outstanding. It shall not be necessary to note on any of the Outstanding Notes any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Notes or this Note Resolution which affects the duties or obligations of the Paying Agent under this Note 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 Notes, if made in the following manner, shall be sufficient for any of the purposes of this Note 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 bya 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 Notes, the amount or amounts, numbers and other identification of Notes, and the date of holding the same shall be proved by the Note Register. In determining whether the Owners of the requisite principal amount of Notes Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Note Resolution, Notes owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Note 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 Notes which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Notes 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 Notes 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 Note Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed if the same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying 21 ADOPTED bytheogc:,yeming body of the Issuer on April 12, 2021. '':'.., (SEAL) ATIEST�: --� 600596.20218\NOTE RESOLUTION-SALINA 2021-1 (Signature Page to Resolution -2021-1 Notes) EXHIBIT A (FORM OF NOTES) REGISTERED NUMBER R-1 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 TEMPORARY NOTE SERIES 2021-1 Maturity Dated CUSIP: Interest Rate: ___ % Date: May 1, 2022 Date: April 29, 2021 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable at maturity or earlier redemption (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price and interest thereon of this Note shall be paid at µiaturity or upon earlier redemption to the person in whose name this Note is registered at the maturity or redemption date thereof, upon presentation and surrender of this Note at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). Such amounts shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Note Register or at such other address as is furnished to the Paying Agent A-1 in writing by such Registered Owner; or (b) in the case of a payment to Cede & Co. by electronic transfer to such Owner upon written notice given to the Note 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 Notes 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 Note Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Note Resolution. Authorization of Notes. This Note is one of an authorized series of Notes of the Issuer designated "General Obligation Temporary Notes, Series 2021-1," aggregating the principal amount of $5,230,000* (the "Notes") issued for the purposes set forth in the Resolution of the Issuer authorizing the issuance of the Notes (the "Note Resolution"). The Notes are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution, particularly Article 12 § 5 thereof, and laws of the State of Kansas, including 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. 12-685 et seq., K.S.A. 12-1736 et seq., and K.S.A. 12-2104, all as amended and supplemented from time to time, and all other provisions of the laws of the State of Kansas applicable thereto. General Obligations. The Notes 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 pledged for the payment of the principal of and interest on this Note and the issue of which it is a part as the same respectively become due. Redemption Prior to Maturity. The Notes are not subject to redemption prior to maturity. Book-Entry System. The Notes are being issued by means of a book-entry system with no physical distribution of note certificates to be made except as provided in the Note Resolution. One Note certificate with respect to each date on which the Notes are stated to mature or with respect to each form of Notes, 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 Notes by the Securities Depository's participants, beneficial ownership of the Notes 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 Note Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Note, as the owner of this Note for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Note, (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 Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Note 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 Note, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Note shall be made in accordance with existing arrangements among the Issuer, the Note Registrar and the Securities Depository. A-2 Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE NOTE RESOLUTION, TIDS GLOBAL NOTE 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 Note may be transferred or exchanged, as provided in the Note Resolution, only on the Note Register kept for that purpose at the principal office of the Note Registrar, upon surrender of this Note together with a written instrument of transfer or authorization for exchange satisfactory to the Note Registrar duly executed by the Registered Owner or the Registered Owner's duly authorired agent, and thereupon a new Note or Notes 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 Note 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 Notes and the cost of a reasonable supply of note blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Note is registered on the Note 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 Notes are issued in fully registered form in Authorized Denominations. Authentication. This Note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Note Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Note 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 Note 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 notes, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Note to be executed by the manual, electronic or facsimile signature of its Mayor and attested by the manual, electronic or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. (Facsimile Seal) ATfEST: By: (facsimile) Deputy City Clerk CITY OF SALINA, KANSAS By: (facsimile) Mayor This General Obligation Temporary Note shall not be negotiable unless and until countersigned below following registration by the Treasurer of the State of Kansas. (Facsimile Seal) (facsimile) Deputy City Clerk A-3 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Note is one of a series of General Obligation Temporary Notes, Series 2021-1, of the City of Salina, Kansas, described in the within-mentioned Note Resolution. Registration Date __________ _ Registration Number: ________ _ Office of the State Treasurer, Topeka, Kansas, as Note Registrar and Paying Agent By: ____________ _ LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Notes: GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 (PRINTED LEGAL OPINION) A-4 NOTE ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Note to which this assignment is affixed in the outstanding principal amount of$ _____ , standing in the name of the undersigned on the books of the Note Registrar. The undersigned do(es) hereby irrevocably constitute and appoint _________ as agent to transfer said Note on the books of said Note Registrar with full power of substitution in the premises. Dated ________ _ Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: By ____________ _ 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 Note has been duly registered in my office according to law as of April 29, 2021. WITNESS my hand and official seal. (Facsimile Seal) (facsimile) Deputy City Clerk A-5 CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS LYNN W. ROGERS, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Note has been filed in the office of the State Treasurer, and that this Note was registered in such office according to law on ___________ _ WITNESS my hand and official seal. (Seal) A-6 By:------------Treasurer of the State of Kansas TRANSCRIPT CERTIFICATE $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TKMPORARY NOTES SERIES 2021-1 DATED APRIL 29, 2021 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 notes (the "Notes"); and do hereby certify as of April 12, 2021, as follows: 1.Meaning of Words and Terms. Capitalized words and terms used herein, unlessotherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such words and terms in the hereinafter defined Note Resolution authorizing the Notes. 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 tothe authorization and issuance of the Notes 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 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 qualifiedand acting officers of the Issuer at and during all the times when action was taken as indicated in the Transcript as follows: Name Melissa Rose Hodges Mike Hoppock Trent Davis Karl Ryan Kaye Crawford Trent Davis Melissa Rose Hodges Mike Hoppock Trent Davis Karl Ryan Title Mayor Mayor Mayor Mayor Mayor Vice-Mayor Vice-Mayor Vice-Mayor Vice-Mayor Vice-Mayor Term of Office January 11, 2021 to Present January 13, 2020 to January 11, 2021 January 14, 2019 to January 13, 2020 January 8, 2018 to January 14, 2019 April 18, 2016 to January 8, 2018 January 11, 2021 to Present 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 Karl Ryan Commissioner April 20, 2015 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 Rod Franz Commissioner January 13, 2020 to Present Kaye Crawford Commissioner April 18, 2011 to January 8, 2018 Jon Blanchard Commissioner April 15, 2013 to January 8, 2018 Joe Hay, Jr. Commissioner January 8, 2018 to January 13, 2020 Jo Vonna Rutherford City Clerk March 25, 2021 to Present Cheryl Mermis Deputy City Clerk March 16, 2020 to Present Shandi Wicks Clerk March 10, 2014 to January 21, 2021 Allison Hamm Deputy City Clerk September 7, 2017 to January 21, 2020 7.Execution of Notes. The Notes have been executed with manual or facsimile signatures;and the manual or facsimile signatures appearing on the face of the Notes are manual or facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer. 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 Notes and on the reverse side of each of the Notes at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Note 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 note included in the Transcript is in the form adopted by the governing body of the Issuer for the Notes. 8.Authorization and Purpose of the Notes. The Notes are being issued pursuant toResolution 21-7946 of the Issuer duly adopted by the governing body of the Issuer on April 12, 2021 (the "Note Resolution") pursuant to K.S.A. 10-123 for the purpose of paying a portion of the costs of certain public improvements (the "Improvements") authorized by. the governing body of the Issuer pursuant to 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. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2104, and Article 12, Section 5 of the Constitution of theState of Kansas, all as amended, and all other applicable provisions of the laws of the State of Kansas.The total principal amount of the Notes does not exceed the cost of the Improvements for which the Notes are issued. A Statement of Cost is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. The interest rates on the Notes on the date of the sale of the Notes were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9.Indebtedness. The currently outstanding applicable indebtedness of the Issuer, includingthe Notes, does not exceed any applicable constitutional or statutory limitations. A schedule that sets forth all currently outstanding general obligation indebtedness of the Issuer is attached hereto as Exhibit B 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 Issuerfor the year 2020 was $510,951,650. 2 11.Non-litigation. There is no controversy, suit or other proceedings of any kind pending orthreatened 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 Notes shown to be authorized in the Transcript; (e) the validity of the Notes, 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 Notes. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 (SEAL) EXHIBIT A EXHIBITB SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of April 29, 2021) General Obligation Bonds: Date Issued 07-15-1102-15-1307-15-1307-30-1407-29-1507-27-1607-27-1607-27-1711-27-1804-24-1904-29-2011-30-2004-29-21Total Series 2011-A 2013-A 2013-B 2014-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A 2020-A 2020-B 2021-A Purpose Internal Improvements Taxable Improvements Improvements Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements Improvements Refunding Improvements Amount of Issue $6,565,000 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 5,210,000 8,450,000 7,645,000 Final Maturity 10-01-2110-01-2810-01-3310-01-3410-01-3510-01-3610-01-3110-01-3710-01-3310-01-3910-01-3510-01-3610-01-41 Amount Outstanding $ 375,000 815,000 2,660,000 4,305,000 5,160,000 5,505,000 11,785,000 8,350,000 1,865,000 10,850,000 5,210,000 8,450,000 7,645,000 $72,975,000 Temporary Notes: Series 2020-1 2021-1 Date Issued 04-29-2004-29-21 Final Maturity Date 05-01-2105-01-22 Original Note Amount $7,050,000 5,230,000 Amount Outstanding $7 ,050,000(1) 5,230,000 12,280,000 co To be retired on May 1, 2021 with proceeds from the Bonds and other available funds. STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, Scon ScHWAB, Kansas Secretary of State, certify that the records of this office reveal the following: The Certificate of Manual Signature for JOVONNA A. RUTHERFORD, CLERK CITY OF SALINA, KANSAS was filed in this office the 16th day of April, A.D. 2021 as provided by K.S.A. 75-4001 through 75-4007. ·IN iEs:'.i':IMOliJY . Wl:iERiC°ir':I hereto. set my hand and cause tobe affixed my official seal. Doneat the City of Topeka, this16th day of April, A.D. 2021 SCOTT SCHWAB KANSAS SECRETARY OF STATE REGISTERED NUMBER R-1 REGISTERED $5,230,000.00 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 t�s ch other entity as is requested by an authorized representative of DTC), ANY . · � SFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE B �� TO ANY PERSON IS WRONGFUL inasmuch as the registered owne hereof, CJO .. & Interest Co., has an interest herein. ,; ,11i';,� ,,., UNITED STATES OF AMERI1• 1' �,l'W,, STATE OF KANSAS ,,i·,lnr,,, COUNTY OF SAL CITY OF SALi GENERAL OBLIGA SE Rate: 2.00% Maturity Date: May 1, ril 29, 2021 :.J!fJJ/''3ilt;J!Jj1A,_ REGISTERED OWNER: C � s�'·on w1tf214 -2555119 CUSIP: 794744DU3 PRINCIPAL TWO HUNDRED THIRTY THOUSAND DOLLARS Ki.OW ''Y THESE PRESENTS: That the City of Salina, in the County of Salin� ,qll'flf!��f K�L e "Issuer"), for value received, hereby acknowledges itself to be indebted and prom�es to pay to the red Owner shown above, or registered assigns, but solely from the source and in thJ( . sp ied, the Principal Amount shown above on the Maturity Date shown above, unless i�pi1on prior to said Maturity Date, and to pay interest thereon at the Interest Rate per computed on the basis of a 360-day year of twelve 30-day months), from the Dated , r from the most recent date to which interest has been paid or duly provided for, payable lier redemption (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price and interest thereon of this Note shall be paid at maturity or upon earlier redemption to the person in whose name this Note is registered at the maturity or redemption date thereof, upon presentation and surrender of this Note at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). Such amounts shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner 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 a payment to Cede & Co. by electronic transfer to such Owner upon written notice given to the Note 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 Notes 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. futerest not punctually paid will be paid in the manner established in the within defined Note Resolution. Definitions. Capitalized terms used herein and not otherwise defined meanings assigned to such terms in the hereinafter defined Note Resolution. Authorization of Notes. This Note is one of an authorized series of "General Obligation Temporary Notes, Series 2021-1," aggregating the pri · al "Notes") issued for the purposes set forth in the Resolution of the Is authorizin e issuance of the Notes (the "Note Resolution"). The Notes are issued by the autho · fan · 1 full co lyince with the provisions, restrictions and limitations of the Constitution, partic ictl�•,§ 51�e ' f, and laws of the State of Kansas, including KS.A. 10-101 to 10-125, incl e, spe 1 ly inclu)ng K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 '·,, and . 1��104, all as amended and supplemented from time to time, and all other provisions o s of ill e of Kansas applicable �reM. 2 r .pl \ r�, General Obligations. The Notes cons,Ljt'ute g· i; • :· ons,iof the Issuer payable as to both principal and interest from ad valorem taxes.��-. may 1 ,thout limitation as to rate or amount u�on all t�e taxable tangible property, re�}�d pe . , wit ... 'IJ1..u1.',j,territorial limits of the Issuer. The fullfaith, credit and resources of the Issuev.are W�by p for t payment of the principal of and interest on this Note and the issue of which if� a part as the sa . ectively become due. �i Redemption Prior to ,, atu � . The Notes 're not subject to redemption prior to maturity.ii//,� u i ,P Book-Entry Sy. 11m. Tl\l. No ·. -l� g issued by means of a book-entry system with no physical distribution of ,1 rti�ates t be n,�ade except as provided in the Note Resolution. One Note certificate with res te on w the Notes are stated to mature or with respect to each form of Notes, regi m the Securities Depository, is being issued and required to be deposit c ies e ·,,. y and immobilized in its custody. The book-entry system will evid � the Not, 'by the Securities Depository's participants, beneficial ownership of the 11 Denominations being evidenced in the records of such participants. Transfers of , 9 the records of the Securities Depository and its participants pursuant to rules Ii. I , y the Securities Depository and its participants. The Issuer and the Note Regist ',ze fhe Securities Depository nominee, while the Registered Owner of this Note, as the owner of this No,;' for all purposes, including (i) payments of principal of, and redemption premium, if any, and inte . li'bis Note, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium paym ts to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Note 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 Note, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Note shall be made in accordance with existing arrangements among the Issuer, the Note Registrar and the Securities Depository. 2 Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE NOTE RESOLUTION, THIS GLOBAL NOTE 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 SUCCESSORSECURITIES DEPOSITORY. This Note may be transferred or exchanged, as provided in the NoteResolution, only on the Note Register kept for that purpose at the principal office of the Note Registrar,upon surrender of this Note together with a written instrument of transfer or authorization for exchangesatisfactory to the Note Registrar duly executed by the Registered Owner or the Regist ed Owner's dulyauthorized agent, and thereupon a new Note or Notes in any Authorized Denominatioq e same maturityand in the same aggregate principal amount shall be issued to the transferee in exchange th or as providedin the Note Resolution and upon payment of the charges therein prescribed. T Issuer y all costsincurred in connection with the issuance, payment and initial registration ost of areasonable supply of note blanks. The Issuer and the Paying Agent may d, ,n1, and e pe hosename this Note is registered on the Note Register as the absolute owne�6.ttereor for the rpose of receivingpayment of, or on account of, �he pri�cipal or re�emption p�ce her i; ;�d inl. �,�.s� du� ��pn and for allother purposes. The Notes are issued m fully registered form m tilhon ortun 1or/!' Authentication. This Note shall not be valid or beco , v� ·f �ose or be entitledsoluti ,u�til the Certificate ofto any security or benefit under the hereinafter defined Authentication and Registration hereon shall have be lawfully . by t_b'e'Note Registrar. IT IS HEREBY DECLARED A be done and to exist precedent to and inand do exist in due and regular form Kansas, and that the total indebted constitutional or statutory limitation ts nditions, and things required to been properly done and performede Constitution and laws of the State ofis series of notes, does not exceed any CITY OF SALINA, KANSAS By: f'vtM� This General Obligation Temporary Note shall not be negotiable unless and until countersignedbelow following registration by the Treasurer of the State of Kansas. 3 /�/.0��, -�/ / // . ,r .,,,---�( zi t e.:� d6 \·:=:::::::/ l./ / Clerk ------ CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Note is one of a series of General Obligation Temporary Notes, Series 2021-1, of the City ofSalina, Kansas, described in the within-mentioned Note Resolution. Registration Date: April 29, 2021 Office of the State Treasurei;Topeka, Kansas, as Note Registrar andRegistration Number: 0322-085-042921-245The following is a true and correct coBond Counsel, which was dated and issu r1iir ,,. . "'JJI""�··�,.,,.. vj!;t ILMORE ,:P.C. .. ,, Attome� at · w · 5 GrandiBoulevard . 1100 issouri 64108 al opinion of Gilmore & Bell, P.C.,suance and delivery of such Notes: TD Securities New York, New York$5,23 , ~(,ieneral Obligation Temporary Notes, Series 2021-1 of the City of1', • a, � {as, Dated April 29, 2021We �ave acJt a: Bond Counsel to the City of Salina, Kansas (the "Issuer"), in connection with itsissuance of tb.\J1�S e-captioned notes (the "Notes"). In this capacity, we have examined the law and thecertified proceectings, 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 resolutionadopted by the governing body of the Issuer authorizing the issuance and prescribing the details of theNotes.Regarding questions of fact material to our opinion, we have relied on the certified proceedingsand other certifications of public officials and others furnished to us without undertaking to verify them byindependent investigation.4 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1.The Notes have been duly authorized, executed and delivered by the Issuer and are validand legally binding general obligations of the Issuer. 2.The Notes are payable as to both principal and interest from ad valorem taxes which maybe 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 nual tax levy the principal and interest coming due on the Notes to the extent that necessary funds a t provided from other sources. �If, . , " 3.The interest on the Notes (including any onginal issue dis ·· le to anowner thereof) is: (a) excludable from gross income for federal income t��os n tern oftax preference for purposes of the federal alternative minimum tax. Th t�inions set in this paragraphare subject to the condition that the Issuer complies with all require '' s of t8�intema \�fnue Code of 1986, as amended (the "Code") that must be satisfied subsequen .fb t ��f ilit,� Ngfes in order that interest thereon be, or continue to be, excludable from gross i e for 1DCOT1)�1-tax purposes. The Issuer has covenanted to comply with all of these requireme ilure t ·v ww.1P)j4({;ith certain of theserequirements may cause interest on the Notes to be included in gr me foP{&g'ltfal income tax purposes retroactive to the date of issuance of the Notes. Th Notes hav .171 n d@'�.ignated as "qualified tax-exempt obligations" for purposes of Code § 265(b)� , re 1. n regarding other federal tax consequences arising with respect to the Notes. t4.The interest on the Notes i e !p,xation by the State of Kansas . .Ji<J'i /tl We express no opinion re�rding the pleteness or sufficiency of the Official Statement or other offering · · · to the N t to the extent, if any, stated in the Official Statement). Further, we e regardin,f tax consequences arising with respect to the Notes other than as expressly // tfi1111P The right the enforceability thereof may be limited by bankruptcy, insolvency, re her similar laws affecting creditors' rights generally and by equitable pri or in equity. T ate, and we assume no obligation to revise or supplement this opi · . • . · ances that may come to our attention or any changes in law that may occ ion. 5 GILMORE & BELL, P.C. NOTE ASSIGNMENT FOR VALUE RECENED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) ,Jl, ., the Note to which this assignment is affixed in the outstanding principal '.!J.''b,nt of 11�1 , t'iinding in the name of the undersigned on the books of the Note Registr:,Jrf' Th� undersilg!].ed do(es) hereby irrevocably constitute and appoint _________ as ag�,, 1 trans£ aid No1 the books ofsaid Note Registrar with full power of substitution in the premis . ''f/Ji� 111� Dated ________ _ ;{ ,�/ ,!lf Name Signa ··gn here exactly as name(s)o.· he face of Certificate) . · �ture guarantee: By _______________ _ 'l('JIA,1/Jif' Jr CERTIFICATE OF CLERK co ) SS. SAL i ) ,1f 1 ' gned, Clerk of the City of Salina, Kansas, does hereby certify that the within Note has been duly registered in my office according to law as of April 29, 2021. WITNESS my hand and official seal. 6 AGREEMENT BETWEEN ISSUER AND AGENT $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 DATED APRIL 29, 2021 THIS AGREEMENT, dated as of April 29, 2021, 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 abovecaptioned notes (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Note 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, Note Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Note Registrar and Transfer Agent. II.BASIC DUTIES A.Issuer or its duly authorized representative agrees to furnish Agent the narne(s) and address( es) of the initial registered owner( s) of the Securities together with such registeredowners' 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 orderof 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 bepresented for registration, transfer and exchange; and shall also maintain an office in theCity of Topeka, Kansas, where Securities may be presented for payment. Agent shall keepa 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 signedor presented by the proper person. Agent need not investigate any fact or matter stated inthe document. Agent undertakes to perform such duties and only such duties set forth inK.S.A. 10-620 et seq., except as specifically provided in this Agreement. Agent shall notify the owners of the Securities upon default in payment of principal orinterest 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 providedas Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $250.00, 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 note issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the note issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. 10-505 for performing the duties of paying the principal of the Securities. IV.STANDARD OF PERFORMANCE Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securitiesare to be issued in certificated or uncertificated form, or both. A.STATEMENTS OF OWNERSHIP Agent agrees to provide Statements of Ownership to the owner of uncertificated Securities.Such Statements shall be in accordance with the standards set forth by the AttorneyGeneral. 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 alltransactions involving the payment of interest, fractions of a cent equaling or exceedingfive mills shall be regarded as one cent; fractions of a cent less than five mills shall bedisregarded. Agent shall at all times maintain an adequate supply of Statements ofOwnership for any anticipated transfers or exchanges of the Statements. B.CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordancewith 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 multiplesthereof 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 onthe 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; fractionsof a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agentwith 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 expensesfor such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP"number(s), if any, and shall notify Agent of each number(s) prior to the issuance of theapplicable Securities. C.INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1,000 or $5,000 units, or in the case of oneodd denomination, calculate the unit separately. Each intermediate unit calculation is firstdetermined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal2 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. 10-111. E.TRANSFERS AND EXCHANGES 1.When Securities are presented to Agent for transfer or exchange, Agent shall sotransfer or exchange such Securities if the requirements of Section 8-401 ( 1) of theUniform Commercial Code are met. 2.In accordance with the authorizing Resolution of the Issuer (the "NoteResolution"), payments of interest shall be made to the owner of record of eachSecurity 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 recordowner 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 periodbeginning on the day following the fifteenth day of the month preceding anyinterest payment date for such Securities and ending at the close of business on theinterest payment date, or to transfer or exchange any Security selected or called forredemption in whole or in part subsequent to the date notice of such redemption isgiven in accordance with the Note Resolution authorizing the Securities. F.REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers orexchanges shall bear a Date of Registration as of the date that all the requireddocumentation is received at the Agent's official place of business. Issuer will providefunds to make any interest or principal payments in accordance with K.S.A. 10-130 and amendments thereto. Agent is hereby authorized to effect any semiannual payment ofinterest 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 wrongfullytaken, Issuer shall issue and Agent shall authenticate a replacement Security if therequirements 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 Agentand Issuer at the expense of the owner of the Security. Such indemnity bond and affidavitof loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agentfrom any loss which any of them may suffer if the Security is replaced. Issuer may chargethe 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 optionalredemption 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 isno provision for notice to the Security owners, Issuer agrees to give at least thirty (30) dayswritten notice to Agent.Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of suchSecurities to be so redeemed. Agent shall select the Securities to be so redeemed. Agentshall 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 purposeof selecting Securities on a partial redemption. Further, in the event notice is given toAgent for a complete redemption of the Issue according to the terms of the Note Resolution,Agent shall not be required to transfer or exchange any Security beginning on the dayfollowing the 15th day preceding the date set for redemption.I.MISCELLANEOUSAgent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal toone Security for each maturity) for registration and exchange, and shall safeguard any"blank" Securities held for purpose of exchange or transfer.J.REPORTSAgent shall provide Issuer an annual report of the activity with respect to the issuance ofSecurities upon written request of Issuer.K.CONSTRUCTIONThis Agreement shall be construed in accordance with the laws of the State of Kansas andalso the Note Resolution.[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 4 600596.202) 8\SAUNA 2021-1 By: The Depository Trust Company A subsidiary of the Depository Trust & Clearing Corporation BLANKET ISSUER LETTER OF REPRESENTATIONS (To be completed by Issuer and Co-lssuer(s), if applicable) CITY OF SALINA, KANSAS (:\ame ,1ff ssuer and Co-I ssuer(s), if applicable) The Depositm·y Trust Company 1830 I Bermuda Green Drive Tampa, FL 33647 Attention: Underwriting Department Ladies and Gentlemen: 04/14/2021 This letter sets forth our understanding with respect to all issues (the '•Securities") that Issuer shall request to be. made eligible for deposit by The Depository Trost Company ("DTC"). Issuer is: /Note; Issuer shall represent one and cross out th@ other.l ���� [formed under the laws ofj.,__ ____ t_h_e_S_t_a_te_o_f _K_a_ns_a_s ____ _ To induce DTC to accept the Securities as eligible for deposit at D TC, and to act in accordance with DTC's Rules with respect to the Securities, Issuer represents to OTC that issuer will comply with the requirements stated in DTC's Operational Arrangements, as they may be amended from time to time. Note: Schedule A contains statements that DTC believes accurately describe DTC, the method of effecting book-entry transfers of securities distributed through DTC, and ce1tain related matters. Address) Very t111l y yours, City of Salina, Kansas (Print Nmne) 300 West Ash --------------·-··-1.Stre<:l Address) 1Ci1yJ Salina, Kansas , USA 67402 (S1aie) 1Coumry) (785)309-5735 (ZipCnJc) . ------·-----•-- -·· -·-----(Ph,me Numbi..•rJ jovonna.rutherford@salina.org ••·--· --·-�---· ----·--··,[-mail BLOR 06-2013 SCHEDULE A (To Blanket Jssuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC--bracketed material may be npplicable only to certain issues) 1.The Depository Trust Company (''DTC"), New York, NY, will act as securities depository for thesecurities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue ot] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2.DTC, the world's largest securities depository, is a limited-purpose trust company organized underthe New York Banking Law, a "ban king organization" within the meaning oft he New York Banking Law, a member oft he Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "cl earing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over I 00 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both 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. OTCC 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 tile with the Securities and Exchange Commission. More information about DTC can be found at mnv,dtcc,com. 3.Purchases of Securities under the DTC system must be made by or through Direct Participants,which will receive a credit for the Securities on DTC 's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4.To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC areregistered in the name ofDTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. 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. BLOR 06-2013 SCHEDULE A (To Blanket Issuer Letter of Representations) 5.Conveyance of notices and other communications by DTC to Direct Participants, by DirectParticipants 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. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities m ay wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies ofnotices be provided directly to them.] [6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] 7.Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect toSecurities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. 's consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8.Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DT C'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, Agent, or 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 Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. [9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Ten der/Remarketing] 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 [Tender/Remarketing] Agent. The requirement for physical delivery of 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 [Tender/Remarketing] Agent's DTC account.] 10.DTC may discontinue providing its services as depository with respect to the Securities at any timeby giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11.Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC ( or asuccessor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12.The information in this section concerning DTC and DTC's book-entry system has been obtainedfrom sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. BLOR 06-2013 April 16, 2021 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 5, 2021, Moody's Investors Service reviewed and assigned a rating of MIG 1 to Salina (City Of) KS, General Obligation Temporary Notes, Series 2021-1. 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 or 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, 2021 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 FEEDBACKOR 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 capacityas such with a need to know that have entered into non-disclosure agreements with Moody's in the form providedby 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 Nathan Phelps at 214-979- 6853. Sincerely, � 'it "J,we4t4Jw, Sf/Wlu 1� Moody's Investors Service Inc CLOSING CERTIFICATE $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 DATED APRIL 29, 2021 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 notes (the "Notes"); and certify as of April 29, 2021 (the "Issue Date"), as follows: 1.Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unlessotherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Note Resolution (defined below) authorizing the Notes. 2.Transcript of Proceedings. The transcript of proceedings relating to the authorization andissuance of the Notes (the "Transcript"), furnished to the Purchaser of the Notes, 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 12, 2021 are true and correct as of this date and are incorporated in this Certificate by reference. 3.The Note Resolution. The Issuer is issuing and delivering the Notes simultaneously with thedeli very of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, 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. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2104, and Article 12, Section 5 of the Constitution of theState of Kansas, all as amended and supplemented from time to time, and Resolution No. 21-7946 of theIssuer duly adopted by the governing body of the Issuer on April 12, 2021 (the "Note Resolution"). 4.Purpose of the Notes. The Notes are being issued pursuant to the Note Resolution for thepurpose of paying a portion of the costs of certain public improvements (the "Improvements"). 5.Security for the Notes. The Notes are general obligations of the Issuer, payable as to bothprincipal 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 pledged under the Note Resolution to the payment of the principal of and interest on the Notes. 6.Sale of Notes. The Notes have been sold at rates not in excess of the limitations set forth inK.S.A. 10-1009. The Notice of Sale dated March 15, 2021, 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 Notes, and to all other persons and firms requesting copies of sch Notice of Sale and Preliminary Official Statement. 7.Official Statement. The Official Statement contained in the Transcript constitutes a full, trueand correct copy of the Official Statement relating to the Notes. 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 Note Resolution, has covenanted todisseminate 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 ourknowledge, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Notes shown to be authorized in the Transcript; (e) the validity of the Notes, 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 Notes;or (g) the federal or state tax-exempt status of the interest on the Notes; wherein any unfavorable decision,ruling or finding would adversely affect the Issuer, the transactions contemplated by the Note Resolution,or the Official Statement, or the validity or enforceability of the Notes, which are not disclosed in the finalOfficial Statement.[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 Siimature Official Title City Clerk 600.'i96.20218\SALINA 2021-1 (Signature Page to Oosing Certificate) Section 1.1. Section 2.1. Section 2.2. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8. Section 3.9. Section 3.10. Section 3 .11. Section 3.12. Section 3.13. Section 3.14. FEDERAL TAX CERTIFICATE TABLE OF CONTENTS Page PARTIES AND RECITALS ............................................................................................. 1 ARTICLE I DEFINITIONS Definitions of Words and Terms ....................................................................................... 1 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer .................................................................... 6 Survival of Representations and Covenants ...................................................................... 9 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS General .............................................................................................................................. 9 Reasonable Expectations .................................................................................................. 9 Purposes of the Financing ................................................................................................. 9 Funds and Accounts .......................................................................................................... 9 Amount and Use of Note Proceeds ................................................................................. 10 Multipurpose Issue .......................................................................................................... 10 No Refunding .................................................................................................................. 10 Project Completion ......................................................................................................... 10 Sinking Funds ................................................................................................................. 10 Reserve, Replacement and Pledged Funds ..................................................................... 10 Purpose Investment Yield ............................................................................................... 11 Issue Price and Yield on Notes ....................................................................................... 11 Miscellaneous Arbitrage Matters .................................................................................... 11 Conclusion ...................................................................................................................... 11 ARTICLE IV POST-ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. General ............................................................................................................................ 11 Record Keeping, Use of Nate Proceeds and Use of Financed Facility ........................... 12 Temporary Periods/Yield Restriction ............................................................................. 13 Fair Market Value ........................................................................................................... 13 Certain Gross Proceeds Exempt from the Rebate Requirement ..................................... 15 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts ...................................................................................................................... 17 Successor Rebate Analyst ............................................................................................... 18 Filing Requirements ........................................................................................................ 18 (i) Section 4.9. Section 5 .1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Section 5.6. Section 5.7. Section 5.8. Section 5.9. Section 5.10. Survival after Defeasance ............................................................................................... 18 ARTICLE V MISCELLANEOUS PROVISIONS Term of Tax Certificate .................................................................................................. 18 Amendments ................................................................................................................... 18 Opinion of Bond Counsel ............................................................................................... 19 Reliance .......................................................................................................................... 19 Severability ..................................................................................................................... 19 Benefit of Agreement. ..................................................................................................... 19 Default, Breach and Enforcement ................................................................................... 19 Execution in Counterparts ............................................................................................... 19 Governing Law ............................................................................................................... 19 Electronic Transactions ................................................................................................... 19 Signatures ....................................................................................................................... S-1 Exhibit A -Debt Service Schedule and Proof of Note Yield Exhibit B-IRS Form 8038-G Exhibit C-1-Purchaser's Receipt and Issue Price Certificate Exhibit C-2 -Municipal Advisor's Certificate Regarding the Competitive Sale Exhibit D -Description of Property Comprising the Financed Facility Exhibit E -Sample Annual Compliance Checklist *** (ii) FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate"), is executed as of April 29, 2021, 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 $5,230,000 principal amount of General Obligation Temporary Notes, Series 2021-1 (the "Notes"), under Resolution No. 21-7946 adopted by the governing body of the Issuer, for the purposes described in this Tax Certificate and in the 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 Note proceeds and of certain other money relating to the Notes and set forth the conditions under which the interest on the Notes 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 Note proceeds and the property financed or refinanced with those proceeds and the investment of the Note proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Notes 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 has adopted a Tax Compliance Procedure (as defined below) for the purpose ofsetting 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. 5.This Tax Certificate is entered into as required by the Tax Compliance Procedure to set outspecific tax compliance procedures applicable to the Notes. NOW, THEREFORE, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.1. 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 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 Notes, 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 project or improvement comprising the Financed Facility 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 4.2 and substantially in the form attached as Exhibit E. "Available Construction Proceeds" means the sale proceeds of the Notes, increased by (a) Investment earnings on the sale proceeds, (b) earnings on amounts in a reasonably required reserve or replacement fund allocable to the Notes but not funded from the Notes, 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 Notes. 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 Facility is substantially completed. "Bona Fide Debt Service Fund" means a fund, which may include Note proceeds, that (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Note Year; and (b) is depleted at least once each Note Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Note Year, or (2) onetwelfth of the principal and interest payments on the Notes for the immediately preceding Note Year. "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 other firm of nationally recognized bond counsel acceptable to the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means May 1, 2022, the final maturity date of the Notes, but the Issuer reserves the right to select a different date consistent with the Regulations. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.2(b) of this Tax Certificate. "Financed Facility" means the portion of the Project being financed or refinanced with the proceeds of the Notes as described in the Resolution, all as described on Exhibit D. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Notes, 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 or other Investment proceeds), (c) any amounts held in a sinking fund for the Notes, (d) any amounts held in a pledged fund or reserve fund for the Notes, and (e) any other replacement proceeds. (1)Improvement Fund.(2)Debt Service Account.(3)Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of the Notes). 2 "Note Year'' means each one-year period (or shorter period for the first Note Year) ending May 1, or another one-year period selected by the Issuer. "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 Facility with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Facility 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 Notes from gross income for federal income tax purposes. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Notes, the use of the Financed Facility and the investment of Gross Proceeds after the Issue Date of the Notes. ''Project" means all of the property being acquired, developed, constructed, renovated, and equipped by the Issuer using Note proceeds and Qualified Equity, all as described on Exhibit D. "Purchaser'' means TD Securities, New York, New York, the original purchaser of the Notes, 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 Project at any time during the period beginning not earlier than the later of (a) 60 days prior to the Official Intent Date or (b) three years prior to the Issue Date, and ending not later than the date the Project 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 theFinanced Facility on a short-term basis as 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 ofthe Financed Facility for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Facility 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 Facility 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 ofthe Financed Facility 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 Facility 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- 4 Qualified User using all or any portion of the Financed Facility 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 ofthe Financed Facility 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 Facility was not constructed for a principal purpose of providing the property for use by that person. "Qualified User'' means a State, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States. "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 Notes 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. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code§§ 103 and 141 through 150 and applicable to the Notes. "Resolution" means the Resolution as originally executed by the Issuer as amended and supplemented in accordance with the provisions of the Resolution. "Series 2021-A Bonds" means the Issuer's General Obligation Internal Improvement Bonds, Series 2021-A, dated as of the Issue Date. "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 Notes, 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 Notes. "Yield" means yield on the Notes, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations§ 1.148-5. 5 Section 2.1. covenants as follows: ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer. The Issuer represents and (a)Organization and Authority. The Issuer (1) is a political subdivision organized and existingunder the laws of the State of Kansas, and (2) has lawful power and authority to issue the Notes for the purposes set forth in the Resolution, to enter into, execute and deliver the Resolution, the Notes, 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 Resolution, the Notes, andthis Tax Certificate, acting by and through its duly authorized officials.(b)TaJC-Exempt Status of Notes-General Covenant and Allocation of Proceeds to Project.(1)The Issuer (to the extent within its power or direction) will not use any money ondeposit in any fund or account maintained in connection with the Notes, whether or not such money was derived from the proceeds of the sale of the Notes or from any other source, in a manner that would cause the Notes 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 Note 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 Notes to be included in gross income for federal income tax purposes. (2)The Issuer will account for the expenditure of the Note proceeds and QualifiedEquity for the Project as described in Section 4.2. For purposes of the following covenants related to the use of the Financed Facility, any Non-Qualified Use shall be treated as first allocated entirely to the portion of the Project financed with Qualified Equity, and then only to the extent of any excess, to the portion of the Project financed with Bond proceeds (that is, the Financed Facility). (c)Governmental Obligations-Use of Proceeds. Throughout the Measurement Period all ofthe Financed Facility is expected to be owned by the Issuer or another Qualified User. Throughout the Measurement Period no portion of the Financed Facility is expected to be used in a Non-Qualified Use. Throughout the Measurement Period the Issuer will not permit any Non-Qualified Use of the Financed Facility without first consulting with Bond Counsel. (d)Governmental Obligations-Private Security or Payment. As of the Issue Date, the Issuerexpects none of the principal of and interest on the Notes will be (under the terms of the Notes or any underlying arrangement) directly or indirectly: (1)secured by (i) an interest in property used or to be used for a Non-Qualified Use,or (ii) an interest in payments in respect of such property; or (2)derived from payments (whether or not such payments are made to the Issuer) inrespect 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 private security or payment with respect to the Notes without first consulting with Bond Counsel. 6 ( e)No Private Loan. Not more than 5% of the net proceeds of the Notes will be loaned directlyor indirectly to any Non-Qualified User. (f)Management or Service Agreements. As of the Issue Date the Issuer has not entered intoany 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 ofthe Financed Facility. 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)Qualified Improvements. A portion of the Note proceeds will be used to financeimprovements to the Issuer's facility known as the Tony's Pizza Event's Center. Such facility is owned by the Issuer, and all such improvements thereto financed in whole or in part by the Notes will be owned by the Issuer. A portion of the Tony's Pizza Event's Center may otherwise be used in a Non-Qualified Use, but any improvements to be financed in whole or in part by the Notes constitute "qualified improvements" under Regulations§ 1.141-3(d)(6) that do not give rise to Non-Qualified Use of the Notes or the Financed Facility, because the Tony's Pizza Event's Center was placed in service more than one year before the acquisition or construction of the improvements thereto, the improvements will not be an enlargement of the Tony's Pizza Event's Center or an improvement of interior space occupied exclusively for any NonQualified Use, no portion of the Tony's Pizza Event's Center or any payments in respect thereof constitute private security under Code§ 14l(b)(2)(A), and no more than 15% of the Tony's Pizza Event's Center is used for a Non-Qualified Use. Therefore, the Issuer does not expect any Non-Qualified Use of the Notes or the Financed Facility attributable to these "qualified improvements." (i)Limit on Maturity of Notes. A list of the assets included in the Project and a computationof the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Notes as computed by Bond Counsel, does not exceed the average reasonably expected economic life of the Financed Facility. (i) Expenditure of Note proceeds. (1)Accounting for Expenditures. The Issuer will evidence each allocation of theproceeds of the Notes and Qualified Equity for the Project 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 Facility was placed in service. (2)Reimbursement of Expenditures: Official Intent. On each Official Intent Date, thegoverning body of the Issuer adopted a resolution declaring the intent of the Issuer to finance the Financed Facility with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Facility prior to the issuance of those obligations. Copies of these resolutions are included in Tabs 1 to 3 of the Transcript. The Issuer does expect to reimburse itself from Note proceeds for expenditures paid by the Issuer prior to the Issue Date, but reserves the ability to do so in the future, provided that, except as otherwise permitted under Regulations § 1.150-2(f) (for example, issuance costs, de minimis amounts, and preliminary expenditures), (A) no portion of the Net Proceeds of the Notes will be used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the respective resolution was adopted, (B) no reimbursement allocation 7 will be made more than 18 months following the later of (i) the date of the expenditure or (ii) the date the Financed Facility was placed in service, or (C) no reimbursement allocation will be made more than 3 years following the date of the expenditure. (k)Registered Notes. The Resolution requires that all of the Notes will be issued and held inregistered form within the meaning of Code§ 149(a). (1)Notes Not Federally Guaranteed. The Issuer will not take any action or permit any actionto be taken which would cause any Note to be "federally guaranteed" within the meaning of Code§ 149(b ). (m)IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return forTax-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 "as-filed" copy along with proof of filing will be included as ExhibitB. (n)Hedge Bonds. At least 85% of the Net Proceeds of the Notes will be used to carry out thegovernmental purpose of the Notes within 3 years after the Issue Date, and not more than 50% of the proceeds of the Notes will be invested in Investments having a substantially guaranteed Yield for four years or more. ( o)Compliance with Future Tax Requirements. The Issuer understands that the Code and theRegulations may impose new or different restrictions and requirements on the Issuer in the future. The Issuer will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Notes from gross income for federal income tax purposes. (p)Single Issue; No Other Issues. The Notes constitute a single "issue" under Regulations§1.150-l(c). No other debt obligations of the Issuer: (1) are being sold within 15 days of the sale of theNotes, (2) are being sold under the same plan of financing as the Notes, and (3) are expected to be paidfrom substantially the same source of funds as the Notes (disregarding guarantees from unrelated parties,such as bond insurance). For purposes of the foregoing, simultaneously with the Notes, the Issuer sold itsSeries 2021-ABonds. The Series 2021-ABonds are not part of the same plan of financing as the Notes andare not expected to be paid from substantially the same sources of funds as the Notes. Therefore, the Series2021-A Bonds are not part of the same "issue" as the Notes under Regulations§ 1.150-l(c). A separateFederal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance of theSeries 2021-A Bonds.(q)Interest Rate Swap. As of the Issue Date the Issuer has not entered into an interest rateswap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Notes. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. (r)Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enterinto a Guaranteed Investment Contract for any Gross Proceeds of the Notes. The Issuer will be responsible for complying with Section 4.4(d) if it decides to enter into a Guaranteed Investment Contract at a later date. 8 (s)Bank Qualified Tax-Exempt Obligations. The Notes are not "qualified tax-exempt obligations" under Code§ 265(b)(3). (t)General Allocation and Accounting. The portion of the Project to be financed by the Notesis expected to also be financed with other funds of the Issuer. The portion of the Project to be financed with proceeds of the Notes is referred to as the Financed Facility. Attached as Exhibit Dis a schedule showing the Project financed with proceeds of the Notes and other funds of the Issuer. For purposes of determining Non-Qualified Use, if any, of the Financed Facility during the Measurement Period, the Issuer will allocate Non-Qualified Use first to the portion of the applicable Project financed with other funds of the Issuer and second to the Financed Facility. During the Measurement Period, the Issuer will, on an annual basis, determine the extent to which Non-Qualified Use exceeds the portion of the applicable Project financed with other funds of the Issuer and determine the extent to which the proceeds of the Notes and the Financed Facility are used in a Non-Qualified Use. Section 2.2. 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 Notes, 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 Notes. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.1. 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 Note proceeds and other money, in order to support the Issuer's conclusion that the Notes 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 Notes. Section 3.2. 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 3.3. Purposes of the Financing. The Notes are being issued for the purpose of providing funds to (a) finance a portion of the costs of the Project and (b) pay costs of Issuance. Section 3.4. under the Resolution: Funds and Accounts. The following funds and accounts have been established (a)Improvement Fund;(b)Debt Service Account; and(c)Rebate Fund.9 Section 3.5. Amount and Use of Note Proceeds. (a)Amount of Note Proceeds. The total proceeds to be received by the Issuer from the sale of the Notes will be as follows: Principal Amount Plus Original Issue Premium Less Underwriting Discount Total Proceeds Received by Issuer $5,230,000.00 95,499.80 (3,451.00) $5,322,048.00 (b)Use of Note Proceeds. The Note proceeds 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 Notes. (2)The sum of $35,255.00 of Note proceeds will be used to pay the costs of issuance of the Notes. (3)The balance of $5,286,793.00 of Note proceeds, plus investment earnings thereon, will be used to pay costs of the Financed Facility. Section 3.6. Multipurpose Issue. The Issuer is applying the arbitrage rules to separate financing purposes of the issue as if they constitute separate issues pursuant to Regulations § 1.148-9(h)(2). Under Regulations§ 1.148-9(h), each separate capital project (i.e., capital projects that are not integrated or functionally related) financed or refinanced with proceeds of the Notes will be treated as a separate issue for purposes of applying certain of the arbitrage restrictions under Code § 148. Section 3.7. No Refunding. No proceeds of the Notes will be used to pay principal of or interest on any other debt obligation. Section 3.8. Project Completion. The Issuer has incurred, or will incur within 6 months after the Issue Date, a substantial binding obligation to a third party to spend at least 5% of the Net Proceeds of the Notes on the Financed Facility. The completion of the Financed Facility and the allocation of the Net Proceeds of the Notes to expenditures will proceed with due diligence. At least 85% of the Net Proceeds of the Notes will be allocated to expenditures on the Financed Facility within 3 years after the Issue Date. Section 3.9. Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Notes. 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 Notes 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 Notes within each Note 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 or replacement fund has been established for the Notes. 10 (b)No Replacement or Pledged Funds. None of the Note proceeds will be used as a substitutefor other funds that were intended or earmarked to pay costs of the Financed Facility, 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 Notes if the Issuer encounters financial difficulty. Section 3.11. Purpose Investment Yield. The proceeds of the Notes 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 Notes� (a)Issue Price. Based on the Purchaser's certifications in the Purchaser's Receipt for Notesand Issue Price Certificate in Exhibit C-1 and the Municipal Advisor's certifications in the Municipal Advisor's Certificate Regarding the Competitive Sale in Exhibit C-2, the Issuer hereby elects to establish the issue prices of the Notes pursuant to Regulations § 1.148-l(f)(2)(iii) (relating to the so-called "competitive sale rule"). Therefore, the aggregate issue price of the Notes for such purpose is $5,325,499.80. (b)Note Yield. Based on the issue price, the Yield on the Notes is 0.180705%, as computed by Bond Counsel as shown on Exhibit A. Section 3.13. Miscellaneous Arbitrage Matters. (a)No Abusive Arbitrage Device. The Notes 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 Notes, together with expected Investmentearnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Notes as described above. Section 3.14. Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Certificate, the Issuer does not expect that the Note proceeds will be used in a manner that would cause any Note to be an "arbitrage bond" within the meaning of Code§ 148 and the Regulations. ARTICLE IV POST-ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section 4.1. 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 Notes are issued. The Issuer recognizes that interest on the Notes 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 Notes to be refinanced with tax-exempt 11 obligations and substantiate the position that interest on the Notes is exempt from gross income in the event of an audit of the Notes 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 Notes and to supplement any other formal policies and procedures related to tax compliance 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 its Post-Issuance TaxRequirements 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 Notes 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 Notes, and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Resolution or State law. Section 4.2. Record Keeping; Use of Note Proceeds and Use of Financed Facility. (a)Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File for the Notes 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 Notes or (2) any obligation issued to refund the Notes. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (i) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (ii) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (iii) exhibit a high degree of legibility and readability both electronically and in hardcopy, (iv) provide support for other books and records of the Issuer and (v) 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 Note Proceeds and Qualified Equity to Expenditures. TheBond Compliance Officer will account for the investment and expenditure of Note proceeds in the level of detail required by the Tax Compliance Procedure. The expected allocation of the proceeds of the Notes and Qualified Equity to expenditures for the Financed Facility is set forth on Exhibit D. Upon completion of the Financed Facility and in connection with any long-term financing for the Financed Facility, the Bond Compliance Officer will supplement this expected allocation with a Final Written Allocation, as required by the Tax Compliance Procedure. ( c)Annual Compliance Checklist. After completion of the Financed Facility and in connectionwith any long-term financing for the Financed Facility, the Bond Compliance Officer will prepare and complete an Annual Compliance Checklist at least annually, in accordance with the Tax Compliance Procedure. Attached as Exhibit E is a sample Annual Compliance Checklist for the Notes. ( d)Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining anddelivering to the Issuer any advice or Opinion of Bond Counsel required under the provisions of this Tax 12 Certificate, including any advice or Opinion of Bond Counsel required by this Tax Certificate or the Annual Compliance Checklist. Section 4.3. Temporary Periods/Yield Restriction. Except as described below, the Issuer will not invest Gross Proceeds at a Yield greater than the Yield on the Notes: (a)Improvement Fund. Note proceeds deposited in the Improvement Fund and Investment earnings on those proceeds may be invested without Yield restriction for up to 3 years following the Issue Date. If any unspent proceeds remain in such fund after 3 years, those amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations § 1.148-5( c ). These payments are required whether or not the Notes are exempt from the arbitrage rebate requirements of Code § 148. (b)Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona FideDebt 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. (c)Rebate Fund. Money, other than sale proceeds or Investment proceeds of the Notes, on deposit in the Rebate Fund may be invested without Yield restriction. (d)Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. Section 4.4. 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-restricteddefeasance 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 1 of the paragraphs below. The fair market value of Investments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations §1.148-5. (c)Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. 13 (d)Guaranteed Investment Contracts. The purchase price of a Guaranteed InvestmentContract 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 theGuaranteed Investment Contract, using the following procedures: (i)The bid specifications are in writing and are timely forwarded to potentialproviders, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (ii)The bid specifications include all "material" terms of the bid. A term ismaterial 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 providersthat 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 note 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 termis commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (v)The terms of the solicitation take into account the Issuer's reasonablyexpected deposit and draw-down schedule for the amounts to be invested. (vi)All potential providers have an equal opportunity to bid. If the biddingprocess 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 3 "reasonably competitive providers" are solicited for bids. Areasonably 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 3 bids are received from providers that were solicited as describedabove 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 materialfinancial interest in the issue until 15 days after the Issue Date of the issue, (B) any entityacting as a financial advisor with respect to the purchase of the Guaranteed InvestmentContract at the time the bid specifications are forwarded to potential providers has a14 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 1 of the 3 bids received is from a reasonably competitive provider,as defined above. (iii)If an agent or broker is used to conduct the bidding process, the agent orbroker did not bid to provide the Guaranteed Investment Contract. (3)Winning Bid. The winning bid is the highest yielding bona fide bid (determinednet of any broker's fees). (4)Fees Paid. The obligor on the Guaranteed Investment Contract certifies theadministrative 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 Note documents until3 years after the last outstanding Note is redeemed: (i)A copy of the Guaranteed Investment Contract.(ii)The receipt or other record of the amount actually paid for the GuaranteedInvestment 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. (iii)For each bid that is submitted, the name of the person and entity submittingthe bid, the time and date of the bid, and the bid results. (iv)The bid solicitation form and, if the terms of Guaranteed InvestmentContract 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 beestablished through a competitive bidding process, as follows: (1)at least 3 bids on the Investment must be received from persons with no financialinterest in the Notes (e.g., as underwriters or brokers); and (2)the Yield on the Investment must be equal to or greater than the Yield offered underthe highest bid. Section 4.5. Certain Gross Proceeds Exempt from the Rebate Requirement. (a)General. A portion of the Gross Proceeds of the Notes may be exempt from rebate pursuantto one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Notes and will not otherwise affect the application of the Investment limitations described in Section 4.3. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4.6 applies even if a portion of the Gross Proceeds of the Notes is exempt from the rebate 15 requirement. To the extent all or a portion of the Notes is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.6. The Issuer may defer the final rebate Computation Date and the payment of rebate for the Notes to the extent permitted by Regulations§§ l.148-7(b)(l) and l.148-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b)Applicable Spending Exceptions. (1)The Issuer expect that at least 75% of the Available Construction Proceeds will beused for construction or rehabilitation expenditures for property owned by the Issuer. (2)The following optional rebate spending exceptions can apply to the Notes: (i) §l.148-7(c)).(ii) (iii) 7(e)). 6-month spending exception (Code § 148(f)(4)(B) and Regulations 18-month spending exception (Regulations§ l.148-7(d)).2-year spending exception (Code§ 148(f)(4)(C) and Regulations§ 1.148- ( 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 fund cannot be taken into account in computing arbitrage rebate and yield reduction amounts (1) with respect to such portion that meets the 6-month, 18- month or 2-year spending exception, or (2) for a given Note Year, if the gross earnings on the Debt Service Account for such Note Year are less than $100,000. If the average annual debt service on the Notes does not exceed $2,500,000, the $100,000 earnings test may be treated as satisfied in every Note Year. ( e)Documenting Application of Spending Exception. At any time prior to the firstComputation 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 4.6hereof. (f)General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met. (1)Using Adjusted Gross Proceeds or Available Construction Proceeds to pay principal of any Notes is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2)The 6-month spending exception generally is met if all Adjusted Gross Proceeds of the of the Notes, are spent within 6 months following the Issue Date. The test may still be satisfied even if up to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within 1 year of the Issue Date. (3)The 18-month spending exception generally is met if all Adjusted Gross Proceeds of the Notes are spent in accordance with the following schedule: 16 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 ConstructionProceeds 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, thefailure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to complete the Financed Facility and the failure does not exceed the lesser of 3% of the aggregate issue price of the Notes 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, theNotes 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. Section 4.6. 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 willadminister 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 Notes 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 Note Year and not later than 10 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 Notes, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and ( 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 17 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. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is less than the arbitrage rebate and yield reduction amounts due, the Issuer will, within 55 days after such Computation Date, pay the amount of the deficiency for deposit into the Rebate Fund. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is greater than the Rebate Amount the Issuer will transfer such surplus in the Rebate Fund to the Debt Service Fund. After the final Computation Date or at any other time if the Rebate Analyst has advised the Issuer, any money left in the Rebate Fund will be paid to the Issuer and may be used for any purpose not prohibited by law. (c)Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to theUnited 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 Section 4.7. 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. Section 4.8. 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. Section 4.9. Survival after Defeasance. Notwithstanding anything in the 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 Notes. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.1. Tenn of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Notes and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Notes have been fully paid and all such Notes 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 4.2 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.2. Amendments. This Tax Certificate may be amended from time to time by the parties to this Tax Certificate without notice to or the consent of any of the Noteowners, but only if such 18 THE UNDERSIGNED, Mayor, Director of Finance and Clerk 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:�� By: _612-----------"-'�--""--12--=-=----�--Director of Finance (Signature Page to Federal Tax Certificate-2021-1 Notes) EXHIBIT A DEBT SERVICE SCHEDULE AND PROOF OF NOTE YIELD A-1 This information is provided based on the factual information and ossumptions pro·vided to Gilmore & Bell_, P .C. by a party to a representative of a parry to the proposed transaction. TI1is infonnation is intended to provide factual info11nation only and is provided in conjunction '\\-ith our legal representation. It is not intended as financial advice or " financial recommendation to any party. Gilmore & Bell� P.C. is not a financial ad'"·isor or a ·•municipal advisor�' as defined in the Securities Exchanp;e Act of 1934, as amended. This info1mation is provided based on the facrual infmmation and assumptions prmt'ided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction. This information is. intended to provide factual information only and is provided in conjunction '\\tith our legal representation. It is not inrended as financial ad,•ice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "'municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Apr 12, 2021 3:00 pm Prepared by Gilmore & Bell, P.C. (Finance 8.600 Salina, KS:SALINA-2021_11N) Page 3 BOND PRICING City of Salina, Kansas General Obligation Temporary Notes Series 2021-1 Bond Component Maturity Date Term Bond: 05/01/2022 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Amount Rate Yield Price 5,230,000 2.000% 0.182% 101.826 5,230,000 04/29/2021 04/29/2021 05/01/2022 5,230,000.00 95,499.80 5,325,499.80 101.826000% -3,451.80 -0.066000% 5,322,048.00 101.760000% 5,322,048.00 This information is provided based on the factual info1mation and assumptions provided to Gilmore & Bell, P.C. by a parry to or a representative of a 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 finaucial recommendation to any party. Gilmore & Bell� P.C. is not a financial advisor or a ·•municipal advisor�• as defined in the Securities Exchange Act of 1934, as amended. Apr 12, 2021 3:00 pm Prepared by Gilmore & Bell, P.C. (Finance 8.600 Salina, KS:SALINA-2021_11N) Page 4 BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Temporary Notes Series 2021-1 Dated Date Delivery Date First Coupon 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 Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Bond Component Par Value Term Bond Par Value +Accrued Interest+Premium (Discount)-Underwriter's Discount-Cost oflssuance Expense-Other AmountsTarget Value Target Date Yield 5,230,000.00 5,230,000.00 TIC 5,230,000.00 95,499.80 -3,451.805,322,048.00 04/29/2021 0.245253% 04/29/2021 04/29/2021 05/01/2022 05/01/2022 0.180705% 0.245253% 0.249724% 0.908123% 2.000000% 1.006 1.006 1.006 5,230,000.00 5,325,499.80 105,181.11 13,133.11 5,335,181.11 5,335,181.11 5,305,704.97 Price 101.826 0.660000 0.660000 101.760000 Average Coupon 2.000% All-In TIC 5,230,000.00 95,499.80 -3,451.80-35,255.005,286,793.00 04/29/2021 0.908123% Average Life 1.006 1.006 Arbitrage Yield 5,230,000.00 95,499.80 5,325,499.80 04/29/2021 0.180705% Tilis information 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 intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial ad,•ice or a financial recommendation to any party. Gilmore & Bell, P.C'. is not a financial advisor or a ·•iuunicipaJ advisor"' as defined in the Secu1·ities Exchanjil;e Act of 1934, as amended. This information is provided based on the facnrnl information and asswnptions provided to Gilmore & Bell_. P.C. by a party to a l'epresentative of a party to the proposed transaction. This infonnation is intended to provide facrual infonnation only and is provided in conjunction with our legal representation. It is not inrended as financial advice or a fiwmc.ial .recommendation to any party. Gilmore & Bell, P.C:. is not a financial advisor or a ·•municipal advisorH as defined in the Securities Exchange Act of 1934, as amended. TI1is information is provided based on the factu.il info1mation and asswnptiou.s provided to Gilmore &: Bell. P .C. by a party to or a l"epresentative of a party to the proposed t.rnnsactioo. This infonnation is intended to pro\ide factual info1uiation only and is provided in conjunction with our legal representation. It is not intended as financial ad\•ice or a financial recommendation to BDY party. Gilmore & Bell� P.C. is not a financial advisor or a .. municipal advisor·• as defined in the Securities Exchange Act of 1934, as amended. Form 8038-G lnfonnatlon Retum for Tax-Exempt Governmental Bonds ► Under Internal RIVIIIUI Cod• Hc:tlon 1"91•J (Rev. September 2018) ► SN eeparata lnwuotlona. 0MB No. 1545-0720 Dllpm1m,,nt o, the T..au,y Caution: If the mus pnce ls Ufldr $100,000. use Form 8038-GC. lnkmal RIMIIIUII SeMce ► Go to wwwJre.p/Fll03BG for lllltluotlon• and th• latnl lnfDrmatlon. "" � Reporting Authori If Amended Retum check here ► D. 1 Issuer's neme 2 l■auet'■ eml)IO)ler klenllflcatlon number (EIN) Citv of Salina. Kansas 48-6017288 3a Name ol penon (other lhan fuuan With whom lhe IRS may communicate about Ihle ,111um 1-1natruc1lon1) 3b Telephone numbet GI olhel peraon ahown on :i. Milch L. Waller'. GIimore & Bell, P.C., Bond Counsel 316-267-2091• Number Md 8111181 (or P.O. bclll If mllU fl not dellllenld lo ll1rNt ■ddllll!lS) IRooN;He Ii Report number (Fo, IRS IJM Only) One Main Place. 100 Nonh Main • CIIV, lovffl, or post offtce, 1late, and ZIP codeWichita. KS &72028 Nome ol lss4le General Obligalion Tempor■r'4 Notes Sel1es 2021-1 T Daleol lllllue 04/29/2021 9 CUSIP number 794744 DU3 I :, I 1 Ga Nome and title ol OffiCe, er other employee of the l&suer whom the IRS may call for more lnfonnalion (Bet! 10b Telephone mmber of olllcar or otherln11trucllons) employee shown on ,oa Debbie Pack Director of Finance and Administnition ■:.F.Tiillll Tvoe of Issue (enter the issue price). See the instructions and attach schedule. 11 12 13 14 15 18 17 18 19a b 20 Education. . . . . . Health and hospital . .Transportation . . . Public safety . . Environment Qncluding sewage bonds) . Housing Utilities . . . Other. Describe► Various Public Improvements (par11s & rec, bridges, sanitation)If bonds are TANs or RANs, check only box 19a . . ► If bonds are BANs. check only box 19b . . .. ► If bonds are in the form of a lease or installment sale, check box ► D 0 D l!.l:Tii■ II Description of Bonds. Complete for the entire issue for which this form is being filed. tal Anal maturity date (b) l&sue price (c) Slated redemption price at maturity (d) Walghled average maturity 785-309-5735 11 12 13 14 15 18 17 18 5.325,500 fel Yield I 21 05/01/2022 $ 5.325,500 $ 5,230.000 1.006 years 0.1807 lml� Uses of Proceeds of Bond Issue (Including underwriters' discount) 22 Proceeds used for accrued intemst . . 22 23 Issue price of entire Issue (enter amount from line 21, column (b)) . 23 5,325.500 24 Proceeds used for bond issuance costs Qncluding underwriters' discount) 24 38,701 25 Proceeds used for credit enhancement . . 25 28 Proceeds allocated to reasonably required reserve or replacement fund 28 :n Proceeds used to refund prior ta,c-exempt bonds. Complete Part V • 27 I 28 Proceeds used to refund prior taxable bonds. Complete Part V 28 29 Total (add lines 24 through 28) . . 29 38,107 30 Nonrefundlng proceeds of the Issue (subtract line 29 from line 23 and enter amount here) 30 5,286,793 ■=r-•-··· Description of Refunded Bonds. Complete this part onl� for refunding bonds. I % 31 Enter the remaining weighted average matunty of the tax-exempt bonds to be refunded • 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . • ►years 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YVVV) 34 Enter the date(s) the refunded bonds were Issued► ,lMM/DDNYYYlFor Paperwork Reduction Act Notice, see separate Instructions. cat No. 63773S ►yoars ► Form �G (Rev. 9-201si F1>rm 8038-G (Rav. 9-2018) ,. � Miscellaneous 35 Enter the amount of the state volume cap allocated to the Issue under section 141 (b)(5) • . . . 3538a Enter the amount of gross proceeds Invested or to be Invested In a guaranteed Investment contract (GIC). See Instructions . • . • • . • . . . . . . . . . • . . . • . . • . 38a -�--b Enter the final maturity date of the GIC ► (MM/DD/YVYY) 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 Page2 to other governmental units . . . . . • • . . . • . . . . . • . . . . • . . 37 _J.__ 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/YVYY) ______________ _ 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)0II) (small Issuer exception), check box ► D 40 If the Issuer has elected to pay a penalty In lieu of arbitrage rebate, check box . • . • • . . . . ► 041a 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 • . . . . . • . . • . . • • . . • . • . . ► D 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this Issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . . . . • • ►044 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . ►045a If some portion of the p� was used to reimburse expenditures, check here► D and enter the amountofraimbursement ...•.......... ► ____________ _ b Enter the date the official intent was adopted► (MM/DD/YYYYJ Signature and Con� Paid Preparer Use Only Under penallles of per;.,,y. I declare that I ha\111 examined lhl& RIIUm and accom� sdledules and statements. and to the best ol my knowledge and belie!, llley are bw, COIT8Ct, and complete. I furtha-declare Chat I consent to the IRS's dlscla!Me of 1118 ls$uer's ,etim lnflnnallon, as necessal')I to pn:,oess lhfs nmn,. -'J'\perac,n1hatlhllY8 �- ► J� �� lDebbiePack.FinanceDiredor Signah.11y•iifi;;;;;lll'1 ■ulha1za:I tupRISlllltalhla Dale , Type or print name and lille PmVType p,vpnr"s name jl'repa,er's_...�-,atura --< ( � I Date I cneck O If I Pl'III James Dummitt I · ---:7• 'f / :t 'Z-/2.1 self-employ&d P01062531 Finn'i;; J\IPTIII ► Gilmon & Bell P.C. , � I Finn'• EIN ►43-1611738 Firm's a1cnsa ► 2405 Gnnd Boulevard Suite 1100 Kansas C.ilY MO 64108 I Phone no. 1116-221-1000 Fonn 803&-G CRev. 9-2018) EXHIBIT C-1 PURCHASER'S RECEIPT AND ISSUE PRICE CERTIFICATE $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 The undersigned, on behalf of TD Securities, New York, New York (the "Original Purchaser"), as the Original Purchaser, and Underwriter of the above-described notes (the "Notes"), being issued on the date of this Certificate by the City of Salina, Kansas (the "Issuer"), certifies and represents as follows: 1.Receipt for Notes. The Original Purchaser acknowledges receipt on the date hereof of all of the Notes, consisting of fully registered Notes in authorized denominations in a form acceptable to the Original Purchaser. 2. Issue Price. (a)Public Offering. The Original Purchaser offered all of the Notes to the Public (as definedbelow) in a bona fide initial offering. (b)Reasonably Expected Initial Offering Price. As of the sale date of the Notes (April 12,2021), the reasonably expected initial offering prices of the Notes 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 Notes used by the Original Purchaser in formulating its bid to purchase the Notes. (c)Defined Terms. (i)The term "Maturity" means Notes with the same credit and payment terms. Noteswith different maturity dates, or Notes 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 writtencontract with the Issuer ( or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Notes 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 Notes to the Public (includin·g a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Notes to the Public). 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 C-1-1 103 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 Notes, 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 Notes and other federal income tax advice that it may give to the Issuer from time to time relating to the Notes. Dated: April 29, 2021. TD SECURITIES NEW YORK, NEW YORK By: ____________ _ Title: Director :tv1atmity Date P1ice EXHIBIT C-2 MUNICIPAL ADVISOR'S CERTIFICATE REGARDING COMPETITIVE SALE $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2021-1 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 notes (the "Notes"), has assisted the Issuer in soliciting and receiving bids from potential underwriters in connection with the sale of the Notes in a competitive bidding process in which bids were requested for the purchase of the Notes at specified written terms, and hereby certifies as set forth below with respect to the bidding process and award of the Notes: 1.The Notes were offered for sale at specified written terms more particularly described inthe 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. Themethods 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 opportunityto bid to purchase the Notes, 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 anestablished industry reputation for underwriting new issuances of municipal bonds. Based upon the Municipal Advisor's knowledge and experience in a�ting 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 TD Securities, New York, New York (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 Notes 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 Notes, 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 Notes and other federal income tax advice that it may give to the Issuer from time to time relating to the Notes. C-2-1 Dated: April 29, 2021 -2-STIFEL, NICOLAUS & COMPANY,INCORPORATED KANSAS CITY, MISSOURI � --By: Title: �to� Attachment 1 Notice of Sale C-2-3 1:00 p.m. PARITY®, be If in General Redemption. Notice and Effect of Call for Redemption. Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to 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. 12-6a0let seq., K.S.A. 12-1736 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all asamended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") forthe purpose of paying a portion of the cost of certain public improvement projects and to pay costsassociated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as toboth principal and interest in part from special assessments levied upon the property benefitted by theconstruction of certain public improvements, and if not so paid, from ad valorem taxes which may be leviedwithout limitation as to rate or amount upon all the taxable tangible property, real and personal, within theterritorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from advalorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangibleproperty, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources ofthe Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes asthe same become due.mEBONDS 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 * Prelimina.ry; subject to change as provided in "Adjustment of Issue Size, " herein. Issue Price," if requested 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. P]ace of Payment. The principal of and interest on the Bonds will be payable in lawful money ofthe 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 cal]ed 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 territoriaJ 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 beneficia] 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 beneficiaJ 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 OTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the 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 applicab]e. Electronic bids via PARITY® must be submitted inaccordance 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 shal1 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 provule pertinent bidding infonnation 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 andfrom the following website: wwwgewissuehome.i-deal.conJ. 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 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 do11ars) 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 shaU 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 1 %; ( 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 retwned 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 Basis of Award. will If will If (1) will Attachment 2 Bids Received C-2-4 8/5/2021 PARITY Result Screen https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityResult&customer=TM3&issue_key_no=308947&sec_type=NT 1/1 Wire Inbox Parity Calendar 11:44:32 a.m. CDST Upcoming Calendar Overview Compare Summary Bid Results Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 The following bids were submitted using PARITY® and displayed ranked by lowest NIC. Click on the name of each bidder to see the respective bids. Amount Awarded (M) Bidder Name NIC Bid Amount TD Securities 0.249724 5,230M BNYMellon Capital Markets 0.294545 5,230M Oppenheimer & Co., Inc.0.296298 5,230M Piper Sandler & Co 0.355359 5,230M Commerce Bank 0.362099 5,230M ---------------------------------------------- Awarded Totals 0M 26,150M Issue Size 5,230M Save *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. 8/5/2021 PARITY Bid Form https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=308947&bid_no=6&sec_type=NT&bi…1/1 Wire Inbox Parity Calendar Upcoming Calendar Overview Result Excel TD Securities - New York , NY's Bid Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,322,048.00, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2022 5,230M 2.0000 0.2000 101.806 Bid:101.760000 Premium:$92,048.00 Net Interest Cost:$13,133.11 NIC:0.249724 Time Last Bid Received On:04/12/2021 11:55:02 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: TD Securities, New York , NY Contact: Chris Dimon Title: Telephone:212-827-7171 Fax: 8/5/2021 PARITY Bid Form https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=308947&bid_no=2&sec_type=NT&bi…1/1 Wire Inbox Parity Calendar Upcoming Calendar Overview Result Excel BNYMellon Capital Markets - Pittsburgh , PA's Bid Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,319,690.84, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2022 5,230M 2.0000 0.1600 101.847 Bid:101.714930 Premium:$89,690.84 Net Interest Cost:$15,490.27 NIC:0.294545 Time Last Bid Received On:04/12/2021 11:56:33 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: BNYMellon Capital Markets, Pittsburgh , PA Contact: Luke Guglielmo Title: Trader Telephone:212-815-2655 Fax: 8/5/2021 PARITY Bid Form https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=308947&bid_no=3&sec_type=NT&bi…1/1 Wire Inbox Parity Calendar Upcoming Calendar Overview Result Excel Oppenheimer & Co., Inc. - Philadelphia , PA's Bid Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,280,155.70, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2022 5,230M 1.2500 0.1700 101.084 Bid:100.959000 Premium:$50,155.70 Net Interest Cost:$15,582.49 NIC:0.296298 Time Last Bid Received On:04/12/2021 9:29:21 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Oppenheimer & Co., Inc., Philadelphia , PA Contact: Darren Smith Title: Senior Director Telephone:215-656-2893 Fax: 215-656-2896 8/5/2021 PARITY Bid Form https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=308947&bid_no=5&sec_type=NT&bi…1/1 Wire Inbox Parity Calendar Upcoming Calendar Overview Result Excel Piper Sandler & Co - New York , NY's Bid Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,290,197.30, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2022 5,230M 1.5000 0.2200 101.284 Bid:101.151000 Premium:$60,197.30 Net Interest Cost:$18,688.53 NIC:0.355359 Time Last Bid Received On:04/12/2021 11:59:32 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Piper Sandler & Co, New York , NY Contact: Joanna Brody Title: Underwriter Telephone:212-284-9421 Fax: 212-284-9411 8/5/2021 PARITY Bid Form https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=308947&bid_no=1&sec_type=NT&bi…1/1 Wire Inbox Parity Calendar Upcoming Calendar Overview Result Excel Commerce Bank - Kansas City , MO's Bid Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 For the aggregate principal amount of $5,230,000.00, we will pay you $5,316,138.10, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2022 5,230M 2.0000 0.1400 101.867 Bid:101.647000 Premium:$86,138.10 Net Interest Cost:$19,043.01 NIC:0.362099 Time Last Bid Received On:04/12/2021 9:07:11 CDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Commerce Bank, Kansas City , MO Contact: Matthew Koch Title: Fixed Income Trader Telephone:816-234-2450 Fax: Attachment 3 Bid Comparison C-2-5 fQ,-peal e Wire Inbox Parity Calendar Deal List I 1 :13:34 p.m. COST I Upcoming Calendar Overview Compare Summary Bid Results Salina $5,230,000 General Obligation Temporary Notes Series 2021-1 The following bids were submitted using PAR/Tyi) and displayed ranked by lowest NIC. Awarded Totals Issue Size Click on the name of each bidder to see the respective bids. Amount Awarded (M) loM 5,230M Bidder Name NIC TD Securities 0.249724 BNYMellon Capital Markets 0.294545 I Oppenheimer & Co .. Inc. Piper Sandler & Co j Commerce Bank Save 0.296298 0.355359 0.362099 Bid Amount 5,230M 5,230M 5,230M 5,230M 5,230M -------------- 26,150M *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 EXHIBIT D TO FEDERAL TAX CERTIFICATE Description of Property Comprising the :Financed Facility City of Salina, Kansas General Obligation Temporary Notes Series 2021-1 Notes Asset Description North 9th Street Bridge Smoky Hill River Renewal Automated Sanitation Trucks Great Plains Manufacturing Center Convention Hall HV AC Tonis Pizza Event Center Less land costs Net costs, excluding land Average, Reasonably Expected Economic Life: 120% of Original Economic Life 2021-1 Note Proceeds Allocated to Project Costs* Other Money Allocated to Project Costs** Total Proj_ect Costs Original Economic Life 20 20 10 20 120% *Improvement Fund Deposit excludes Costs of Issuance and Underwriter's Discount.** Other Money may include prior or future tax-exempt financings. Total Estimated Asset Project Type Costs Street 2,000,000 Other 27,000,000 Equipment 1,600,000 Buildin� 160,426 30,760,426 30,760,426 16.97 years 20.37 years City of Salina, Kansas General Obligation Temporary Notes, Series 2021-1 Costs Paid from Series 2021-1 Notes Proceeds* 1,905,000 1,621,367 1,600,000 160,426 5,286,793 5,286,793 Economic Lifex Financed Cost 38,100,000 32,427,340 16,000,000 3,208,520 89,735,860 5,286,793 25,473,633 $ 30,760,426 April 29, 2021 EXHIBIT E SAMPLE ANNUAL COMPLIANCE CHECKLIST Name of tax-exempt notes ("Notes") financing General Obligation Temporary Notes, Financed Asset: Series 2021-1 Issue Date of Notes: April 29, 2021 Placed in service date of Financed Facility: Name of Bond Compliance Officer: Period covered by request ("Annual Period"): Item Question Response 1 Was the entire Financed Facility owned by the Issuer during □YesOwnership the entire Annual Period? □NoIf answer above was "No," was advice of Bond Counsel □Yesobtained prior to the transfer? □NoIf 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. Item Question Response 2 During the Annual Period, was any part of the Financed □YesLeases & Facility leased at any time pursuant to a lease or similar □NoOther Rights agreement for more than 50 days? to Possession If answer above was "Yes," was advice of Bond Counsel □Yesobtained prior to entering into the lease or other arrangement? □NoIf 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. Item Question Response 3 During the Annual Period, has the management of all or any □YesManagement part of the operations of the Financed Facility (e.g., cafeteria, □Noor Service system operations, etc.) been assumed by or transferred to Agreements another entity? If answer above was "Yes," was advice of Bond Counsel □Yesobtained prior to entering into the Management or Service □NoAgreement? 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. Item Question Response 4 Was any other agreement entered into with an individual or □YesOther Use entity that m-ants soecial leg-al rights to the Financed Facility? □NoIf answer above was "Yes," was advice of Bond Counsel □Yesobtained prior to entering into the agreement? □NoIf 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. Item Question Response 5 Have all rebate and yield reduction calculations mandated in □YesArbitrage the Federal Tax Certificate been prepared for the current year? □No& Rebate If No, contact Rebate Analyst and incorporate report or include description of resolution in the Tax-Exempt Bond File. Bond Compliance Officer: Date Completed: -2- Governing Body City of Salina, Kansas $ GILMOR_EBELL One Main Place -100 North Main, Suite 800 Wichita, Kansas 67202-1311 (316) 267-2091 / (316) 262-6S23 FAX/ gilmorebell.com April 29,2021 TD Securities New York, New York Re: $5,230,000 General Obligation Temporary Notes, Series 2021-1 of the City of Salina, Kansas, Dated April 29, 2021 We have acted as Bond Counsel to the City of Salina, Kansas (the "Issuer"), in connection with its issuance of the above-captioned notes (the "Notes"). 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 authorizing the issuance and prescribing the details of the Notes. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1.The Notes have been duly authorized, executed and delivered by the Issuer and are validand legally binding general obligations of the Issuer. 2.The Notes are payable as to both principal and interest from ad valorem taxes which maybe 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 Notes to the extent that necessary funds are not provided from other sources. 3.The interest on the Notes (including any original issue discount properly allocable to anowner 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 Notes 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 Notes to be included in gross income for federal income tax purposes 600596.20218\OPINION City of Salina, Kansas General Obligation Temporary Notes $5,230,000 -Series 2021-1 Dated April 29, 2021 Page Two retroactive to the date of issuance of the Notes. The Notes have not been designated as "qualified taxexempt obligations" for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Notes. 4.The interest on the Notes 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 Notes ( except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Notes other than as expressly set forth in this opinion. The rights of the owners of the Notes 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. GMR/MLW:wab 1h GILMOR._EBELL 600596.20218\0PINION STATE OF KANSAS OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT ATTORNEY GENERAL MEMORIAL HALL 120 SW 10TH AVE .. 2ND FLOOR TOPEKA, KS 6661 2-1597 (785).296-2215 • FAX (785) 296-6296 WWW.AG.KS.GOV April 21, 2021 CLOSING MEMORANDUM TO: FROM: SEE DISTRIBUTION LIST DAVID ARTEBERRY RE: NOTE ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER: AMOUNT, NAME AND DATE OF ISSUE: TIME AND DATE OF CLOSING: SETTLEMENT NUMBERS: METHOD OF FUNDS TRANSFER: City of Salina, Kansas $5,230,000 City of Salina, Kansas General Obligation Temporary Notes Series 2021-1 Dated April 29, 2021 10:00 a.m. Thursday, April 29, 2021 Via telephone Par Amount of Notes Add: Reoffering Premium Less: Underwriter's Discount Less: Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds $5,230,000.00 95,499.80 (3,451.80) (104,600.00) $5,217,448.00 TRANSFER INSTRUCTIONS: (TD Securities Wire) DISPOSITION OF FUNDS: (City of Salina) DELIVERY OF TRANSCRIPT On Thursday, April 29, 2021, TD Securities will wire transfer an amount of $5,217,448.00 to: Sunflower Bank ABA# Account Name: City of Salina Account# Attn: Debbie Pack The City shall deposit the following funds into the Improvement Fund for General Obligation Temporary Notes, Series 2021-1 (the "Improvement Fund"): From TD Securities Good Faith Deposit Total Deposit $5,217,448.00 104,600.00 $5,322,048.00 AND LEGAL OPINION: Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal opinion to the City, TD Securities, and Stifel, Nicolaus & Company. Original signed legal opinions and transcripts will be mailed when completed. NOTE DELIVERY INSTRUCTIONS: The Notes will be delivered to the facilities of the Depository Trust Company at least one business day in advance of closing. PAYMENT OF COSTS OF ISSUANCE: All costs associated with the issuance of the Notes will be paid after closing by the City from the Improvement Fund upon presentation of the proper invoices. Bivins, Wontu (G&B) From: Sent: To: bond.newissues@treasurer.ks.gov Thursday, April 15, 2021 2:12 PM Bivins, Wontu (G&B) Subject: Bondreg: Updated Bond Registration April 15, 2021, 14:12:03 This bond issue has been updated in the KST Bond Registration System. Below is the updated information: Registration#: 0322-085-042921-245 Municipality: Salina Bond Counsel: Gilmore Bell: Wontu Bivins Paying Agent: State Purpose & Series: General Obligation Temporary Notes, Series 2021-1 Book Entry: Yes Principal: $5,230,000.00 Closing Date: April 29, 2021 The issue was updated by Gina Clement. 1 Office of the Kansas State Treasurer Bond Registration Intranet 900 SW Jackson St., Ste 201 ... Topeka, KS 66612-1235 ... 785-296-3171 April 15, 2021 Wontu Bivins Gilmore & Bell Pc 100 North Main, Suite 800 Wichita, KS 67202 RE: $5,230,000.00, City of Salina, Kansas General Obligation Temporary Notes, Series 2021-1 Dated April 29, 2021, Registration #0322-085-042921-245 Dear Ms. Bivins, 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 15, 2021. Sincerely, Shauna Wake, M.B.A. Director of Fiscal Services Office of the Kansas State Treasurer cc Wontu Bivins Gilmore & Bell Pc G.C. 100 North Main, Suite 800 Wichita, KS 67202 CITY OF SALINA, KANSAS GENERAL OBLIGATION BONDS, SERIES 2021-A; AND GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2021-1 ISSUER CITY OF SALINA, KANSAS 300 West Ash Salina, Kansas 67402-0736 Telephone: (785) 309-5735 Fax: (785) 309-5738 Mike Schrage, City Manager E-mail: mike.schra2:e@salina.orgDebbie Pack, Finance Director E-mail: Dehhie.pack@salina.orgCheryl Mermis, Deputy City Clerk E-mail: chen I mermi,<a1,a!ina.Pn•JoVonna Rutherford, City Clerk DISTRIBUTION LIST BOND COUNSEL GllMORE & BELL, P.C. 100 N. Main, Suite 800 Wichita, Kansas 67202 Telephone: (316) 267-2091 Fax: (316) 262-6523 Mitch L. Walter, Esq. E-mail: mwalter@gilmorebell.comWontu A. Bivins, Legal Practice Assistant E-mail: wbivins@gilmorebell.com E-mail: jovonna.ru1herford@salim1.om 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 Telephone: (816) 221-1000 f---------------------; Fax: (816) 221-1018 ISSUER'S COUNSEL CLARK, MIZE & LINVILLE CHARTERED 129 South 8th -Box 380 Salina, Kansas 67402-0380 Telephone: (785)-472-3186 Greg Bengtson, Esq. Telephone: (785) 823-6325 E-mail: gabeng1son@cml-law.com MUNICIPAL ADVISOR STIFEL, NICOLAUS & COMPANY, INC. 4801 Main Street-Suite 530 Kansas City, Missouri 64112 Fax: (816) 283-5326 David Arteberry, Public Finance, Director Telephone: (816) 203-8733 E-mail: artebernd@stifel.comNikia Jackson E-mail: jacksonn@stifel.comNikki Jackson E-mail: jacksonni@stilei.com 600596.20218/Distribution List Gina Riekhof, Esq. E-mail: 2:riekhof@gil more bell .comJames Dummitt, Esq. E-mail: jdummitt@gilmorcbell.comBridget Findley, Esq. E-mail: brindle,@gilmorebell.com PAYING AGENT TREASURER OF THE ST A 1E OF KANSAS Landon State Office Building 900 Southwest Jackson. Suite 201 Topeka, Kansas 66612-1235 Telephone: (785) 296-4148 Fax: (785) 296-7950 Shauna Wake, Director of Fiscal Services Telephone: (785) 296-4160 E-mail: bond.ncwissues@trcasurer.ks. 0ov PURCHASER -NOTES TD SECURITIES 31 West 52nd New York, NY 10019 Telephone: Fax: (212) 827-7239 Chris Dimon, E-mail: chris.dimon@tdsecurities.com 600596.20218/Distribution List RATING AGENCY MOODY'S INVESTORS SERVICE 600 North Pearl Street, Suite 2165 Dallas, Texas 75201 Fax: (214) 279-6538 TBD